Question 1

How does the Financial Action Task Force (FATF) measure the effectiveness of a country's efforts to combat money laundering and terrorist financing?

Accepted Answer

A

Explanation: "The FATF measures the effectiveness of a country's efforts to combat money laundering and terrorist financing through a mutual evaluation process. During a mutual evaluation, the FATF assesses a country's legal and institutional framework, its implementation of measures to combat money laundering and terrorist financing, and the effectiveness of its efforts. The FATF then issues a report with recommendations for improvement" [CAMS Study Guide 6th edition, page 15-16].

Question 2

In which case should an investigator avoid escalating a suspicious event to the chief compliance officer and pursue other channels?

Accepted Answer

B

Explanation: An investigator should avoid escalating a suspicious event to the chief compliance officer if there is a potential conflict of interest, such as when a close family member of the officer is involved in the transaction. In such a case, the investigator should pursue other channels, such as reporting to a higher authority or an independent committee. The other options do not present a conflict of interest and should be escalated to the chief compliance officer as part of the normal procedure. Reference: Advanced CAMS-FCI Certification Handbook, page 18.

Question 3

During a review, an analyst notices discrepancies between a customer's nature of business listed on the business registry and what was stated on the customers application. The analyst should:

Accepted Answer

A

Explanation: The analyst should clarify discrepancies noted in the customer’s declared profile given the downstream impact on the risk assessment. This is because discrepancies between the customer’s nature of business and the information on the business registry may indicate that the customer is not operating a legitimate business or is trying to conceal its true activities. The analyst should verify the customer’s identity, source of funds, and purpose of transactions to ensure that the customer’s risk profile is accurate and consistent with the Fl’s risk appetite. Reference: Leading Complex Investigations Certificate, Module 2, page 9.

Question 4

What action does the USA PATRIOT Act allow the US government to take regarding financial institutions (FIs) that are based outside of the US?

Accepted Answer

B

Explanation: According to the CAMS manual 6th edition, the USA PATRIOT Act allows the US government to subpoena documents from foreign financial institutions (FIs) that have no presence in the US (option B). The manual states that "The USA PATRIOT Act provides US law enforcement agencies with the power to subpoena documents from foreign banks that maintain correspondent accounts with US banks or have no presence in the United States" (p. 77).

Question 5

The law enforcement agency (LEA) of a foreign jurisdiction contacts a financial institution (Fl)
regarding one of the Fl's clients. The LEA advises that the client is currently wanted for prosecution as
a result of a series of human trafficking charges. What should the Fl do? (Select Two.)

Accepted Answer

Explanation: According to the Certified Anti-Money Laundering Specialist (the 6th edition), the financial institution (Fl) should take the following actions: A . Review the client's activity, determine if suspicious activity exists, and report accordingly. The Fl should assess the risk of the situation and determine if there is any suspicious activity that needs to be reported to the appropriate authorities. This would involve conducting a review of the client's account activity and transactions to determine if there are any indicators of money laundering or terrorist financing. D . Inform local LEA and regulator of the request for awareness. The Fl should inform the local law enforcement agency and regulator of the request from the foreign jurisdiction to raise awareness of the situation and determine if any further actions need to be taken.

Question 6

SAR/STR NARRATIVE
A SAR/STR has been submitted on five transactions conducted on the correspondent banking
relationship with ABC Bank.
Client Information:
Remitter information: DEF Oil Resource Ltd. is the oldest member of the DEF Group. It was founded
in 1977 as a general trading business with a primary focus on exports from Africa and North Americ
a. The group has business activities that span the entire energy value chain. Their core field of
endeavor is centered within the oil and gas industry and its associated sub-sectors.
Beneficiary Information:
As per the response received from ABC Bank, it was determined that the beneficiaries are related to
DEF Oil Resource Ltd. These were created by DEF Oil Resource Ltd. to purchase property in a foreign
country on behalf of their senior management as part of a bonus scheme. The purpose behind this
payment was for the purchase of property in another country.
Payment Reference:
ABCXXXXX31PZFG2H
ABCXXXXXX51PQGEH
ABCXXXXXX214QWVG
ABCXXXXXX41PSXA2
ABCXXXXXX815QWS3
Concerns:
• We are unsure about the country of incorporation of the beneficiaries.
• We are concerned about the transactional activity since the payment made towards entities
(conducted on behalf of individuals) appears to be possible tax evasion.
• There appears to be an attempt to conceal the identity of individuals (senior management), which
again raises concerns about the source of funds.
• Referring to the response received from ABC Bank, we are unclear about the ultimate beneficiary
of funds.
• The remitter is involved in a high-risk business, (i.e., oil and crude products trading), and the
beneficiary is involved in real estate business which again poses a higher risk.
When drafting the SAR/STR narrative, the investigator notes several payment references. What
additional information should the investigator include in the narrative?

Accepted Answer

B

Explanation: The SAR/STR narrative should include the suspicious accounts and transactions identified, as well as the reasons why they are considered suspicious. The narrative should provide a clear and concise description of the activity, the parties involved, the dates, amounts, and frequencies of the transactions, and any other relevant information that would assist law enforcement in understanding the nature and purpose of the activity. The narrative should not include the investigator’s subjective opinion, personal tax records, or supporting documentation that is not essential to explain the suspicious activity. Supporting documentation can be attached separately to the SAR/STR form or provided upon request by law enforcement.

Question 7

An investigator receives an alert documenting a series of transactions. A limited liability corporation
(LLC) wired 59.000,000 USD to an overseas account associated with a state-run oil company. A
second account associated with the state-run oil company wired 600,000,000 USD to the LLC. The LLC
then wired money to other accounts, a money brokerage firm, and real estate purchases.
The investigator initiated an enhanced KYC investigation on the LLC. The financial institution opened
the LLC account a couple of weeks prior to the series of transactions. The names associated with the
LLC had changed multiple times since the account opened. A search of those names revealed
relations with multiple LLCs. Public records about the LLCs did not show any identifiable business
activities.
Open-source research identified mixed reports about the brokerage firm.
The firm indicated it purchased mutual funds for its clients and dispensed returns to clients.
Media reports claimed the firm laundered money by holding money for a fee before returning it to
investors.
Which information should the investigator review first when examining the wire transaction
documentation?

Accepted Answer

D

Explanation: The total suspicious transaction amount that the investigator should report is 659,000,000 USD. This is the sum of the two transactions involving the LLC and the state-run oil company, which are 59,000,000 USD and 600,000,000 USD respectively. The other transactions that the LLC made to other accounts, a money brokerage firm, and real estate purchases are not relevant to the question, as they are not part of the series of transactions that triggered the alert. Reference: Advanced CAMS-FCI Certification | ACAMS

Question 8

A financial regulator is evaluating the effectiveness of a financial institution's (Fl) anti-financial crime program. Which condition should be met to satisfy the regulator?

Accepted Answer

D

Explanation: The condition that should be met to satisfy the regulator is that the program is drafted using a risk- based approach to avoid the FI being used as a conduit for criminal activities. A risk-based approach means that the FI identifies, assesses, and understands its exposure to financial crime risks and applies appropriate measures to mitigate them. This is consistent with the international standards and best practices for anti-financial crime compliance. The program being aligned with the financial industry’s anti-financial crime priorities, meeting the minimum requirements of anti-financial crime standards published by a financial industry association, or having no high-severity issues in internal auditing results are not sufficient to satisfy the regulator, as they do not necessarily reflect the specific risks faced by the FI or demonstrate its effectiveness in preventing and detecting financial crimes. Reference: [Advanced CAMS-FCI Study Guide], page 14-15; [FATF Guidance on Risk-Based Approach for Effective Supervision], page 7-8.

Question 9

Potential indicators of money laundering associated with Trust and Company Service Providers include: (Select Two.)

Accepted Answer

Explanation: This is stated in the Certified Anti-Money Laundering Specialist (the 6th edition) manual on page 595, which states: “Potential indicators of money laundering associated with Trust and Company Service Providers include the use of legal persons in jurisdictions with strict secrecy laws, structuring cash deposits into third party accounts, multi-jurisdictional wire transfers with no legal purpose, and frequent deposits to or withdrawals from bank accounts.”

Question 10

The investigations team of a financial institution (Fl) wants to perform enhanced due diligence
measures on operations done by a foreign bank related to transactions of companies that export
scrap gold and silver. What would be the next best steps for the investigations team? (Select Two.)

Accepted Answer

B, C

Explanation: The correct answers are B and C because these are the most relevant and reasonable steps for the investigations team to perform enhanced due diligence on the operations of the foreign bank and its customers. Asking for the risk rating, customer profiles, and official licenses would help the team assess the level of risk and compliance of the foreign bank and its customers, who are engaged in a high-risk activity of exporting scrap gold and silver. The other options are not appropriate because they are either premature or ineffective. Rescinding the contract, filing a SAR/STR, or closing the accounts would require more evidence and justification, and they may also damage the relationship with the foreign bank. Reference: : Precious Metals & Stones

Question 11

Which payment method for purchasing luxury items is a red flag for potential money laundering?

Accepted Answer

B

Explanation: According to the Financial Action Task Force (FATF), the use of large amounts of cash is a common method for money launderers to move illicit funds [1]. Purchasing luxury items with cash can indicate an attempt to convert illegal funds into tangible assets that can be easily resold or moved across borders. As a result, businesses that deal with luxury items are required to implement enhanced due diligence measures, including monitoring transactions involving large amounts of cash [1]. Reference: [1] Financial Action Task Force. (2013). Money Laundering & Terrorist Financing Through the Real Estate Sector. https://www.fatf-gafi.org/media/fatf/documents/reports/ML-TF-through-realestate.pdf

Question 12

A new customer has just been onboarded in a securities firm. After a few weeks, there are unusual trading patterns that are being flagged. Which pattern is most concerning to the compliance officer?

Accepted Answer

D

Explanation: The most concerning trading pattern for a compliance officer when a new customer has been onboarded in a securities firm is the customer accumulating securities of a low volume counter in small increments on a weekly basis. This type of behavior could indicate that the customer is attempting to obscure their identity or the true purpose of their trading activity, which can be indicative of money laundering or other suspicious activity. (CAMS Manual, 6th Edition, Page 170).

Question 13

An investigator is reviewing an alert for unusual activity. System scanning detected a text string
within a company customer's account transactions that indicates the account may have been used
for a drug or drug paraphernalia purchase Based on the KYC profile, the investigator determines the
customer's company name and business type are marketed as a gardening supplies company. The
investigator reviews the account activity and notes an online purchase transaction that leads the
investigator to a website that sells various strains of marijuan
a. Additional account review detects cash deposits into the account at the branch teller lines, so the
investigator reaches out to the teller staff regarding the transactions. The teller staff member reports
that the business customers have frequently deposited cash in lower amounts. The teller, without
prompting, adds that one of the transactors would occasionally smell of a distinct scent of marijuana
smoke.
Which are the best next steps for the investigator to take? (Select Three.)

Accepted Answer

A, C, E

Explanation: The best next steps for the investigator to take are: A . Review the customer’s transaction history. This can help the investigator identify any patterns or anomalies in the customer’s account activity, such as changes in transaction volume, frequency, amount, source, destination, purpose, etc. The investigator can also compare the customer’s transaction history with their KYC profile and risk rating to assess if there are any discrepancies or inconsistencies. C . Check internal KYC information. This can help the investigator verify the customer’s identity, business nature, ownership structure, expected activity, source of funds, etc. The investigator can also update or enhance the customer’s KYC information based on any new or relevant information obtained from other sources. E Conduct adverse media and open-source searches on the customer’s background. This can help the investigator find out if there is any negative or adverse information about the customer in public data sources, such as news articles, social media posts, blogs, forums, etc. Adverse media and open- source searches can also provide additional context and insight into the customer’s reputation, behavior, associations, etc. The other options are incorrect because: B . Request information from the internet service provider who hosts the website is not feasible, as it may require a legal process or a court order to obtain such information. Moreover, the internet service provider may not have or disclose any useful information about the website or its owner. D . Research other customer accounts for transactions to the same website is not relevant, as it may not provide any meaningful information about the customer under investigation. Furthermore, it may violate the privacy and confidentiality of other customers who are not related to the investigation. F . Identify if the customer has opened accounts in an urban city area is not helpful, as it may not have any bearing on the customer’s involvement in a drug or drug paraphernalia purchase. Additionally, it may not be possible to access or verify such information without the customer’s consent or authorization. Reference: Advanced CAMS-FCI Certification | ACAMS, Section 2: Investigating Financial Crimes, page 11 Leading Complex Investigations Certificate | ACAMS, Module 3: Conducting Research and Analysis, page 6 Adverse Media Screening - Using AI to Mitigate Risk Legal requirements for adverse media screening - Thomson Reuters Electronic client due diligence | Ethics helpsheets | ICAEW 6AMLD & FATF: Where Adverse Media Screening Fits In Free Adverse Media Check | NameScan

Question 14

An investigator receives an alert documenting a series of transactions. A limited liability corporation
(LLC) wired 59.000,000 USD to an overseas account associated with a state-run oil company. A
second account associated with the state-run oil company wired 600,000,000 USD to the LLC. The LLC
then wired money to other accounts, a money brokerage firm, and real estate purchases.
The investigator initiated an enhanced KYC investigation on the LLC. The financial institution opened
the LLC account a couple of weeks prior to the series of transactions. The names associated with the
LLC had changed multiple times since the account opened. A search of those names revealed
relations with multiple LLCs. Public records about the LLCs did not show any identifiable business
activities.
Open-source research identified mixed reports about the brokerage firm.
The firm indicated it purchased mutual funds for its clients and dispensed returns to clients.
Media reports claimed the firm laundered money by holding money for a fee before returning it to
investors.
Which information should the investigator review first when examining the wire transaction
documentation?

Accepted Answer

D

Explanation: The investigator should review how the wire transfers were initiated first, because this could indicate the level of involvement and knowledge of the LLC account holders. If the wire transfers were initiated online or by phone, it could suggest that the account holders were trying to avoid face-to- face contact with the bank staff and reduce the chances of being questioned or identified. If the wire transfers were initiated in person at a branch, it could indicate that the account holders were confident or careless about their activities, or that they had some relationship with the bank staff. The method of initiation could also affect the quality and quantity of information collected by the bank about the wire transfers, such as the purpose, source, and destination of the funds. Reference: ACAMS Advanced Financial Crimes Investigations Certification Study Guide, page 65.

Question 15

CLIENT INFORMATION FORM Client Name: ABC Tech Corp Client I.D. Number: 08125 Name: ABC
Tech Corp Registered Address: Mumbai, India Work Address: Mumbai. India Cell Phone: *■*•"— Alt
Phone: Email: *•*•*«•*•
Client Profile Information:
Sector: Financial
Engaged in business from (date): 02 Jan 2020
Sub-sector: Software-Cryptocurrency Exchange
Expected Annual Transaction Amount: 125.000 USD
Payment Nature: Transfer received from client’s fund
Received from: Clients
Received for: Sale of digital assets
The client identified themselves as "Cryptocurrency Exchange" Client has submitted the limited
liability partnership deed. However, the bank's auditing team is unable to identify the client's exact
business profile as the cryptocurrency exchange specified by the client as their major business awaits
clearance from the country's regulator. The client has submitted documents/communications
exchanged with the regulator and has cited the lack of governing laws in the country of their
operation as the reason for the delay.
Investigators determine the ultimate beneficial owner of ABC Tech Corp is a high-net-worth client.
The client owns a real estate agency left to her when her spouse died. The spouse provided seed
capital for ABC Tech Corp through a direct 1,000.000 Great British Pound (GBP) deposit.
What additional information would trigger filing a SAR/STR?

Accepted Answer

D

Explanation: The additional information that would trigger filing a SAR/STR is the fact that the funds for the seed capital were in the form of 50 cashier’s checks of 10,000 GBP each and 50 money orders of 10,000 GBP. This is because this indicates a possible attempt to avoid the reporting threshold of 10,000 GBP for cash transactions, which is a common money laundering technique known as structuring or smurfing12. The other options are not necessarily suspicious, as they do not involve cash transactions or indicate any illicit source of funds. The fact that the client’s spouse was a PEP does not automatically make the transaction suspicious unless there are other red flags or risk factors associated with the PEP34 Reference: 1: Money Laundering Techniques 2: Structuring 3: Politically exposed person 4: PEP Definition & Meaning - Merriam-Webster

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