CAMS Online Practice Questions and Answers

What is suspicious activity or red flag with regard to a customer's activity? Choose 3 answers

A. Paying the tellers he deals with a regular gratuity

B. Exchanging small denomination bills for large ones

C. Engaging in wire transactions with an offshore account

D. Asking about the bank's fee schedule for a series of transactions

What describes the Black Market Peso Exchange money laundering method?

A. The best known money laundering method used by known terrorists

B. An undercover technique to identify politically exposed persons who may assist money launderers

C. A method primarily used by narcotics traffickers to transfer value back to the source country

D. A method used to smuggle dollars or pesos across that border from the U.S. to Mexico, and vice versa

An institution has made the decision to exit a client relationship due to anti-money laundering concerns. Prior to starting the close out process, the institution receives a written request from a law enforcement agency to keep the account open. The client is the subject of an ongoing investigation and law enforcement wants the institution to continue to monitor the account and report any suspicious activity.

What is primary consideration the institution should keep in mind when deciding whether to agree to this request?

A. The anticipated cost of complying with the law enforcement request

B. The number of suspicious transaction reports previously filed on the client

C. The fact that the institution has a solid record in complying with law enforcement requests

D. Whether the institution can continue to meet its regulatory obligations with the accounts open

A law enforcement agency is reviewing a suspicious transaction report (STR) filed by a financial institution for suspicious activity on a client's account. Subsequently, the agency requests further information. Which supporting documentation might the law enforcement agency request from the institution to facilitate its investigation?

A. Previously filed STRs on the same customer

B. Account opening documents and account statements

C. Copies of promotional materials sent to the customer

D. A copy of the institution's STR policy and procedures

What are the regulatory risks to a bank employee who willfully violates anti-money laundering laws?

A. Investigation and reputational damage

B. Fines and suspension from the industry

C. Criminal investigation and imprisonment

D. Enforcement actions including fines against the financial institution

A private banker of a major international bank is onboarding a new private investment company. The banker has verified the identity of the two directors, a husband and wife, who are equal shareholders. The funds in the account will be

provided solely by the wife.

The banker was later informed by the company that an additional director and shareholder will be added to the company although the new shareholder will not provide funds.

What is the next step for due diligence in respect to the additional director and shareholder according to the Wolfsberg Anti-Money Laundering Principles for Private Banking?

A. Refuse to open the account as it is not usual for an individual to be a director and shareholder of a private investment company without providing funds.

B. Seek to further understand the relationship between the shareholders and undertake due diligence on the source of funds and wealth for each of the shareholders

C. Verify the identity of this individual, including due diligence in respect of background and reputation, and undertake due diligence on her source of funds and wealth

D. Seek to further understand the relationship between the shareholders and verify the identity of the individual which may include due diligence in respect to her background and reputation

An existing customer at a bank has recently expanded its services to provide check cashing for its customers.

Which factor indicates the bank should terminate this relationship?

A. The bank has not updated its automated monitoring system.

B. The business has no previous experience with this service.

C. The business has not updated its anticipated activity with the bank.

D. The business is now a Money Service Business and has not registered with FinCEN.

An analyst reviewing trade finance transactions notices an increase in price of 25% over 12 months for commodities with the same specification and quantity. Which action should the analyst take?

A. Produce an investigation report that finds evidence to substantiate the analyst's suspicion and submit a SAR/STR.

B. Produce an investigation report that considers client activity and factors that may have legitimately affected transaction cost.

C. Produce an updated due diligence record for the client so that monitoring can be enhanced.

D. Produce a SAR/STR that describes apparent trade-based money laundering and submit to the Financial Investigation Unit (FIU).

A money remittance business will most likely attract money launderers because it

1.deals primarily in cash transactions.

2.engages in international transactions.

3. conducts transactions for walk-in customers.

4.does not have to comply with transaction reporting.

A. 1, 2, and 3 only

B. 1, 2, and 4 only

C. 1, 3, and 4 only

D. 2, 3, and 4 only

The USA PATRIOT Act on correspondent banking requires U.S. FIs that onboard new non-U.S. FIs to address which of the following? (Choose two.)

A. Determine under a risk-based approach if correspondent accounts require enhanced due diligence (EDD) measures.

B. Close correspondent accounts that the foreign banks allow other FIs to use.

C. Ascertain the identity of the owners of the accounts that reside in the U.S.

D. Perform scrutiny for possible money laundering by obtaining information of the foreign bank's AML program.

E. Implement monitoring activities in a reasonable manner only for inbound transactions.