Ultimate Guide to the CAMS - Latest Nov 06, 2023 Edition Available Now
2023 Updated Verified Pass CAMS Exam - Real Questions and Answers
To earn the CAMS certification, candidates must pass a rigorous exam that covers a range of topics related to AML compliance. CAMS exam is designed to test a candidate's knowledge of AML regulations, risk assessment, customer due diligence, and transaction monitoring, among other topics. Candidates must also have a minimum of 40 hours of AML-related training within the past three years to be eligible to take the exam.
NEW QUESTION # 281
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 finding and develops a remediation plan.
What is the role of the auditor during the correction phase?
- A. Validating the successful remediation of the issue once management indicates the issue is resolved
- B. Directing the remediation of the deficiency in a timely manner
- C. Providing training to the alert clearing department on the importance of effective alert clearing
- D. Developing procedures to provide sufficient risk-based documentation for clearing alerts
Answer: A
NEW QUESTION # 282
When a financial institution is requested to provide data and information to a law enforcement agency for matters related to financing of terrorism, assistance:
- A. can be refused on the grounds of tipping-off.
- B. cannot be refused on the grounds of tipping-off.
- C. can be refused on the grounds of bank secrecy.
- D. cannot be refused on the grounds of bank secrecy.
Answer: B
Explanation:
Explanation
When a law enforcement agency requests a financial institution to provide data and information related to financing of terrorism, the institution cannot refuse the request on the grounds of tipping-off. The institution should provide the requested information in accordance with the applicable laws and regulations, as well as the institution's internal policies and procedures. However, the institution may refuse the request on the grounds of bank secrecy, if it is not in compliance with the relevant laws and regulations.
NEW QUESTION # 283
What does the Egmont Group's support for its members include?
- A. Expanding and systematizing international cooperation in the reciprocal exchange of information
- B. Issuing strategic products for law enforcement agencies and FIUs on topics of international interest
- C. Issuing due diligence models for financial institutions
- D. Expanding the ability of FIUs to enforce laws and exchange information globally to combat money laundering and terrorist financing
Answer: A
Explanation:
Reference: https://egmontgroup.org/en/content/membership
NEW QUESTION # 284
In which two ways does a government Financial Intelligence Unit interact with public and private sectors?
(Choose two.)
- A. It mediates disputes between financial institutions and investigative authorities
- B. It governs the methods of investigation used by competent authorities
- C. It disseminates information and the results of its analysis to competent authorities
- D. It receives and analyzes disclosures filed by financial and non-bank institutions
Answer: C,D
NEW QUESTION # 285
Note: This question is part of a series of questions that present the same scenario. Each question in the series contains a unique solution that might meet the stated goals. Some question sets might have more than one correct solution, while others might not have a correct solution.
After you answer a question, you will NOT be able to return to it. As a result, these questions will not appear in the review screen.
You have an app named App1 that uses the Face API.
App1 contains several PersonGroup objects.
You discover that a PersonGroup object for an individual named Ben Smith cannot accept additional entries.
The PersonGroup object for Ben Smith contains 10,000 entries.
You need to ensure that additional entries can be added to the PersonGroup object for Ben Smith. The solution must ensure that Ben Smith can be identified by all the entries.
Solution: You create a second PersonGroup object for Ben Smith.
Does this meet the goal?
- A. No
- B. Yes
Answer: A
Explanation:
Instead, use a LargePersonGroup. LargePersonGroup and LargeFaceList are collectively referred to as large- scale operations. LargePersonGroup can contain up to 1 million persons, each with a maximum of 248 faces.
LargeFaceList can contain up to 1 million faces. The large-scale operations are similar to the conventional PersonGroup and FaceList but have some differences because of the new architecture.
References:
https://docs.microsoft.com/en-us/azure/cognitive-services/face/face-api-how-to-topics/how-to-use-large-scale
NEW QUESTION # 286
A bank is preparing for its anti-money laundering independent review, which is performed every two years under the direction of the compliance officer. The bank's corporate audit department will conduct the review. The compliance officer will review the final report before it is released to the Board of Directors.
What is the issue with this situation?
- A. The review must be performed by a group outside of the bank
- B. The final report must be presented directly to the board of directors
- C. Independent reviews must be performed annually
- D. There is a conflict of interest with the management of the review process
Answer: A
NEW QUESTION # 287
The Chief Compliance Officer (CCO) of a financial institution has been asked by a manufacturing customer reliant upon imported raw materials if there will be repercussions to his business following the weak assessment of the recent publicly issued Financial Action Task Force (FATF) Mutual Evaluation Report (MER). How should the CCO respond?
- A. Negative consequences will not occur because the manufacturing customer has been trading with reputable countries and suppliers for many years without incident.
- B. Delayed processing of cross-border transfer of funds between countries may occur due to increased scrutiny to determine the legitimacy of each transfer.
- C. Citing inaccurate content of the MER. the president of the country has called upon the FATF to publicly withdraw the MER and commission an independent review of findings.
- D. Mandate termination of all cross-border trading until evidence can be provided to show an improved position of compliance for the weaknesses stated in the MER.
Answer: B
Explanation:
Explanation
According to the Certified Anti-Money Laundering Specialist (the 6th edition) Study guide, the CCO should advise the manufacturing customer that increased scrutiny of cross-border transfers may lead to delays and caution them to ensure that all necessary documentation is provided in order to facilitate a timely transfer.
Additionally, the CCO should recommend that the customer contact the FATF to discuss the possibility of an independent review of the findings, as well as other options to mitigate the potential negative consequences.
NEW QUESTION # 288
The most important concerns imposed on foreign financial institutions maintaining correspondent accounts with
U.S. banks under the USA PATRIOT Act are:
- A. Forfeiture of funds in a U.S. interbank account.
- B. Cancellation of correspondent banking relationships.
- C. Prohibition of correspondent accounts for shell banks.
- D. U.S. residents maintaining private banking accounts.
Answer: A,B,D
NEW QUESTION # 289
Which of the following poses the greatest money laundering risk for a financial institution offering on-line services to customers?
- A. Institutions offering on-line services have no possibility to properly verify the identity of their customers.
- B. There is greater difficulty in matching the customer with the provided identification documentation. B.
There is no human scrutinizing the customer's transactions, thus increasing the potential for large transactions. - C. Customers can directly access their accounts without being detected.
Answer: C
Explanation:
Explanation
Correct but still under verification
NEW QUESTION # 290
An auction house dealing in fine art and antiques sells a well-known painting at a price of $12 million to an agent bidding for a group of local investors. The same painting sold ten years prior at auction for $5 million. The auction house receives payment for the painting via wire transfer from an account maintained in an offshore jurisdiction by the investor group. No beneficial ownership information is available for the account.
What are the two money laundering red flags? (Choose two.)
- A. Lack of beneficial ownership details for the originating account.
- B. The payment is received via wire transfer.
- C. The painting has more than doubled its value in ten years.
- D. Payment is received from an account in an offshore jurisdiction.
- E. An agent bids on the painting for a group of investors.
Answer: A,E
NEW QUESTION # 291
The compliance department receives an internal referral that appears to indicate terrorist financing. What is the first step that should be taken in the investigation process?
- A. Immediately file a suspicious activity report.
- B. Notify the Board of Directors.
- C. Gather background and transaction information.
- D. Exit the relationship.
Answer: C
Explanation:
Explanation
According to the 6th edition Certified Anti-Money Laundering Specialist Study Guide, when the compliance department receives an internal referral that appears to indicate terrorist financing, the first step in the investigation process should be to gather background and transaction information. This includes obtaining customer identification and verifying customer data, obtaining additional information about the customer and the transaction, and reviewing the transaction activity. This information will help to determine if the referral is accurate and if further action is needed.
NEW QUESTION # 292
In which two ways does a government Financial Intelligence Unit interact with public and private sectors? (Choose two.)
- A. It mediates disputes between financial institutions and investigative authorities
- B. It governs the methods of investigation used by competent authorities
- C. It disseminates information and the results of its analysis to competent authorities
- D. It receives and analyzes disclosures filed by financial and non-bank institutions
Answer: C,D
NEW QUESTION # 293
FATF recommends the incorporation of some measures in customer due diligence (CDD) programs including:
- A. conducting the risk assessment of products and services.
- B. identifying the products and services and their suitability to customers.
- C. identifying the number of beneficial owners without the verification of their true identity.
- D. conducting ongoing due diligence on the business relationship and monitoring of transactions.
Answer: D
NEW QUESTION # 294
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. Develop a system to monitor all the activity
- D. Conduct a trade-price manipulation analysis
Answer: A
NEW QUESTION # 295
A money remittance business will most likely attract money launderers because it:
- A. does not have to comply with transaction reporting.
- B. engages in international transactions.
- C. deals primarily in cash transactions.
- D. conducts transactions for walk-in customers.
Answer: B,C,D
NEW QUESTION # 296
What are three potential issues for foreign financial institutions maintaining correspondent accounts with U.S.
banks under the Patriot Act?
- A. Forfeiture of funds in a U.S. interbank account
- B. Cancellation of correspondent banking relationships
- C. U.S. residents maintaining private banking accounts
- D. Prohibition of correspondent accounts for shell banks
Answer: A,B,D
NEW QUESTION # 297
Which reputations risk consequence could a financial entity face for violating AML laws?
- A. Seizure of assets
- B. Loss of high-profile customers
- C. Monetary penalties
- D. Increased audit costs to monitor behavior
Answer: C
Explanation:
Explanation
According to the Certified Anti-Money Laundering Specialist (CAMS) Manual [1], 6th edition, financial entities that violate Anti-Money Laundering (AML) laws can face several reputational risks such as loss of high-profile customers, seizure of assets, increased audit costs to monitor behavior, and monetary penalties.
For example, the US Treasury's Financial Crimes Enforcement Network (FinCEN) imposes civil money penalties on "persons who willfully violate, attempt to violate, conspire to violate, or cause any violation of any provision of the Bank Secrecy Act or its implementing regulations." (CAMS Manual, 6th edition, page
26).
NEW QUESTION # 298
A compliance officer is looking to modify procedures covering correspondent banking relationships. Which three would be recommended under the Wolfsburg Principles on Correspondent Banking? Choose 3 answers
- A. Prohibition on offering products or services to shell banks
- B. Assessing the regulatory status and history of the client
- C. Periodic risk-based reviews of cents
- D. Risk-based rating of central banks and regional development banks
Answer: A,B,C
NEW QUESTION # 299
What should countries do to help prevent non-profit organizations from being abused for the financing of terrorism according to the Financial Action Task Force 40 Recommendations?
- A. Allow for freezing assets of non-profit organizations
- B. Ensure non-profit organizations cannot be used to conceal or obscure the diversion of funds intended for legitimate purposes to terrorists' organizations
- C. Create laws that forbid non-profit organizations from completing cross-border transactions without first running them through known terrorist data bases
- D. Require all non-profit organizations to register with the country's financial intelligence unit
Answer: B
Explanation:
Reference:
http://www.fatf-gafi.org/media/fatf/documents/reports/BPP-combating-abuse-non-profitorganisations.pdf (p.9)
NEW QUESTION # 300
Which three are examples of best practices terms of ensuring an adequate AML program?
- A. Review the accuracy of account opening applications
- B. Perform a risk analysis on a regular basis and compare it to the coverage of the AML program
- C. Review applicable domestic and international AML guidance
- D. Engage an independent party to perform a periodic review of the program
Answer: A,B,C
NEW QUESTION # 301
What is a criterion for FATF membership?
- A. The country should be democracy
- B. The country should have already implemented the standards of the European Union Directives
- C. The country should be a member of a FATF-style regional body
- D. The country should have already implemented all of the FATF Recommendations
Answer: C
NEW QUESTION # 302
Using the customer profile and expected activity information, a financial institution should be able to identify transactions that are difficult to:
- A. make viable profitability.
- B. make economic sense
- C. be strategically viable.
- D. cross verify.
Answer: B
Explanation:
Explanation
Using the customer profile and expected activity information, a financial institution should be able to identify transactions that are difficult to make economic sense. Transactions that don't make economic sense may be suspicious, and should be investigated further to determine if they may be related to money laundering or other illicit activities. For example, if a customer is profiting from a series of transactions that don't make economic sense, such as buying and selling the same stock multiple times in a short period of time, then this could be a sign of money laundering or other illicit activities.
NEW QUESTION # 303
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 exceeds the criteria of an acceptable risk model created by the institution and does not perform acceptable remedial actions.
- 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 conducts international financial transactions exceeding U.S. $500 million.
Answer: B
Explanation:
Reference:
http://www.fatf-gafi.org/media/fatf/documents/reports/Risk-Based-Approach-Banking-Sector.pdf
NEW QUESTION # 304
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