ACAMS Exam 75 Questions with Verified Answers,100% CORRECT

ACAMS Exam 75 Questions with Verified Answers Identify the 3 important tasks that FATF focuses on - CORRECT ANSWER 1. Spreading the anti-money laundering message worldwide 2. Monitoring implementation of the FATF R ...

ACAMS Exam 75 Questions with Verified Answers Identify the 3 important tasks that FATF focuses on - CORRECT ANSWER 1. Spreading the anti-money laundering message worldwide 2. Monitoring implementation of the FATF Recommendations among FATF members 3. Reviewing ML trends and counters asures According to the FATF 40 Recommendations, the complete set of countermeasures against ML and TF cover what 5 elements? - CORRECT ANSWER 1. Identification of risks and development of appropriate policies 2. Criminal justice system and law enforcement 3. The financial system and its regulations 4. The transparency of legal persons and arrangements 5. International cooperation Describe FATF's Recommendation 15 (2012) on new technologies. - CORRECT ANSWER Countries and FI should assess the risks associated with developments of new products, business practices, delivery mechanisms and technology. FI should assess these risks prior to launching new products; they should also take appropriate measures to mitigate the risks identified. What are six principles set forth in the Basel Committee's Statement of Principles called "Prevention of Criminal Use of the Banking System for the Purpose of Money Laundering"? - CORRECT ANSWER 1. Customer identification, 2. Compliance with laws, 3. Conformity with high ethical standards and local laws and regulations, 4. Full cooperation with national law enforcement to the extent permitted without breaching customer onfidentiality, 5. Staff training, and 6.Record keeping and audits. Identify the seven specific customer identification issues as identifiedin the Basel Committee's October 2001 paper called "Customer Due Diligence for Banks." - CORRECT ANSWER 1. Trust, nominee and fiduciary accounts, 2. Corporate vehicles, particularly companies with nominee shareholders or entities with shares in bearer form, 3. Introduced businesses, 4. Client accounts opened by professional intermediaries, such as "pooled" accounts managed by professional intermediaries on behalf of entities such as mutual funds, pension funds and money funds, 5. Politically exposed persons 6. Non-face-to-face customers, i.e., customers who do not present themselves for a personal interview, and 7. Correspondent banking. Three lines of defense in banks AML effort - CORRECT ANSWER 1. line of business 2. AML compliance function 3. Internal Audit What are the EU AML directives? - CORRECT ANSWER Prevents the misuse of the financial system to keep fraud and terror financing at bay. First EU directive - CORRECT ANSWER confined predicate offenses of money laundering to drug trafficking Second EU directive - CORRECT ANSWER -amended the first one to require stricter money laundering controls across the continent - brought bureaux de change and money remittance offices under AML coverage. -Included people subject to the obligations of the Directive. Covered groups included lawyers auditors, external accountants, tax advisers, real estate agents, notaries and legal professionals. Third EU directive - CORRECT ANSWER -Defining ML and TF as separate crimes - Extending customer identification and suspicious activity reporting obligations to trusts and company service providers, life insurance intermediaries, and dealers selling goods for cash payments of more than 15,000 euros; -Requiring all financial institutions to identify and verify the beneficial owner of all accounts held by legal entities or persons. Fourth EU directive - CORRECT ANSWER - Customer due diligence is to be applied for transfers of funds exceeding 1,000 euros. -New definitions for: correspondent relationship; PEPs' family members and persons known to be close associates; senior management and others. Payable Through Account - CORRECT ANSWER Transaction account opened at a depository institution by a foreign financial institution through which the foreign institution's customers engage, either directly or through sub-accounts, in banking activities and transactions in the country where the account was opened. EX: I have an acct at Bank of China and correspondent bank is JP Morgan and sending to my sister who has Citibank> W/PTA no more BOC and just use JPMorgan Concentration Account - CORRECT ANSWER -internal accounts established to facilitate the processing and settlement of multiple or individual customer transactions within the bank, usually on the same day. -are frequently used to facilitate transactions for private banking, trust and custody accounts, funds transfers and international affiliates. Why are money service business (MSB) frequently accused of being high risk for ML? - CORRECT ANSWER MSBs generally charge lower commission rates than banks charge making them attractive to criminals What three actions should employees be instructed to do during an internal investigation - CORRECT ANSWER 1. inform counsel of all request for documentation 2.make copies of all documents provided to law enforcements 3. Keep a law of documents requested When a bank performs a risk assessment, what areas should an institution focus on? - CORRECT ANSWER 1. The type and location of the institutions clients 2. The nature and breadth of services and products the institution provides 3. The geographical location where the institution does business To what extent should senior management and the Board of Directors be involved in the filing of any STR? - CORRECT ANSWER They should be informed of all significant STRs and the numbers and trends of the filings What is the most effective criterion for determining the beneficial ownership of funds? - CORRECT ANSWER being the person in whose name an account is opened with a financial institution When an institution receives a document request from law enforcement with regard to an STR that the institution has filed, what should institution do? - CORRECT ANSWER Turn over the documents that were previously collected to support the STR Which method is indicative of potential ML and TF activity? - CORRECT ANSWER An unknown client pays $1,000 cash for urgent transfer to a high risk country An anti-money laundering audit identifies a significant weakness in how transaction monitoring alerts are cleared. Audit sampling identified potentially suspicious activity that was cleared as not suspicious. Management accepts the audit findings and develops a remediation plan. What is the role of the auditor during the correction phase? - CORRECT ANSWER Validating the successful remediation of the issue one management indicates the issue is resolved A bank account is established for a new business customer. The business was established five years ago with an address in another state. The business website contains few details other than stating it is in a real estate business. One principal has an international telephone number and appears to be living in another country. The other principal works out of a recreational vehicle. What warrants enhanced due diligence in this scenarios? - CORRECT ANSWER Shell company To ensure compliance with economic sanctions established by governmental authorities in the jurisdiction were it operates, a financial institution requires that all new and existing customers be screened at onboarding and quarterly thereafter. Is this step sufficient to ensure compliance? - CORRECT ANSWER Yes, this is recommended by the international guidance A compliance officer was recently reviewing transactional data for an international charity and found transactions that present a higher risk. Which reason is cause for terminating that banking relationship? - CORRECT ANSWER The charity is headquartered in a country on the OFAC list Historically, a tour guide has made monthly cash deposits averaging $10K. Over the past three months, the monthly deposits have averaged $100K. When the financial institution questions the increased deposits, the tour guide explains that there have been numerous conversations in town so business has increased substantially. Which further action (s) should the FI take? - CORRECT ANSWER perform further investigation, if appropriate report the activity to the authorities and consider terminating the relationship A recent AML audit revealed several regulatory reporting violations and lapses with the organizations AML 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? - CORRECT ANSWER Designated board committee How does the FATF communicate its findings regarding jurisdictions with strategic AML/CTF deficiencies? - CORRECT ANSWER By issuing four formal documents to the deficient jurisdictions What must be materially true regarding transactions for US sanctions laws to have jurisdiction? - CORRECT ANSWER Transactions are stripped of beneficial owner information 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, a SAR was filed. How should the CO report the filing of the SAR to the board of directors without revealing the existence of the filing to the subject? - CORRECT ANSWER Inform the legal counsel of the bank - only because it's the chairman of the board. Anyone else you would follow the FI established SAR reporting policy. A CO at a small community bank has been asked to review the existing customer onboarding policies and procedures to ensure they adequately address AML risks. How should customer due diligence be implemented? - CORRECT ANSWER As an ongoing activity that may vary commensurate with the risk profile of the customer. Which red flag indicates high potential for ML in a real estate purchase? - CORRECT ANSWER The purchaser is a nominee A CO provides an overview of the bank's AML program to a group of new tellers during employee orientation. Which training element should be delivered to this audience? - CORRECT ANSWER Large cash transaction reporting procedures Who has the ultimate responsibility within a bank for ensuring that the bank has a comprehensive and effective Bank Secrecy Act/AML (BSA/AML) program and oversight framework that is reasonably designed to ensure compliance with applicable regulations? - CORRECT ANSWER Board of directors A bank employee reviews wire transactions looking for indications of wire stripping. Which two actions should the employee take to complete appropriate bank procedures? - CORRECT ANSWER Identify large incoming wire transactions on behalf of a foreign client with no explicit reason and identify wire transaction activity to or from a financial institution located in a higher risk jurisdiction FATF style regional bodies are created and obligated to understand the inherent ML and TF risks in the region of the world they serve. Wha is one of the methods they use to understand these risks? - CORRECT ANSWER They conduct regional-level research and analysis of the ML and TF methods and trends using standards and templates used for FATF typologies reports An institution is about to release a new peer to peer (P2P) funds transfer product to provide much needed remittance services to an under-banked population segment in the country. The service allows customer's to transfers funds through a mobile banking application to individuals worldwide entering only a name and mobile #. The new service charges less than comparable market solutions and offers real time transfer of funds. The customer onboarding process is conducted at branch locations with identify verification. Which tree present the highest AML or sanctions risk and will require controls prior to launch> - CORRECT ANSWER Customer onboarding, Cross-border functionality, Limited access to counter-party information An automotive parts company in South America sends multiple $500K wire transfers per week to ABC holdings LTD in Asia referencing payments for silk flower shipments. Research reveals Sunrise Holdings LTD is registered in BVI with no available ownership info. What are two red flags that indicate how trade-based ML could be occurring in this instance? - CORRECT ANSWER The transaction involves the use of front (or shell) companies and Significant discrepancies appear between the description of the commodity on the bill of landing and the invoice What do FATF style regional bodies do for their members to help combat ML and TF? - CORRECT ANSWER They provide technical assistance to members in implementing FATF recommendations In which two ways does a government Financial Intelligence unit (FIU) interact with public and private sectors? - CORRECT ANSWER It receives and analyzes disclosures filed by financial and non-bank institutions and It disseminates information and the results of its analysis to competent authorities Which two factors should increase the risk of a correspondent bank customer and require additional due diligence according to the Wolfsberg AML Principles for Correspondent Banking? - CORRECT ANSWER The customer is located in a FATF member country and provides services to other correspondent banks in neighboring countries and The customer is located in a non FATF member country and services mostly commercial customers who engage in international trade A new CO is reviewing the bank's AML program and notices that the risk of assessment was completed 6 months ago. Since that time, the bank acquired another FI, renamed the internal records group and streamlined cashed handling procedures. Which factors causes the CO to update the bank's risk assessment? - CORRECT ANSWER The bank acquired another institution A retail bank has just acquired a credit card business. The banks AML policy requires that new employees are trained within 30 days of their hire date and refresher training is delivered to all employees on an annual basis. Is the bank's existing AML training adequate to be delivered to employee of the newly acquired credit card business? - CORRECT ANSWER Yes, the existing training covers the AML regulations that the bank is required to follow. A customer living in a HRJ makes frequent, large cash deposits at a bank. The same customer sends small wire transfers to unrelated parties in other HRJ. What are two red flags that may indicate ML? - CORRECT ANSWER Wire transfers are to HRJ and Large cash deposits are from a HRJ A foreign bank operating under an offshore license wants to open a correspondent account with a US bank. The foreign bank plans to provide payable through account services to some of its customers. What must the foreign bank provide to the US bank under the USA PATRIOT Act? - CORRECT ANSWER A list of account holders at the financial institution who will use the payable through account (PTA) A non-US bank wants to open an account at Bank A which is a US based bank. Which information must Bank A obtain under the USA PATRIOT Act? - CORRECT ANSWER The identity of owners and percentage of ownership of the non US bank and The details of the non US bank's AML compliance training program A bank CO has implemented enhancing monitoring rules that have identified some unusual activity that may be indicative of human trafficking. Which red flag should prompt additional transactional review? - CORRECT ANSWER Cash deposits that occur in cities where the customer does not reside or conduct business followed by same-day withdrawals A CO at an insurance company has been reviewing the transaction activity of several clients. Which transaction is considered a red flag for potential ML? - CORRECT ANSWER A client from a HRJ recently purchased property insurance for real estate development A CO learns from an IT source of a potential new financial service being discussed by the new product approval committee. What is the correct next course of action? - CORRECT ANSWER Start initial research into potential risks but wait until notified that the service has been approved by the committee before initiating extensive research Upon a routineT account review a ML investigator identified a number of large round dollar wire transfer deposits into a business account owed by a local auto repair shop. The wire transfers all originated from a country that is a known financial secrecy haven with poor AML controls. The investigator concludes there appears to be no legit business purpose for the wire transfers and files a SAR. 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? - CORRECT ANSWER The bank AML officer What are two requirements for monitoring and reporting suspicious activity for correspondent banking according to the Wolfsberg Principles? - CORRECT ANSWER Incorporate due diligence results such as customer risk ratings and Utilize downstream correspondents to investigate and report suspicious activity What are two sources for maintaining up-to-date sanctions information? - CORRECT ANSWER US Dept of Treasury Office of Foreign Assets Control and FATF's list of HRJ and Non-Cooperative Jurisdictions Which two statements in the Wolfsferg Group's "Suppression of the Financing of Terrorism" define the role financial institutions should play in the fight against terrorism? - CORRECT ANSWER 1. FI need to assist competent authorities in fighting TF through prevention, detection and info sharing. 2. FI 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 FATF has focused its work on what activities? - CORRECT ANSWER 1. Standard setting 2. Ensuring effective compliance with the standards 3. identifying ML and TF threats Which of the following provides AML specialists information related to ML trends> - CORRECT ANSWER 1. Egmond Groups 100 Cases 2. FATF Typologies Egmont Group of Financial Intelligence Units - CORRECT ANSWER The Egmont Group of consists of a numerous national of financial intelligence units (FIUs) that meet regularly to find ways to promote the development of FIUs and to cooperate, especially in the area of information exchange, training and the sharing of expertise. The goal of the group is to provide a forum for FIUs to improve cooperation in the fight against money laundering and the financing of terrorism, and to foster the implementation of domestic programs in this field. USA PATRIOT Act Section 312 - CORRECT ANSWER requires institutions must set up risk based due diligence to mitigate the ML risks posed by foreign FI USA PATRIOT Act Section 313 - CORRECT ANSWER Prohibits US FI from opening or maintaining correspondent accounts for foreign shell banks and requires them to take "reasonable steps" to ensure that a correspondent account of a foreign bank is not being used indirectly to provide banking services to a shell bank USA PATRIOT Act Section 319 - CORRECT ANSWER Requires US FI to maintain records with the names and address of the owners of foreign banks for which they maintain correspondent banks Wash Trading - CORRECT ANSWER What is the term for trading through multiple accounts, where an individual generates offsetting profits and losses and transfers of positions through accounts that do not appear to be commonly controlled? Which three statements are true regarding the extraterritorial reach of laws and legislation of the U.S.? - CORRECT ANSWER 1. The criminal anti-money laundering law can apply to transactions that occur partially overseas 2. Economic and trade sanctions by OFAC may pose extraterritorial risks for financial institutions and businesses outside the U.S. 3. The defendant does not need to know the funds came from an illegal activity under state, federal or foreign law The purpose of an anti-money laundering program should be to do what? - CORRECT ANSWER Focus monitoring efforts on riskier transactions and customers What should an effective anti-money laundering training program include? - CORRECT ANSWER Real-life money laundering examples Which precaution will a money launderer take to avoid detection when sending electronic transfers? - CORRECT ANSWER Misspelling names to foil watch-list filtering systems What does designing a country as being of "prime money laundering concern" allow the U.S. government to do? - CORRECT ANSWER Close some or all correspondent or payable-through accounts In May 2002, the Wolfsberg Principles on Private Banking were revised and included a section that prohibits the use of internal non-client accounts in a manner that would prevent officials from appropriate monitoring movements of funds or keep clients from being linked to the movement of funds on their behalf.What is another name for these internal, non-client accounts? - CORRECT ANSWER Concentration accounts The bank for International Settlements provides the secretariat for which organization? - CORRECT ANSWER The Basel Committee What is the primary action a financial institution should take before formulating its anti-money laundering program? - CORRECT ANSWER It should perform a comprehensive risk analysis What was the topic the Wolfsberg Group's first guidance addressed? - CORRECT ANSWER Private banking In relationship to life insurance business, the third European Directive states that Member States may allow the identity verification of the beneficiary under the policy after the business relationship has been established, but before which events? - CORRECT ANSWER At or before the time of payout or before the beneficiary intends to exercise rights vested under the policy What are two legal risks of having inadequate privacy policies and procedures? - CORRECT ANSWER Industry of regulatory sanctions Charges of deceptive business practices The compliance officer for a private bank has been tasked with writing a policy on how the bank will deal with intermediaries.Which two aspects should be included in the policy in respect of intermediaries to align it with the Wolfsberg Anti-Money Laundering Principles for PrivateBanking? - CORRECT ANSWER Where an intermediary introduces clients to the bank, the bank must obtain the same type of information with respect to an introduced client that would otherwise be obtained by the bank, absent the involvement of the intermediary. Where an intermediary manages assets on behalf of a number of clients and arranges for the opening of accounts for its clients with the bank, and that intermediary is a financial institution subject to similar regulations, it is necessary for the bank to perform due diligence on the intermediary's clients. A United States (U.S.) bank was recently alerted by law enforcement of an increase in sale of large denomination U.S. bank notes to casas de cambio. They suspect that a Mexican syndicate is operating a money laundering scheme in the bank's jurisdiction.Which two steps should be taken to trace funds through the bank to assist law enforcement in their investigation? - CORRECT ANSWER Identify deposits by casas de cambio that include third-party items including sequentially numbered monetary instruments Identify multiple wire transfers initiated by casas de cambio to jurisdictions outside of Mexico that bear no apparent business relationship with that casa de cambio Which requirement is included in the Fourth European Union Directive on money laundering? - CORRECT ANSWER It requires member countries to maintain registries of the beneficial owners of legal entities A compliance officer was recently reviewing transactional data for an international charity and found transactions that present a higher risk.Which reason is cause for terminating the banking relationship? - CORRECT ANSWER The flow of funds both in and out are complex and hard to trace 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? - CORRECT ANSWER Certification of documents presented