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Full version: CAMS Exam Dumps Questions

1.To ensure that an institution’s anti-money laundering program is current, which step should be
taken?
A. The program should be evaluated and updated at least every six months be the Board of Directors
B. The program should be reviews by a federal law enforcement officer for gaps in controls
C. The program should be sent to the institution’s government regulator on a periodic basis
D. The program should be reassessed at least annually
Answer: D

2.A businessman requests a European private bank to open a numbered or alternate name account.
According to the Basel Committee on Banking Supervision principles, which of the following is the
most important question the banker should ask?
A. Who will control the account?
B. Who will inherit the proceeds in the event of the businessman's death?
C. How much money will be deposited into the account?
D. What account-opening date should I record'!'
Answer: A

3.Which requirement is included in the Fourth European Union Directive on money laundering?
A. It requires obliged entities to consider politically exposed persons as high risk for life
B. It requires obliged entities to conduct enhanced due diligence on all prepaid card holders
C. It requires member countries to maintain registries of the beneficial owners of legal entities
D. It requires member states to enact economic sanctions against countries that do not cooperate
with Financial Action Task Force recommendations
Answer: C

4.Which of the following activities are considered money laundering red flags when reviewing
business operations of a money services business (MSB)? (Select Two.)
A. A customer exchanging foreign currency from a higher-risk jurisdiction for domestic currency under
the reporting threshold.
B. Cash-intensive businesses, such as convenience stores or restaurants, making large cash
deposits.
C. A customer completing frequent small-dollar international money transfers to their native country.
D. A customer being hesitant to provide beneficiary name or address information when sending
international wire transfers.
E. A customer using multiple accounts under different names to conduct transactions.
Answer: D,E

5.Which of the following are key components of the Know Your Customer (KYC) process? (Select
Two.)
A. Inquiring about the source of wealth and source of funds
B. Asking to provide a list of immediate family members
C. Verifying the financial crime awareness of the client
D. Collecting necessary documents to verify the veracity of information
Answer: A,D

6.What are the roles of a government Financial Intelligence Unit (FIU)? (Select Three.)
A. Investigate and, where appropriate, prosecute all suspicious transaction and suspicious activity
reports received from reporting institutions or obliged institutions.
B. Analyze all suspicious transaction and suspicious activity reports received from reporting
institutions or obliged institutions.
C. Disseminate analysis of suspicious transaction and suspicious activity reports to foreign judicial
systems to enhance their anti-money laundering and terrorist financing investigations and
prosecutions.
D. Disseminate the analysis of suspicious transaction and suspicious activity reports to local law
enforcement agencies and foreign FIUs to combat money laundering.
E. Receive reports of suspicious transactions and suspicious activities from reporting institutions or
obliged institutions.
Answer: B,D,E
7. A high level of activity in that securities account immediately followed by a high volume of securities
transactions.

8.Which step should financial institutions take when complying with sanctions requirements?
A. Adopt automatic screening systems to detect designated persons and entities.
B. Change the risk profile to "high-risk" if an existing customer becomes a sanctioned entity and
continue monitoring further transactions.
C. Conduct enhanced due diligence (EDD) for prohibited entities on the sanctions list.
D. Freeze the funds or assets of designated persons and entities once this decision is approved by
the board.
Answer: A

9.Customers of a telecommunications firm received an email explaining an issue with their last order.
The customers were directed to the company website via a link in the email to provide personal
information. Both the email and website were fake.
What type of cybercrime has been committed?
A. Malware
B. Cryptojacking
C. Spear phishing
D. Tumbling
Answer: C

10. Financial Action Task Force 40 Recommendations

11.Which two statements in the Wolfsberg Group’s “Suppression of the Financing of Terrorism”
define the role financial institutions should play in the fight against terrorism? (Choose two.)
A. Financial institutions need to assist competent authorities in fighting terrorist financing through
prevention, detection and information sharing.
B. Financial institutions need to continuously analyze the types of activity related to terrorist financing
and develop models that in the long term will drive down terrorism.
C. Financial institutions should have financial intelligence units dedicated to the investigation of
activity that would lead to the detection of terrorist financing as a means to decrease global terrorism.
D. Financial institutions should apply extra due diligence whenever they see suspicious or irregular
activities, especially when customers are engaged in sectors or activities that have been identified by
competent authorities as being used for the financing of terrorism.
Answer: A,D

12.What do Financial Action Task Force (FATF)-style regional bodies do for their members to help
combat money laundering and terrorist financing?
A. They provide technical assistance to members in implementing FATF recommendations
B. They assist member countries in penalizing entities that violate FATF standards and
recommendations
C. They work with members on areas of concern outside of anti-money laundering and terrorist
financing
D. They supervise member country financial institutions relating to anti-money laundering and terrorist
financing
Answer: A
13.The EU’s6th Anti-Money Laundering Directive (6AMLD):
A. Extended AML oversight to crowdfunding platforms and professional football clubs.
B. Eliminated the requirement for the European Commission to conduct a risk assessment.
C. Created a central EU watchdog to combat money laundering.
D. Strengthened provisions relating to the accuracy of data submitted to central beneficial ownership
registries.
Answer: D

14.A non-US bank is implementing a sanctions compliance program.

Which extraterritorial reach of Office of Foreign Assets Control (OFAC) regulations would matter the
most to the foreign bank?
A. OFAC administers sanctions based on criminal investigations against targeted foreign individuals.
B. OFAC sanctions programs prohibit transactions and require the blocking of assets of foreign
individuals that appear in negative media sources.
C. OFAC acts only under presidential wartime emergency powers, against countries and foreign
individuals considered enemies of the US.
D. OFAC has the power to impose significant penalties on foreign individuals who are found to be in
violation of the blocking orders.
Answer: D

15.Which product is considered to be of highest money laundering risk?

A. Credit cards
B. Savings accounts
C. Time deposit accounts
D. International wire transfers
Answer: D

16.OFAC-issued regulations apply to which entities? (Choose two.)

A. Intermediaries transacting with US banks
B. Foreign banks with US customers
C. Foreign subsidiaries of US banks
D. US branches of a foreign bank
E. Foreign import-export companies
Answer: C,D

17.The Wolfsberg Anti-Money Laundering Principles for Private Banking require new clients to be
approved by whom?
A. The board of directors
B. Only the private banker
C. The private banker’s supervisor
D. At least one person other than the private banker
Answer: D

18.A director of a financial institution was convicted of laundering money as part of a Ponzi scheme
and terminated. As a result of an internal investigation evidence proved that an employee assisted in
the illegal activity.
Which action should the institution take?
A. Discipline the employee with no further action
B. Discipline the employee and inform local authorities
C. Since the employee was not charged, no further action is required
D. Require all employees to complete additional anti-money laundering training
Answer: B

19.How can violations of anti-money laundering laws be a risk to individuals?

A. Violations can result in civil and criminal fines and penalties against the individuals.
B. Violations can result in additional legislation that the individuals have to comply with.
C. Violations can result in enforcement actions that damage the reputation of the individual’s
employer.
D. Violations can result in additional and more stringent anti-money laundering training for individuals.
Answer: A

20.Which situation is the highest risk for money laundering and terrorist financing activity?
A. A customer purchases casino chips, using small denomination bank notes, but does not engage in
game play before redeeming the chips for a casino check
B. A customer purchases casino chips and engages in significant game play before requesting a
casino check for the remainder
C. A customer purchases casino chips using a credit card and engages in minimal game play before
redeeming the chips for a casino check
D. A customer purchases casino chips using credit from an account at an affiliated casino and
engages in significant game play before redeeming the chips for a
Answer: A

21.Which activity would require an update to the first line training program?
A. The implementation of a new system that provides information for monitoring customer accounts.
B. The expansion to customer segments that will utilize newly established products.
C. The maintenance of regulatory requirements for onboarding documentation collections of a
customer base.
D. The onboarding of a new customer type which was previously reviewed and risk rated.
Answer: B

22.Whichpersons must always comply with all Office of Foreign Assets Control (OFAC) regulations?
(Select Three.)
A. U.S. citizens regardless of location.
B. Non-U.S. financial institutions that offer accounts in USD regardless of location.
C. Merchants that offer U.S.-origin goods for sale regardless of location.
D. U.S.-incorporated entities and their foreign branches.
E. Permanent U.S. resident aliens regardless of location.
Answer: A,D,E

23.Which factor should a financial institution (FI) consider prior to sharing customer records within the
same jurisdiction?
A. The availability of the institution's information sharing practices
B. The degree to which the collected client data is complete
C. The locally applicable restrictions regarding the disclosure of client information
D. The potential different time zones within the same jurisdiction
Answer: C

24.Transfers of money over the last 6 months to a corporation in a jurisdiction with strict secrecy laws
triggered an alert.
Which of the following should cause the most suspicion of money laundering?
A. The jurisdiction is a known tax haven.
B. The company has bearer shares.
C. The corporation director is a European citizen.
D. No financial statements have been filed for 3 years.
Answer: B

25.Whichchanges at a financial institution (FI)should trigger an enterprise-wide reassessment of its

inherent AML risk exposure? (Select Three.)
A. Introduction of new products or services.
B. Restructuring of the FI’s risk and compliance functions.
C. Changes in the individuals overseeing the FI's product lines and sales strategies.
D. Use of new technologies for delivering existing products.
E. Mergers or acquisitions.
Answer: A,D,E

26.Private investment companies are potentially vulnerable to money laundering because:

A. It can be difficult to identify the people who are the ultimate beneficial owners.
B. they transact shares that are not traded on a stock exchange.
C. they exist in offshore jurisdictions with tight secrecy laws to protect the privacy of their owner(s).
D. they are shell companies formed to maintain a client's confidentiality.
Answer: A

27.What does the Egmont Group’s support for its members include?
A. Issuing due diligence models for financial institutions
B. Expanding and systematizing international cooperation in the reciprocal exchange of information
C. Issuing strategic products for law enforcement agencies and FIUs on topics of international interest
D. Expanding the ability of FIUs to enforce laws and exchange information globally to combat money
laundering and terrorist financing
Answer: B

28.Under the Wolfsberg Correspondent Banking Principles, which action is considered an enhanced
due diligence obligation to correspondent banking clients that present greater risks?
A. Conducting reviews on all high-risk relationships
B. An evaluation done by the compliance officer in charge of the account
C. Approval of a high-risk relationship by a senior management committee
D. Ongoing monitoring of clients located in tax haven countries
Answer: C

29.Which three statements are true about on-line banking offering a significant money laundering risk
to a financial institution?
A. The nature of on-line banking can make it difficult to establish who is controlling the account
B. The ease of access through the internet enables cross border movement of funds
C. Due to client confidentiality, information collected on-line cannot be shared with law enforcement
agencies on mere suspicion
D. The speed of electronic transaction enables execution of multiple complex transactions within short
time frame
Answer: A,B,D

30.According to the Basel Committee, customer acceptance, customer due diligence, and record-
keeping policies and procedures should be changed as necessary to:
A. address KYC deficiencies in account opening procedures.
B. ensure policies and procedures are reviewed every three months.
C. address structure changes strictly related to new employees.
D. address variations in risk among each line of business within the organization.
Answer: D

31.What does the Financial Action Task Force (FATF) urge its members and all other jurisdictions to
do when a jurisdiction is identified as having lax anti-money laundering / counter financing of terrorism
controls?
A. Apply counter-measures to that jurisdiction
B. Consider customers from that jurisdiction as high risk
C. Cease doing business with that jurisdiction immediately
D. Apply economic sanctions until otherwise notified by FATF
Answer: A

32.Which are red-flag indicators of possible money laundering through online gambling? (Choose
two.)
A. The player is identified as a Politically Exposed Person (PEP).
B. The player opens several accounts under the same name using different IP addresses.
C. The customer uses their credit card to fund an online gambling account.
D. The player deposits small amounts of funds into their online gambling account.
E. The customer logs on to the account from multiple countries.
Answer: B,E

33.According to the Financial Action Task Force, financial institutions should exit the relationship with
a client in which case?
A. The client refuses to update information.
B. There is a change in ownership structure.
C. The client is a politically exposed person.
D. The country of incorporation has been elevated to high-risk.
Answer: A

34.Which principles should be included in a FATF-Style Regional Body (FSRB) update? (Choose
two.)
A. Issue country-specific Mutual Evaluation reports
B. Address AML/CFT technical assistance of individual members
C. Identify jurisdictions with weak AML/CFT regimes
D. Establish AML/CFT standards and typologies
E. Protect the reputation and standing of FATF
Answer: A,C

35.Which action should financial institutions with cross border correspondent banking activity be
required to perform according to the Financial Action Task Force 40 Recommendations?
A. Gather a list of their politically exposed customers
B. Identify natural persons who own or control more than 5%
C. Obtain senior management approval before establishing the relationship
D. Obtain a third party independent review of the respondent’s anti-money laundering program
Answer: C

36.Which of the following is a critical consideration for private sector firms when sharing data and
intelligence to combat financial crime?
A. The preference of upper management regarding which teams should participate in the data-
sharing initiative
B. The cost of the data-sharing system and whether it its within the existing IT budget
C. The potential return on investment (ROI) from the data shared versus the financial crime
prevention effort
D. Ensuring that the shared data complies with applicable data protection regulations while
maintaining the integrity and accuracy of the information
Answer: D

37.Which is a key characteristic of the Financial Action Task Force (FATF) Regional Style Bodies for
combatting money laundering/terrorist financing?
A. Instructing each member country to place FATF recommendations into law
B. Implementing regional mutual evaluation procedures
C. Emphasizing regional co-operation between member countries
D. Enabling FATF standards to be specific to each region
Answer: C

38.A customer comes into a financial institution and deposits a large amount of cash. He has never
done that before. When asked about the deposit, he indicates he recently sold a used car and
received cash.
He does not trust forms of payment and is wary of counterfeit money orders.
What should the bank do?
A. The bank has received a plausible explanation, so it should do nothing
B. While the explanation appears plausible, the institution should, for a period of time, monitor the
account for cash transactions and suspicious activity
C. While the explanation may be plausible, the institute should nonetheless file a Suspicious
Transaction Report to protect itself
D. The institution should close the account before another issues arise
Answer: B

39.What should an effective anti-money laundering training program include?

A. Computer-based modules titles differently for each job description in the bank
B. Random testing of employees to ensure proper understanding of policies
C. Real-life money laundering examples
D. Lists of anti-money laundering regulations
Answer: C

40.An accounting firm opened an account at a bank that is intended to be used as the operational
account for the business. After a few months, a comprehensive review of the account was triggered
due to unusual activity on the account.
Which most likely triggered the review?
A. The account receives international payments that are substantially higher than other fees they
typically receive.
B. The account sends monthly donations to several charities that operate in the same communities as
the accounting firm.
C. The account receives several payments a day from multiple customers who operate in different
industries.
D. The account receives international wires from companies in the Middle East where the accounting
firm has several branches.
Answer: A

41. A client requests the transfer of winnings to the bank account of a third party in a country without
an effective anti-money laundering regime.
A. 1, 2, and 3 only
B. 1, 2, and 4 only
C. 1, 3, and 4 only
D. 2, 3, and 4 only
Answer: B

42. Explain the customer's loan payment history.

43.Which transaction should result in a suspicious activity report filing?

A. A small business owner deposits checks totaling 9,950 USD on a daily basis without providing a
legitimate purpose.
B. A small business owner deposits 25.000 USD in cash proceeds with a business equipment bill of
sale.
C. A national food-chain restaurant makes multiple, anticipated cash transactions that are above the
daily reporting threshold.
D. A national food-chain restaurant with multiple cash transactions at various branch locations.
Answer: A

44.Abank received a subpoena regarding one of its clients. The Financial Intelligence Unit (FIU) of the
bank should review the subpoena and:
A. File a Suspicious Activity Report (SAR), including the receipt of the subpoena in the SAR narrative.
B. Perform a transaction review and respond fully to the subpoena.
C. Close the client’s account by informing the client of the subpoena.
D. Adjust the client's risk score and close the case.
Answer: B

45.Which type of sanctions are most likely to be used in order to avoid escalating violent conflicts
and/or proliferation of weapons?
A. Financial prohibitions
B. Export and import restrictions
C. Arms and related materials embargo
D. Asset freeze
Answer: C

46. Provide copies of the customer's loan documents.

47.To understand if the customer operates in line with the firm's risk appetite for a specific industry
segment, a financial institution must:
A. obtain sufficient customer information to understand the nature and purpose of customer
relationships for the purpose of developing a customer risk profile.
B. obtain identifying information for beneficial owners through a completed certification form from the
individual opening the account on behalf of the legal entity customer.
C. obtain the name and address, country identification number and date of birth of a non-customer
who purchases a monetary instrument.
D. obtain the name, date of birth for an individual, address and identification number from each
customer before opening the account.
Answer: A

48.Whichpractices should financial institutions (FIs) adopt for the process of terminating customer
relationships? (Select Three.)
A. Utilizing a flexible communication style that adapts to different customer situations during the
termination process.
B. Implementing a standardized procedure for customer termination that includes risk assessments
and necessary documentation.
C. Performing a final review of a customer's transaction history and records to address any
unresolved issues prior to termination.
D. Keeping records of the termination process, including the justification for the decision and any
correspondence with the customer.
E. Notifying the customer of the termination decision only after completing the termination process to
prevent possible disputes.
Answer: B,C,D

49.Aninternational bank is investigating a payment requested by one of its correspondent

relationships that generated an alert in the automated transaction monitoring system. The payment
originated from a corporation located in Hong Kong, and the final beneficiary is an individual in New
York.
Which steps should the bank take first to address the alert? (Select Three.)
A. Call the receiving individual to review identity verification documents.
B. Confirm that neither the beneficiary nor the originator are sanctioned parties.
C. Request supporting documents, including invoices and contracts, to confirm the purpose of the
payment.
D. Check for negative news in public sources on the sender and receiver.
E. Send a 314(b) request to the corporation’s bank in Hong Kong.
Answer: B,C,D
50.AnAML compliance officer is drafting plans to address deficiencies identified in an independent
audit.
Which approach is the best option?
A. Draft action plans in consultation with the jurisdiction’s FIU to remain aligned with other similar
companies.
B. Only commit to action plans that can be implemented and closed within the three-month
management reporting cycle.
C. Draft action plans that will take many months to fully implement to address the root cause of the
deficiencies.
D. Only commit to action plans that require no new investment to maximize shareholder value.
Answer: C

51.In many jurisdictions, financial institutions are prohibited from hiring a person who has been
convicted of what type of offense?
A. Kidnapping
B. Offenses involving dishonesty
C. Driving while under the influence
D. Protests of government action
Answer: B

52.A Money Laundering Reporting Officer's (MLRO) lack of action led to deficiencies in the bank's
AML program and a civil monetary penalty being levied against the MLRO.
Why was this direct action taken against the MLRO?
A. The MLRO is the only individual that can be held responsible for AML program deficiencies.
B. MLROs can be held to an individual accountability standard and face potential penalties for
contributing to AML program deficiencies.
C. The MLRO agreed to the civil penalty so that the bank would not be found liable for the AML
program deficiencies.
D. Action was brought against the MLRO because banks cannot be found liable for AML program
deficiencies.
Answer: B

53.According to Basel Committee on Banking Supervision's Customer Due Diligence for Banks, which
of the following should provide an evaluation of a bank's policies and procedures independent from its
management?
A. The credit risk department
B. The Board
C. A peer institution
D. The compliance function
Answer: D

54.AFinancial Intelligence Unit (FIU)in a country has received a SAR involving significant suspicious
fund transfers, not only within its jurisdiction but also in a foreign country. Further information is
required from the foreign country to determine whether the matter needs to be referred for
prosecution locally.
Which of the following statements is true in this scenario?
A. Sovereignty of nations means that information cannot be accessed from foreign countries.
B. It is against international laws on data protection to access information from foreign countries.
C. Any information related to money laundering can be received from any organization at any time
regardless of jurisdiction.
D. Countries that are members of the Egmont Group can request assistance for information from
each other.
Answer: D

55. Life insurance policies where the annual premium is no more than USD/EUR 1,000 or a single
premium of no more than USD/EUR 2,500.

56.Which three procedures should a compliance officer looking to revise an institution’s CTF efforts
include in accordance with the Wolfsberg Group’s Statement on the Suppression of the Financing of
Terrorism?
A. Consulting applicable lists and taking appropriate actions to determine if customers appear on
such lists
B. Reporting matches from lists of known or suspected terrorists to relevant authorities
C. Maintaining customer information to facilitate timely retrieval of such information
D. Reviewing only original identification documents when verifying customers
Answer: A,B,C

57.A law enforcement official calls a bank inquiring about a customer who is currently under
investigation. The law enforcement official requests information about the customer.
How should the bank respond?
A. Confirm the customer is either a current or former customer
B. Inform the board of directors before responding to the request
C. Provide the requested information to help aid in the investigation
D. Request a formal letter be submitted to verify the validity of the request
Answer: D

58.A law enforcement agency submits several requests to a financial institution.

Which request is legitimate and requires the bank to respond?
A. Freeze an account in terms of a court order.
B. Keep an account open upon verbal request.
C. Seize privileged documents upon written request.
D. Produce documents and testimony without a subpoena.
Answer: A

59. followed by an immediate wire transfer to an offshore secrecy haven.

60. An ongoing employee training program.

61.A law enforcement agency is conducting an investigation of a financial institution (Fl).

How should the Fl respond to the law enforcement agency's requests?
A. Disregard requests when there is a justifiable reason for doing so.
B. Share information about the investigation with analysts so they are aware.
C. Delay responses by informing senior management of requests.
D. Address all requests completely and in a timely manner.
Answer: D
62. Egmont Group's 100 Cases

63.What kind of person should perform the independent testing of an institution’s anti-money
laundering program?
A. A certified specialist in the anti-money laundering field
B. A former anti-money laundering officer from a similar institution
C. A person who reports directly to the Board of Directors or a Board Committee
D. A retired government regulator or federal law enforcement officer
Answer: C

64. All security trading activities for that individual since 2004.
A. 1, 2, and 3 only
B. 1, 2, and 4 only
C. 1, 3, and 4 only
D. 2, 3, and 4 only
Answer: B

65.An anti-money laundering specialist has just developed and implemented an anti-money
laundering program.
Which of the following is the best resource to evaluate the effectiveness of the program?
A. the regulatory authorities
B. a member of senior management
C. the anti-money laundering specialist
D. a qualified independent party/auditor
Answer: D

66.Pursuant to the Third European Union Money Laundering Directive, how long after being out of
prominent office should a person NOT be considered to be a Politically Exposed Person (PEP)?
A. 1 year
B. 2 years
C. 3 years
D. 4 years
Answer: B

67. 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
Answer: A

68.When an existing customer becomes a politically exposed person (PEP), what should the KYC
analyst do during the review/refresh period?
A. Seek the compliance officer's advice before marking the authorized signatory as PEP.
B. Update the new authorized signatories in the customer profile.
C. Perform enhanced due diligence for the customer and update the KYC profile.
D. Update the list of signatories and perform enhanced due diligence in the next periodic refresh
cycle.
Answer: C

69.A professional dealer in precious metals and stones in an EU country plans to implement
measures to reduce the risk of being misused for money laundering purposes.
Which measures are most relevant for achieving this goal? (Select Two.)
A. Only accept trades related to precious metal pool accounts maintained by sophisticated precious
metal companies.
B. Stop accepting payments from persons other than the beneficiary.
C. Limit direct contact between customer and employees.
D. Limit the acceptance of purchases without adequate customer identification information.
E. Stop accepting cash payments in currencies other than Euro.
Answer: B,D

70. Similar techniques are used to move funds.

A. 1 and 2 only
B. 1 and 3 only
C. 2 and 4 only
D. 3 and 4 only
Answer: C

71.Bank A is located in Country A. A wire transfer from Bank B located in Country B is processes by
Bank A, where the funds are being moved to a customer at Bank C located in Country C. The wire
transfer is deemed suspicious by Bank A.
A. The transaction in Country A.
B. Bank B in Country A.
C. The transaction in Country B.
D. Bank C in Country C.
Answer: A

72.How does the Financial Action Task Force (FATF) measure the effectiveness of a country's efforts
to combat money laundering and terrorist financing?
A. Mutual evaluation
B. FATF Evaluation Committee
C. Basel Committee
D. Series of internal audits followed by reporting to FATF
Answer: A

73.Upon a routine account review a money laundering investigator identified a number of large round
dollar wire transfer deposits into a business account owned by a local auto repair shop. The wire
transfers all originated from a country that is a known financial secrecy haven with poor anti-money
laundering controls. The investigator concludes there appears to be no legitimate business purpose
for the wire transfers and files a suspicious transaction report. The owner of the auto repair shop is
popular in the community and is a well known philanthropist.
To whom should the investigator escalate these concerns?
A. Audit committee
B. Chairman of the Board
C. The owner of the auto repair shop
D. The bank anti-money laundering officer
Answer: D

74.The Basel Committee on Banking Supervision issued a paper in October 2001 in which it
presented a Know Your Customer framework and recommended standards applicable to
A. Offshore banking supervisors.
B. Financial Intelligence Units.
C. banks in all countries.
D. European Financial Institutions.
Answer: C

75.A bank compliance officer has implemented enhanced monitoring rules that have identified some
unusual activity that may be indicative of human trafficking.
Which red flag should prompt additional transactional review?
A. Wire transfer activity from countries with significant migrant populations
B. Cash deposits that occur in cities where the customer resides and conducts business
C. Cash deposits that occur in cities where the customer does not reside or conduct business
D. Cash deposits that occur in cities where the customer does not reside or conduct business
followed by same-day withdrawals
Answer: D

76.What is the intentional evasion of a reporting or recordkeeping requirement?

A. Money laundering
B. Layering
C. Placement
D. Structuring
Answer: D

77.When an institution files an STR with regard to a particular account, what steps should the
institution take visa account?
A. The institution should close the account due to the obvious risk it represents
B. The institution should keep the account open due to the need to continue to monitor the account
C. The institution should consult its counsel and AML compliance officer and determine whether
closing the account is in accord with the institution’s procedures
D. The institution should not close the account due to the risk of tipping off the customer and
upsetting the criminal investigation
Answer: C

78.A compliance analyst is reviewing recent activity between a publicly traded company and a
company in a high risk jurisdiction.
Which detail suggests that escalation is warranted?
A. The activity is a reputational risk to the financial institution.
B. It is the first time the originator wires the beneficiary.
C. Beneficiary is active in a related industry.
D. Payments to the beneficiary are for large dollar amounts.
Answer: D

79.Alegal instrument executed between two nations governing cross-border information sharing is
called a:
A. Memorandum of agreement
B. Declaration of understanding
C. Memorandum of understanding
D. Mutual legal assistance treaty
Answer: D

80.Which is an objective of the Financial Action Task Force (FATF)-Style Regional Bodies (FSRBs)?
A. To issue their own recommendations, considering local typologies, ignoring the FATF 40
recommendations
B. To work in parallel with FATF by operating on the basis of (mutual, joint, or common) recognition of
their work
C. To enforce implementation of the FATF recommendations amongst its member countries
D. To work independently from FATF and to be closely involved in improving law enforcement
outcomes in their regions
Answer: C

81.When deficiencies are identified in the Financial Action Task Force (FATF) mutual evaluation
report, the assessed country needs to:
A. address the shortcomings identified in the report and agree to post-assessment monitoring by
FATF.
B. request exception from the relevant FATF-style regional body by submitting a report with the
reasons.
C. pay a penalty for the delay in adopting the FATF 40 recommendations accurately and timely.
D. prepare a report to defend its position against the FATF secretariat, which is comprised of the
assessors.
Answer: A

82.Which two aspects of precious metals pose the highest risk of money laundering? (Choose two.)
A. Some precious metals can be formed into other objects, making easier to transport
B. Precious metals have high intrinsic value in a relatively compact form and are easy to convert into
currency
C. The value of precious metals can be inflated easily, making it easy to increase the amount of
money laundered
D. Precious metals can be readily used in many high-tech commercial applications, making them all
the more valuable
Answer: A,B

83.Which of the following is an important factor to consider when setting up an anti-financial crimes
(AFC) compliance program governance structure?
A. Ensuring the structure is reviewed by an outside auditor or consultant
B. Establishing a system of internal controls commensurate with the institution’s size and complexity
C. Designating a qualified board of directors to monitor day-to-day compliance
D. Establishing clear roles and responsibilities for AFC risk escalations and issues
Answer: D

84.A financial institution recently purchased anti-money laundering software. The software routinely
generates more alerts than the anti-money laundering staff can properly analyze as a result of limited
staffing. These alerts are generated by default software rules.
Which of the following should the individual responsible for setting the anti-money laundering software
parameters recommend?
A. Reset software parameters to reduce risk sensitivity.
B. Disable the software until more staff are trained to process alerts.
C. Ensure alert parameters are based on risk.
D. Adjust software parameters so the number of alerts decrease gradually.
Answer: C

85.In performing a risk analysis, which factor(s) should a financial institution review?
A. The level of its gross revenue
B. Recent regulatory actions against financial institutions of comparable size
C. Its customer base, location, products and services
D. The adequacy and completeness of its STR filings
Answer: C

86.A precious metals dealer opens a new account with a bank.

Which requires a referral to AML Investigations for further review?
A. International outgoing wires to diamond dealers that are part of the diamond pipeline.
B. Payments received on the account reference unknown companies in the instructions.
C. International incoming payments from foreign companies in which the precious metals dealer has
an established relationship.
D. Multiple daily point of sale transactions from third parties that appear to be individuals.
Answer: B

87.Which of the following is the main reason Internet gambling is an ideal web-based money
laundering method?
A. Ease of connection and low subscription rate with major Internet service providers.
B. High credibility of gambling websites.
C. Ability to transfer value across jurisdictions.
D. Large number of offshore websites located in known high-crime areas.
Answer: C

88.What are three elements of a sound Customer Due Diligence Program?

A. Determination of what type of customer the financial institution will accept
B. Training as to how and to what extent to identify prospective customers
C. Obtaining date of birth and address of a prospective customer
D. Determination of who in the institution should be assigned to the prospective customer as a liaison
Answer: A,B,C

89.According to the Financial Action Task Force 40 Recommendations, Designated Non-Financial

Businesses and Professions include
A. commodities traders.
B. money services businesses.
C. hawala operators.
D. real estate agents.
Answer: D

90.What reputational risk consequence could a financial entity face for violating AML laws?
A. Seizure of assets
B. Monetary penalties
C. Increased audit costs to monitor behavior
D. Loss of high-profile customers
Answer: D

91.An anti-money laundering specialist at a large institution is responsible for information senior
management about the status of the anti-money laundering program across the organization.
Which report is the most useful?
A. The total credit exposure for non-cooperative countries and territories
B. Results of related audits and examinations
C. Details on inquires received from law enforcement
D. Notification of management changes in the different major divisions
Answer: B

92.On who does the ultimate responsibility for an institution’s anti-money laundering program rest?
A. The designated AML Compliance Officer
B. The institution’s Board of Directors
C. All employees with customer contact
D. The government regulator examining the AML program
Answer: B

93.Which should authorities do to safeguard AML information exchanged with other countries?
A. Protect exchanged information as they would protect similar information received from domestic
sources.
B. Require the use of non-disclosure agreements with anyone accessing the exchanged information.
C. Use the court system to ensure confidentiality of exchanged information through court orders.
D. Destroy the information once the investigation is complete.
Answer: A,B

94.The findings of an internal audit discover that a large group of employees do not know how to
handle Politically Exposed Persons (PEPs).
Which is the next course of action that should be taken?
A. Create a company-wide training program.
B. Revamp the compliance program to better identify PEPs.
C. Ensure all new-hire individuals have in-depth knowledge of PEPs.
D. De-risk all PEPs from the financial institution (FI) to ensure compliance.
Answer: A
95.Which three are the most commonly used risk criteria?
A. Country Risk
B. Customer Risk
C. Reputation Risk
D. Product and Service Risk
Answer: A,B,D

96.A junior account manager within an international private bank in Country A was asked by one of
his valued customers, who has held an account for several years in the institution, about depositing a
large sum of cash into her account. The junior account manager informed his customer that his bank
does not accept cash. The junior account manager later reviewed a customer activity report and
noticed a number of smaller dollar wires from banks in neighboring Country B, which has lax currency
controls, that totaled about as much as the customer intended to deposit.
What should the junior account manager do?
A. Close the account
B. File a suspicious transaction report with the Financial Intelligence Unit
C. Notify the anti-money laundering specialist of his bank, but do not call the customer
D. Offer the customer a more secure method of depositing in the hope of learning something more
during the conversation
Answer: B

97.Gatekeepers, including accountants, can be well-positioned to identify and detectchanges in the

type of work or the nature of a client’s activities.
In order to do so, they need to understand the risks associated with: (Select Two.)
A. The seasoning of accounting clients.
B. Corporate entity customers.
C. The subject matter of requested services.
D. Short-term client relationships.
Answer: B,C

98.What are three indicators of money laundering associated with using electronic funds transfers?
Choose 3 answers
A. Funds transfers to or from a financial secrecy haven without an apparent business reason
B. Regular and frequent transfers from the account of a large company said to be payment for goods
bought on credit
C. Funds transfers are received or sent from the same person to or from different accounts
D. Payment or receipts with no apparent link to legitimate contracts, goods or services
Answer: A,C,D

99.Arecruitment manager in the human resources department of a bank has shortlisted a candidate
for the position of relationship manager in its private banking division.
The bank’s compliance policy requires proper background checks to protect against fraud and money
laundering risks.
Which resources would be most useful for identifying potential negative information regarding the
shortlisted candidate? (Select Three.)
A. Past employment records.
B. Personal references from close associates.
C. Personal resume.
D. Internet and public media searches.
E. Criminal history searches.
Answer: A,D,E

100.Which of the following is a red flag indicating potential money laundering or terrorism financing
through dealers of precious metals or high-value items?
A. A customer wants to purchase gold bars with a combination of cash and cryptocurrency.
B. A customer pays an antique dealer with a credit card for a high-value antique item.
C. A customer wants a handwritten receipt for acash purchase of a high-end, limited-edition luxury
watch.
D. A customer specifically requests to purchase a Kimberly Process-certified cut diamond.
Answer: C

101.An employee hears a colleague on the telephone with a customer giving advice on how to ensure
that a suspicious transaction report will not be filed as a result of a future transaction.
What action should the employee take?
A. Report the conversation to the local police
B. Report the conversation to the compliance officer
C. Tell the colleague that it is against policy to give such advice
D. Ignore the situation because the colleague is the relationship manager for that customer
Answer: B

102.Which response represents a high-level principle for FATF-Style Regional Bodies (FSRB)?
A. Membership, mission, financial procedures, and budget
B. Dependent with different experiences to strengthen the overall effort
C. Access to documents and assistance with meetings
D. Reciprocity for effective participation and recognition of work
Answer: D

103.A profitable commercial customer who operates an import-export business has multiple accounts
with the same institution at branches m different locations. The customer receives funds from a
jurisdiction perceived as highly corrupt according to Transparency International ratings. The customer
makes frequent transfers among the accounts and prefers to manage the accounts separately.
What should the institution do to mitigate the risk associated with these accounts?
A. File a suspicious transaction report
B. Diminish the importance of the subjective Transparency International rating
C. Conduct a trade-price manipulation analysis
D. Develop a system to monitor all the activity
Answer: D

104.An oil exploration company based in France does business with oil refineries in Iran, which is
subject to comprehensive Office of Foreign Assets Control (OFAC) sanctions.
What type of OFAC sanctions should be imposed against the French company?
A. Sectoral
B. Country-based
C. Secondary
D. List-based
Answer: C

105. Conduct a site visit and meet all the principals and beneficial owners in person.

106.Which of the following are key AML measures that a regulated asset management company in
the European Union (EU)should implement? (Select Two.)
A. Performing negative news checks of prospective customers.
B. Rejecting any politically exposed persons (PEPs)as customers.
C. Inviting prospective customers for an onboarding interview.
D. Understanding the source and origin of assets.
E. Producing financial stability reports on interesting customers.
Answer: A,D

107.The compliance officer at an EU bank is investigating one of the customer accounts maintained
with the bank for the last two years. According to bank records, the company's primary economic
activity is import and export of petrochemical products Over a period of one year, the account
transactions have exceeded US$500 million with various high-value inward wire transfers received
from suppliers in Yemen followed by outward wire transfers to counterparties in Azerbaijan.
Which factor should give the compliance officer the greatest concern If observed in the investigation?
A. Media searches reveal a report that the customer was accused of misconduct three years ago.
B. The EU bank considers the origin and destination countries Involved in the transactions to be high-
risk.
C. The customer's activity includes multiple cross-border transactions involving various
counterparties.
D. The EU bank received no originator or beneficiary information for the wire transfers.
E. The customer specializes in the import and export of petrochemical products.
Answer: A

108.A comprehensive set of risk-based guidelines for maintaining business relationships is being
developed.
Which situation indicates that the institution should terminate the relationship with a client?
A. The client does business in countries with active terrorist organizations.
B. The client conducts international financial transactions exceeding U.S. $500 million.
C. The client exceeds the criteria of an acceptable risk model created by another institution that is not
similar in size and complexity.
D. The client exceeds the criteria of an acceptable risk model created by the institution and does not
perform acceptable remedial actions.
Answer: D

109.Which method is used to launder money in casinos?

A. Purchase chips with cash and play at a table
B. Purchase chips with cash and redeem for cash
C. Purchase chips with cash and redeem for a check
D. Purchase chips with cash and sell to another person for cash
Answer: D

110.Which of the following employee behaviors would not trigger an AML red flag?
A. An employee lives a lavish lifestyle that could not be supported by his or her salary.
B. An employee is involved in an excessive number of unresolved exceptions.
C. An employee uses company resources to further private interests.
D. An employee generates high earnings on investments made on the stock market.
Answer: D

111.A senior government official is trying to open an account in a financial institution (FI) that
operates in
a different country from where the official is domiciled. The official is using an asset manager
intermediary to represent them.
According to the Wolfsberg Group, which next steps should the FI take regarding the opening of the
account? (Select Three.)
A. Report to authorities that a possible suspicious activity is being undertaken by a politically exposed
person.
B. Screen for applicable sanctions only for the official in the name of the person for whom the account
will be opened.
C. Reasonably establish if the source of wealth and funds of the official is legitimate.
D. Perform due diligence procedures on the managing intermediary.
E. Determine whether the intermediary representative is acting on the officer's behalf.
F. Ensure the official's client file is updated so that the information is maintained in a consistent and
complete manner.
Answer: C,D,E

112.A bank compliance officer discovers cash deposit activity inconsistent with the expected and
historical cash activity within the personal accounts of the chairman of the board. The cash activity
appears structured to avoid the local legal filing requirements for large cash transactions, and a
suspicious transaction report (STR) was filed.
How should the compliance officer report the filing of the STR to the board of directors without
revealing the existence of the filing to the subject?
A. Inform the legal counsel of the bank
B. Follow the financial institution’s established STR reporting policy
C. Notify the financial institution’s regulator to disclose the activity
D. The compliance officer and the chief executive officer should jointly interview the chairman
Answer: B

113.Which of the following activities conducted at a financial institution is the strongest example of
avoiding reporting thresholds?
A. Making small cash deposits over the course of a week.
B. Performing transactions by check (cheque) or other payment instrument.
C. Conducting small cash transactions at multiple locations during the same day.
D. Establishing both a personal and business account and depositing cash in both.
Answer: C

114.A recent anti-money laundering audit revealed several regulatory reporting violations and lapses
with the organization’s anti-money laundering policy. As a result, the compliance officer has created
a follow-up matrix to document progress in correcting the identified deficiencies.
To whom should the compliance officer provide regular updates of corrective action to help ensure
the appropriate oversight?
A. Audit management
B. Human Resources
C. Business line managers
D. Designated board committee
Answer: D

115.Which of the following best describes one of the principal threats of proliferation financing?
A. Adversary governments using sophisticated attacks to threaten critical infrastructure and sectors,
including finance, health care and energy
B. Networks of individuals and entities exploiting financial systems to move funds that will be used to
acquire weapons of mass destruction or their components
C. Transnational criminal organizations expanding their engagement into more varied types of illicit
activities, including human trafficking and corruption
D. Networks of individuals and entities raising funds to further proliferate their ideological goals wholly
or in part through unlawful acts of force or violence
Answer: B

116.When making an independent determination on whether to close an account based on an internal

Investigation, a financial institution (F1) should consider. (Select Five.)
A. reputational risk.
B. the customers personal relationships.
C. the frequency of account activity
D. the Fl's policies and procedures.
E. the seriousness of the underlying conduct.
F. correspondence with law enforcement
G. the legal basis for closing the account.
Answer: A,D

117.Which trading pattern may be indicative of money laundering in capital markets?

A. Free of payment asset transfer
B. Remittance of a round dollar amount
C. Trading on an account
D. Transacting with multiple counterparties
Answer: A

118.Whichsuspicious activity may be the strongest indicator of money laundering through a casino?
A. A privately held company originates fund transfers through the casino into the betting accounts of
multiple patrons.
B. A patron routinely places multiple bets on the same sporting events.
C. A patron purchases a large amount of chips at a blackjack table using cash.
D. A patron requests the casino to transfer their winnings to another gambling operator.
Answer: A

119.A commission rogatory would be used in which gateway to obtain information from another
country?
A. An FIU request under the Egmont principles
B. An MLAT request
C. A supervisory channel request with the Basel Committee
D. A FATF request
Answer: B

120.Which of the following activities is most likely associated with a lawyer participating in a money
laundering scheme?
A. Frequently travels to countries considered tax havens.
B. Engages clients with high-net worth in foreign countries.
C. Represents persons accused of crimes against financial institutions.
D. Creates corporate entities to disguise true beneficial ownership of clients.
Answer: D

121.A national Financial Intelligence Unit, which is responsible for receiving, analyzing and
disseminating disclosure of financial information, should consider becoming a member of what
organization?
A. The Egmont Group
B. The Wolfsberg Group
C. The Financial Action Task Force
D. The Basel Committee
Answer: A

122.A European Union (EU) bank has a correspondent banking relationship with a U.S. bank. Under
USA PATRIOT Act Section 311, the U.S. government has enacted special measures against a
designated entity that has a payable-through account with the EU bank.
Which of the following actions might the U.S. bank be required to take regarding the EU bank's
services for the designated entity?
A. Ensure the designated entity's confidential information is not shared with other entities.
B. Obtain additional information about customers permitted to use this account.
C. Verify that the EU bank serves the designated entity.
D. Perform enhanced due diligence on the EU bank.
Answer: B

123.It Is important for financial institutions (FIs) to be aware of anti-financial crime (AFC) and
sanctions regulatory regimes in other jurisdictions in order to.
A. maintain compliance with the AFC and sanctions requirements of all countries where the F1
operates or has business relationships and to avoid penalties for violations in foreign jurisdictions.
B. ensure that sanctions regimes are applied selectively based on the regulatory standards of the
countries where business activities occur, focusing primarily on aligned jurisdictions
C. compensate for the limited applicability of AFC and sanctions regulations on cross-border
transactions and their reduced relevance for domestic operations in other jurisdictions.
D. ensure the F1 can manage business relationships in jurisdictions with stricter or more lenient
regulations than their home country, allowing for operational flexibility
Answer: A

124.Trusts established in certain offshore jurisdictions make good vehicles to lay under money for
which of the following reasons?
A. Names of the settlor and beneficiaries are into publicly available.
B. Trusts are typically set up to minimize taxes.
C. Offshore jurisdictions are unfamiliar with trust.
D. Trusts may hold assets of significant size.
Answer: A

125.Which activity is most likely to facilitate money laundering through on-line banking systems with
inadequate controls?
A. Conducting a large volume of transactions
B. Providing continuous worldwide access
C. Conducting anonymous transactions
D. Conducting large value transactions
Answer: C

126. A new client who is a large volume player asks the casino operator about the ability to transfer
the funds to other locations in the same country.

127.Which is a key role of FATF-Style Regional Bodies (FSRBs)?

A. Support the system of mutual evaluation
B. Setting regional standards for combatting money laundering
C. Bring additional terrorist financing laws into action in the region
D. Enforce the specific FATF laws in the region
Answer: A

128.Which elements can trigger a review of the existing relationship during the opening of a new
account? (Select Two.)
A. Regular checks on the flow of funds
B. Recent adverse media on the client
C. A false positive result for name screening
D. Incoming transfers from high-risk jurisdictions
E. Estimated total income decrease
Answer: B,D

129.A bank’s anti-money laundering section receives an anonymous tip that a customer might be
engaging in possible money laundering.
Which two facts should be considered during the course of an investigation into this matter? (Choose
two.)
A. The customer has had a long-standing account at the bank
B. The customer in on the exempt list for currency transaction reporting requirements
C. The customer is issuing a number of wires to several relatively high-risk jurisdictions
D. The customer’s account has had a large volume of activity, but the month-end balance is usually
low
Answer: C,D

130.Which measure to mitigate risk does the Basel Committee’s Customer Due Diligence Principles
suggest banks apply when accepting business from non-face-to-face customers?
A. Certification of documents presented
B. Requiring an in person interview with the customer
 C. Imposing a limit on permissible account activity for a defined period of time
D. Requiring additional review of account opening documents by senior management
Answer: A

131.Whichoperational situation might indicate that money laundering is occurring at or through a

deposit-taking financial institution?
A. The institution has observed an increase in customer demand for large-denomination banknotes.
B. The institution has observed an increase in the adoption of its digital products and services.
C. The institution has observed a reduced settlement time in the transaction services that support the
rapid movement or remittance of funds.
D. The institution maintains a sequentially numbered log of the monetary instruments it sells.
Answer: A

132.What types of things should an institution incorporate in it AML policies and procedures? Choose
3 answers
A. On-going training, as well as initial training of new employees
B. Periodic audits, to be performed by independent staff at least once a year
C. Ability to incorporate relevant legislative and regulatory AML changes
D. Review of the AML policy by the Board of Directors
Answer: A,B,C

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