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CAMS-FCI Questions Prepare with Learning Information
NEW QUESTION # 21
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 America. 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 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 a real estate business which again poses a higher risk.
The monitoring system of the correspondent institution flags the transaction as suspicious activity. The correspondent bank needs to send a request for information to the respondent bank. Which elements should be included in the request? (Select Three.)
- A. Full transaction history of the correspondent bank's customer
- B. The contract pertaining to the purchase of property in another country
- C. The account profile of the customer and their KYC data
- D. The respondent bank's customer's senior management bonus plan
- E. Details of DEF Oil Resource Ltd parent company and the name(s) of the beneficial owner(s)
- F. The last 6 months of transactional history
Answer: B,C,E
Explanation:
Explanation
The request for information should include the following elements:
Details of DEF Oil Resource Ltd parent company and the name(s) of the beneficial owner(s) (Option A): This is necessary to verify the identity and ownership structure of the remitter and to assess the risk level of the customer and the transaction.
The account profile of the customer and their KYC data (Option C): This is necessary to understand the nature and purpose of the customer's business relationship with the respondent bank and to compare it with the observed transactional activity.
The contract pertaining to the purchase of property in another country (Option E): This is necessary to verify the legitimacy and source of funds for the transaction and to identify the ultimate beneficiary of funds.
The other options are not relevant or necessary for the request for information. The full transaction history of the correspondent bank's customer (Option B) is too broad and may not be related to suspicious activity. The respondent bank's customer's senior management bonus plan (Option D) is not relevant to the transaction and may not be available to the respondent bank. The last 6 months of transactional history (Option F) is also too broad and may not be related to the suspicious activity.
References:
Advanced CAMS-FCI Certification Handbook, page 19
NEW QUESTION # 22
A client at a financial institution deposits large amounts of money into an account, and almost immediately, the funds are then distributed to numerous individuals' accounts. The transaction activity described in the scenario is a pattern of:
- A. account usage.
- B. safe deposit custody.
- C. geographic usage.
- D. deposit trading.
Answer: D
Explanation:
Explanation
Deposit trading is a pattern of suspicious activity where a client deposits large amounts of money into an account, and then transfers the funds to other accounts, often in different jurisdictions or countries. This could be an attempt to disguise the source or destination of the funds, or to avoid reporting requirements. Deposit trading is also known as layering, which is the second stage of money laundering.
References: ACAMS Advanced Financial Crimes Investigations Certification Study Guide, page 43; ACAMS Glossary, page 34.
NEW QUESTION # 23
Which actions should financial institutions perform to ensure proper data governance? (Select Three.)
- A. Periodically validate integrity and accuracy of information used for IT systems such as customer information, customer identification records, and transaction records.
- B. Review significant discrepancies between the values of the product reported on the invoice and the fair market value.
- C. Establish an appropriate data management method for collecting and storing information.
- D. Evaluate the nature of foreign remittance under a risk-based structure of AML/CFT and take necessary measures in accordance with the risk-based approach.
- E. For customers who are determined to be at high risk, review their risk rating and apply risk mitigation measures as appropriate.
- F. Ensure the accuracy of customer identification records and transaction records and appropriately manage data as a prerequisite for the effective use of IT systems.
Answer: A,C,F
Explanation:
Explanation
Financial institutions should perform the following actions to ensure proper data governance:
Establish an appropriate data management method for collecting and storing information. This is important to ensure that the data is consistent, reliable, and accessible for various purposes, such as risk assessment, compliance reporting, and customer service. Data management methods may include defining data standards, policies, and procedures; implementing data quality controls and validation checks; and using appropriate data storage systems and formats.
Ensure the accuracy of customer identification records and transaction records and appropriately manage data as a prerequisite for the effective use of IT systems. This is important to comply with the anti-money laundering and counter-terrorist financing (AML/CFT) requirements, such as customer due diligence, transaction monitoring, and suspicious activity reporting. Accurate and complete customer and transaction data also enables financial institutions to use IT systems more effectively for data analysis, risk management, and decision making.
Periodically validate integrity and accuracy of information used for IT systems such as customer information, customer identification records, and transaction records. This is important to ensure that the data remains up-to-date, relevant, and reliable over time. Data validation may include verifying the source and quality of the data; identifying and correcting any errors or inconsistencies; and updating or deleting any obsolete or redundant data.
References:
Data Governance for Financial Institutions - Capgemini
Small and Medium-Sized Deposit-Taking Institutions (SMSBs) Capital and Liquidity Requirements - OSFI
NEW QUESTION # 24
An unusual spike in activity has occurred for a customer who is a supplier of aviation parts to a military force.
The customer's current line of business is consistent with the banks records, and no adverse media hits have occurred. Which is the best reason for an investigator to continue an investigation?
- A. The customer is a supplier of aviation parts.
- B. The end-user is a military force.
- C. The current line of business is consistent with the bank's records.
- D. There are no adverse media hits.
Answer: B
Explanation:
Explanation
The best reason for an investigator to continue an investigation is that the end-user is a military force. This is because supplying aviation parts to a military force may involve sanctions risk, export control risk, or human rights risk, depending on the nature and destination of the military force. The investigator should conduct further due diligence to determine if the customer is complying with the relevant laws and regulations, and if the bank is exposed to any reputational or legal risk by providing services to the customer.
References:
Former Airline Employee and Aircraft Part Sellers Charged in Kickback ...
Former Airline Employee and Aircraft Part Sellers Charged in Kickback ...
Former airline employee and aircraft part sellers charged in kickback ...
NEW QUESTION # 25
Which reputations risk consequence could a financial entity face for violating AML laws?
- A. Increased audit costs to monitor behavior
- B. Seizure of assets
- C. Monetary penalties
- D. Loss of high-profile customers
Answer: C
NEW QUESTION # 26
An analyst reviews an alert for high volume Automated Clearing House (ACH) activity in an account. The analyst's initial research finds the account is for a commercial daycare account that receives high volumes of large government-funded ACH transactions to support the programs. The account activity consists of checks (cheques) made payable to individual names in varying dollar amounts. One check indicates rent to another business.
An Internet search finds that the daycare company owner has previous government-issued violations for safety and classroom size needs, such as not having enough chairs and tables per enrollee. These violations were issued to a different daycare name.
Simultaneous to this investigation, another analyst sends an email about negative news articles referencing local child/adult daycare companies misusing governmental grants. This prompts the financial institution (Fl) to search all businesses for names containing daycare' or care*. Text searches return a number of facilities as customers at the Fl and detects that three of these businesses have a similar transaction flow of high volume government ACH funding with little to no daycare expenses.
The analyst determines that site visits should be conducted for the three daycare businesses. Which observations at the on-site visits would justify writing a SAR/STR? (Select Three.)
- A. A full parking lot of cars with no staff at the site
- B. Lights turned off at the site during operational hours
- C. Visible attendance with children being dropped off by parents
- D. Visible signage indicating the purpose of the building
- E. Signs of severe wear and poor maintenance at the site
- F. A site located in a commercial building
Answer: A,B,E
Explanation:
Explanation
The observations at the on-site visits that would justify writing a SAR/STR are signs of severe wear and poor maintenance at the site (A), lights turned off at the site during operational hours , and a full parking lot of cars with no staff at the site (F). These observations suggest that the daycare businesses are not operating legitimately or providing adequate services to their customers, and that they may be misusing governmental grants or laundering money through their accounts. These observations are consistent with some of the red flags for fraud identified by ACAMS2, such as:
Inadequate facilities or equipment for the type of business
Lack of visible activity or customers at the business location
Discrepancy between reported income and expenses
Unusual volume or frequency of transactions
The other observations are not as relevant or indicative of fraud as options A, C, and F. A site located in a commercial building (B) could be a normal or legitimate choice for a daycare business, depending on its size, location, and availability. Visible attendance with children being dropped off by parents (D) could show that the daycare business is providing genuine services to its customers, although it does not rule out possible fraud or money laundering. Visible signage indicating the purpose of building (E) could also show that the daycare business is transparent and legitimate, although it does not guarantee its quality or compliance.
References: 1: ACAMS Advanced Financial Crimes Investigations Certification Study Guide, available at ACAMS 2: ACAMS Fraud Prevention eLearning Course Module 3: Fraud Detection Techniques
NEW QUESTION # 27
Which main vulnerability has led to an increase in the ransomware attacks perpetuated on small businesses?
- A. Ability to pay larger ransoms
- B. Weaker cybersecurity controls
- C. Tendency not to contact law enforcement
- D. Inability to recover the encrypted information
Answer: B
Explanation:
Explanation
Weaker cybersecurity controls are a main vulnerability that has led to an increase in ransomware attacks on small businesses, as they make them easier targets for cybercriminals who can exploit their systems and demand payment for restoring access to their data. The other options are not relevant to the vulnerability, as they relate to the consequences or responses of the victims.
NEW QUESTION # 28
Which might suggest misuse of crowdfunding resources by a terrorist?
- A. Multiple small deposits followed by a wire transfer to a large well-known international charity
- B. Multiple small deposits followed by the purchase of airplane tickets >
- C. A large deposit followed by multiple charges at a sporting goods store
- D. A small charge at a gas station followed by a large charge at an electronics store
Answer: B
Explanation:
Explanation
The purchase of airplane tickets after receiving multiple small deposits from a crowdfunding platform might suggest that the funds are being used to facilitate travel for terrorist purposes. The other options are not necessarily indicative of terrorist financing, as they could be explained by legitimate reasons or other types of financial crimes.
NEW QUESTION # 29
Sanctions screening requirements include that a financial institution should:
- A. immediately freeze the bank account of an individual that appears on a sanctions list.
- B. immediately close the bank account of an entity who appears on a sanctions list.
- C. compare customer and transaction records against periodically updated sanctions lists provided by governmental bodies.
- D. report an individual whose name appears on a sanctions list to the police.
Answer: C
Explanation:
Explanation
Compare customer and transaction records against periodically updated sanctions lists provided by governmental bodies. This is stated in the Certified Anti-Money Laundering Specialist (the 6th edition) manual on page 595, which states: "Sanctions screening requirements include that a financial institution should compare customer and transaction records against periodically updated sanctions lists provided by governmental bodies."
NEW QUESTION # 30
A compliance analyst is reviewing the account activity of a customer that they suspect may be indicative of money laundering activity. Which is difficult to determine solely from the customer's account activity and KYC file?
- A. If the activity is materially different from related businesses
- B. If the account has multiple transfers to the same, related businesses
- C. If the account is mostly dormant or has little activity
- D. If there is negative media associated with counterparties
Answer: D
Explanation:
Explanation
According to the Certified Anti-Money Laundering Specialist (CAMS) study guide, 6th edition, page 105, the correct answer is C. It can be difficult to determine if there is negative media associated with counterparties solely from the customer's account activity and KYC file.
The study guide explains that negative media can include news articles, government sanctions lists, and other sources of public information that may indicate that a counterparty is involved in illicit activities. However, this information may not be readily available in a customer's account activity or KYC file, and may require additional research or investigation.
NEW QUESTION # 31
A client with many personal and business deposits with the financial institution (Fl) seeks a business loan. The client wants to guarantee the loan with a trust for which they are the beneficiary.
An investigator examines the trust. The trust has many layers, including shell companies in known tax havens.
The client's ultimate beneficial ownership claim cannot be validated, and the loan is denied.
Two months later, the Fl receives a law enforcement (LE) request on one of the client's business accounts.
While reviewing the business account, the Fl receives another LE request on the same account from another agency. The requested information is shared.
Three months later, a branch manager receives a request to open a business deposit account related to a complex trust. The manager forwarded the request because of the complexity. The trust was the same as the previously examined trust, but the request came from a different client. The second client also has many accounts with the Fl. Further inspection finds links between the second client and the Paradise Papers. The Papers state the client led illegal activities and committed tax evasion.
What steps should the investigator perform in reference to the first client's existing accounts? (Select Three.)
- A. Perform secondary scans of the client's other owners/authorized signers
- B. Review Fl approved policies regarding the existing accounts to ensure regulatory requirements were followed.
- C. File SARs/STRs for all accounts at the beginning of the discovery phase and amend later as necessary.
- D. Review all client-signed documents relating to all accounts.
- E. Inform Fl management of all processes used to investigate the client due to LE inquiry.
- F. Prepare a relationship flow chart of all existing accounts to better understand the client's activities.
Answer: A,D,F
Explanation:
Explanation
The investigator should review all client-signed documents relating to all accounts (A) to check for any discrepancies or red flags. The investigator should also perform secondary scans of the client's other owners/authorized signers (D) to identify any possible connections or associations with the second client or the Paradise Papers. Additionally, the investigator should prepare a relationship flow chart of all existing accounts (F) to better understand the client's activities and patterns. These steps are consistent with the ACAMS Advanced Financial Crimes Investigations Certification Study Guide1, which states that investigators should
"review all relevant documentation, including account opening documents, transaction records, and customer correspondence" (p. 23), "conduct enhanced due diligence on all parties involved in the investigation" (p. 24), and "use data visualization tools to map out complex relationships and transactions" (p. 25).
References: 1: ACAMS Advanced Financial Crimes Investigations Certification Study Guide, available at ACAMS
NEW QUESTION # 32
Which action is part of the enhanced due diligence process?
- A. Using standard monitoring procedures to monitor transactions and account activity
- B. Applying higher ownership percentage requirement for beneficial ownership collection
- C. Verifying the source of wealth for entities and natural person clients
- D. Collecting beneficial ownership details regarding the client's account
Answer: D
Explanation:
Explanation
One of the actions that is part of the enhanced due diligence process is collecting beneficial ownership details regarding the client's account. This is important to identify the natural persons who ultimately own or control the client, and to assess the potential risks associated with them. According to the Financial Action Task Force (FATF), beneficial ownership information should include1:
The name, nationality, and country of residence of each beneficial owner.
The date of birth or incorporation of each beneficial owner.
The nature and extent of the beneficial interest held by each beneficial owner.
The means by which the beneficial ownership or control is exercised.
References:
FATF Guidance on Transparency and Beneficial Ownership
NEW QUESTION # 33
Law enforcement (LE) suspects human trafficking to occur during a major spotting event. LE officers asked several financial institutions (FIs) to monitor financial transactions occurring before, during, and after the event.
An investigator identified a pattern linked to a business. The business* account received multiple even dollar deposits between midnight and 4:00 AM. They occurred each day for several days prior to the date of the sporting event. Also, large cash deposits, typically between 2,000 USD and 3.000 USD. made by a person to the business' account occurred in many branches in the days after the sports event There was little information about the company. The company did not have any history of employee payroll expenses or paying taxes. Expenses from the business account included air travel and hotel expenses. Searches about the person making cash deposits showed little. An online social media platform webpage with the individual's name showed ads for dates" and "companionship." If the investigator uncovers evidence that foreign nationals are involved in this activity, they should also note the possible presence of:
- A. human smuggling.
- B. tax fraud.
- C. trade-based laundering.
- D. black market peso exchange.
Answer: A
Explanation:
Explanation
If the investigator uncovers evidence that foreign nationals are involved in this activity, they should also note the possible presence of human smuggling (D). This is because human smuggling is the illegal movement of people across borders, often facilitated by criminal networks that exploit vulnerable migrants. According to the FATF and Egmont Group report on Financial Flows from Human Trafficking2, "human smuggling can be closely linked to human trafficking, as smuggled migrants may become victims of trafficking along their journey or at their destination" (p. 9). The report also states that some indicators of human smuggling are similar to those of human trafficking, such as:
Frequent cash deposits or withdrawals in different locations
Use of false or fraudulent identification documents
Expenses related to travel and accommodation
Involvement in online platforms that advertise sexual services
The other options are not as relevant or specific as option D.
Tax fraud (A) is the evasion of taxes by individuals or businesses, which may or may not be related to human trafficking or smuggling. Black market peso exchange (B) is a money laundering scheme that involves exchanging illicit proceeds in one currency for another currency at a discounted rate, which is more commonly associated with drug trafficking or trade-based laundering. Trade-based laundering is the manipulation of trade transactions to disguise the origin and ownership of illicit funds, which is also more likely to be linked to drug trafficking or other types of fraud.
References: 1: ACAMS Advanced Financial Crimes Investigations Certification Study Guide, available at ACAMS 2: FATF and Egmont Group, Financial Flows from Human Trafficking, July 2018, available at FATF
NEW QUESTION # 34
Which pattern of activity most strongly indicates an individual is a foreign terrorist fighter?
- A. A series of small cash deposits made in rapid succession totaling just over 10,000 USD followed by a purchase at a jewelry store
- B. A large purchase at a gas station immediately followed by several smaller purchases at an electronics store
- C. A series of small deposits followed by a large international wire to a well-known international charity
- D. A large cash advance on a credit card and purchases at travel and sporting goods websites
Answer: D
Explanation:
Explanation
The pattern of activity that most strongly indicates an individual is a foreign terrorist fighter is a large cash advance on a credit card and purchases at travel and sporting goods websites. This is because this pattern may suggest that the individual is preparing to travel to a conflict zone and purchase equipment or supplies for terrorist activities. According to the United Nations Office on Drugs and Crime, some of the indicators of foreign terrorist fighters include1:
Sudden or increased financial activity, such as cash withdrawals, transfers, or deposits, especially in large amounts or involving foreign currency or locations.
Purchases of travel-related items, such as airline tickets, passports, visas, luggage, or clothing, especially to or from high-risk destinations or transit hubs.
Purchases of items that could be used for terrorist purposes, such as weapons, explosives, chemicals, communication devices, or survival gear.
Changes in behavior, such as expressing radical views, cutting ties with family or friends, joining extremist groups, or displaying signs of emotional distress.
References:
Foreign Terrorist Fighters - United Nations Office on Drugs and Crime
NEW QUESTION # 35
While each is potentially important, which allows an investigations analyst to better write a SAR/STR narrative that is useful to law enforcement? (Select Two.)
- A. Including a detailed description of the known or suspected criminal violation or suspicious activity
- B. Including an explanation of the internal process that brought the transaction to the attention of the analyst
- C. Including information about the general activity trends in the area where the suspicious transactions were conducted
- D. Including contact information for individuals at other institutions with whom correspondence has occurred
- E. Ensuring all information in the SAR/STR is complete and accurate based on what the institution knows
Answer: A,E
Explanation:
Explanation
A SAR/STR narrative that is useful to law enforcement should include a detailed description of the known or suspected criminal violation or suspicious activity, as well as ensure that all information in the SAR/STR is complete and accurate based on what the institution knows. These elements help law enforcement to understand the nature and scope of the suspicious activity, and to follow up with further investigation if needed. The other options are not essential for a useful SAR/STR narrative, as they either provide irrelevant or redundant information, or could compromise the confidentiality of the report.
NEW QUESTION # 36
Which are primary purposes of Financial Action Task Force {FATF)-Style Regional Bodies? (Select Two.)
- A. Promoting effective implementation of FATF recommendations
- B. Providing due diligence for foreign correspondent banks
- C. Acting as a prudential regulatory body for financial institutions
- D. Imposing special measures for non-cooperative jurisdictions
- E. Providing expertise and input in FATF policy-making
Answer: A,E
Explanation:
Explanation
The primary purposes of Financial Action Task Force (FATF)-Style Regional Bodies are to promote effective implementation of FATF recommendations and to provide expertise and input in FATF policy-making.
(CAMS Manual, 6th Edition, Page 180)
NEW QUESTION # 37
The investigative department of a financial institution (Fl) receives an internal escalation notice from the remittance department for a SWIFT message requesting a refund due to potential fraud. The notice indicates that a total of three international incoming remittances were transferred to a corporate customer from Country A, in the amount of approximately 5 million EUR for each. The first two incoming remittances had been exchanged into currency B and transferred out to Country B a few days ago. The third incoming remittance has been held by the remittance department.
As noted from the KYC profile, the corporate customer is working in the wood industry. with the last account review completed 3 months ago. Since the account's opening. there has been no history of a large amount of funds flowing through the account. The investigator conducts an Internet search and finds that the remitter is a food beverage company.
The same morning, the investigator receives a call from a financial intelligence unit (FIU) inquiring about the same incident. The FIU states that it will issue a warrant to freeze the account on the same day.
After further review, the decision is made that transactions appear suspicious. Which are the next steps the investigator should take? (Select Two.)
- A. Gather all the information that would be useful for law enforcement (LE) and recommend filing a SAR/STR
- B. Close the customer's accounts since the FIU is issuing a warrant to freeze the funds.
- C. Close the investigation as the FIU is already on this matter, and they will inform LE if needed.
- D. Contact local LE and advise them of the investigation details to help speed up the investigation and prosecution.
- E. Provide additional information to the LE upon receiving a formal request.
Answer: A,E
Explanation:
Explanation
The correct answer is C and E.
The investigator should provide additional information to the LE upon receiving a formal request, and gather all the information that would be useful for LE and recommend filing a SAR/STR. These steps are consistent with the best practices of conducting financial crime investigations and reporting suspicious activity. The investigator should not close the customer's accounts or the investigation, as this may interfere with the ongoing LE inquiry and violate the FI's policies and procedures. The investigator should also not contact local LE directly, as this may compromise the confidentiality of the investigation and the FIU's authority. References:
Advanced CAMS-FCI Study Guide, Chapter 4: Reporting Suspicious Activity, pages 40-411 Advanced CAMS-FCI Study Guide, Chapter 5: Governance of an AFC Investigations Unit, pages
48-491
Advanced CAMS-FCI Certification | ACAMS
NEW QUESTION # 38
How does the Asian/Pacific Financial Action Task Force <FATF>-Style Regional Body help its members implement recommendations from the FATF? (Select Two.)
- A. Facilitates the adoption and implementation of internationally accepted AMI measures by member jurisdictions
- B. Encourages cooperative AML efforts in the region
- C. Promotes laws that allow judicial challenges to seizure orders by an administrative body
- D. Requires members to maintain lists of regional money laundering and terrorists financing issues relevant to their region
- E. Endorses regulations that define money laundering based on the model laws issued by the respective member states
Answer: A,B
Explanation:
Explanation
The Asian/Pacific Financial Action Task Force-Style Regional Body (APG) helps its members implement recommendations from the FATF by facilitating the adoption and implementation of internationally accepted AML measures by member jurisdictions (CAMS Manual, 6th Edition, Page 22). The APG also encourages cooperative AML efforts in the region, which can include information-sharing and mutual evaluations to assess member compliance with FATF recommendations (CAMS Manual, 6th Edition, Page 25). Therefore, options C and D are the correct answers.
NEW QUESTION # 39
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.)
- A. Advise the LEA that the government needs to be contacted for extradition.
- B. Comply immediately with the foreign jurisdiction and turn over all client information.
- C. Inform local LEA and regulator of the request for awareness.
- D. Review the client's activity, determine if suspicious activity exists, and report accordingly.
- E. Close the clients accounts immediately to avoid any undue risk.
Answer: C,D
Explanation:
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.
NEW QUESTION # 40
A government entity established a trust to provide social welfare programs. The entity wants cash payments made to persons without supporting documentation. These persons would oversee the allocation of funds to beneficiaries without complying with internal disbursement of government funds controls. Which is the main premise for filing a SAR/STR?
- A. Social welfare programs are difficult to document because the beneficiaries are from the informal sector.
- B. The entity is not implementing adequate internal controls according to what is expected, and mishandling of funds could be occurring.
- C. Trust service providers are not obliged by law to follow government internal controls.
- D. Cash disbursements are not allowed for social welfare programs.
Answer: B
Explanation:
Explanation
The main premise for filing a SAR/STR is that the entity is not implementing adequate internal controls according to what is expected, and mishandling of funds could be occurring. This raises suspicion that the entity may be involved in corruption, fraud, or diversion of funds for illicit purposes. Trust service providers are obliged by law to follow government internal controls, as they are subject to AML/CFT regulations and supervision. Cash disbursements are allowed for social welfare programs, but they should be properly documented and verified. Social welfare programs are not necessarily difficult to document, as there are ways to identify and monitor the beneficiaries, such as biometric data or unique identifiers.
NEW QUESTION # 41
How does the Financial Action Task Force (FATF) measure the effectiveness of a country's efforts to combat money laundering and terrorist financing?
- A. Series of internal audits followed by reporting to FATF
- B. FATF Evaluation Committee
- C. Basel Committee
- D. Mutual evaluation
Answer: D
Explanation:
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].
NEW QUESTION # 42
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 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.
What is the total suspicious transaction amount that the investigator should report?
- A. 59,000,000 USD
- B. 600,000,000 USD
- C. 541.000,000 USD
- D. 659,000,000 USD
Answer: D
Explanation:
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.
References: Advanced CAMS-FCI Certification | ACAMS
NEW QUESTION # 43
Which are some of the negative impacts from illegal wildlife trade and environmental crimes? (Select Two.)
- A. Threats to biodiversity
- B. Threats to a country's political stability
- C. Loss of potential tax proceeds
- D. Barriers to banking by low income population
- E. Public health consequences
Answer: A,C
Explanation:
Explanation
Some of the negative impacts of illegal wildlife trade and environmental crimes are loss of potential tax proceeds and threats to biodiversity. Loss of potential tax proceeds occurs when illegal wildlife trade and environmental crimes evade taxation and customs duties, depriving governments of revenues that could be used for public services and development. Threats to biodiversity occur when illegal wildlife trade and environmental crimes endanger species, habitats, and ecosystems, reducing their resilience and ability to provide essential services for human well-being. Public health consequences and threats to a country's political stability are not directly related to illegal wildlife trade and environmental crimes, but rather to other types of financial crimes such as money laundering, terrorism financing, or corruption.
References: [Advanced CAMS-FCI Study Guide], page 68-69; [FATF Report on Money Laundering from Environmental Crime], page 9-10.
NEW QUESTION # 44
An analyst reviews an alert for high volume Automated Clearing House (ACH) activity in an account. The analyst's initial research finds the account is for a commercial daycare account that receives high volumes of large government-funded ACH transactions to support the programs. The account activity consists of checks (cheques) made payable to individual names in varying dollar amounts. One check indicates rent to another business.
An Internet search finds that the daycare company owner has previous government-issued violations for safety and classroom size needs, such as not having enough chairs and tables per enrollee. These violations were issued to a different daycare name.
Simultaneous to this investigation, another analyst sends an email about negative news articles referencing local child/adult daycare companies misusing governmental grants. This prompts the financial institution (Fl) to search all businesses for names containing daycare' or "care*. Text searches return a number of facilities as customers at the Fl and detects that three of these businesses have a similar transaction flow of high volume government ACH funding with little to no daycare expenses.
During the investigation, new suspicious patterns and trends related to check cashing are observed. The Fl decides to conduct a training to ensure that 1) the AML program is robust and 2) the training program is relevant and appropriate. Which parties should be trained on emerging trends and red flags? (Select Two.)
- A. Loan department
- B. The board of directors
- C. Branch personnel
- D. Financial crimes investigation unit
- E. Senior management
Answer: C,D
Explanation:
Explanation
The parties that should be trained on emerging trends and red flags are the financial crimes investigation unit (A) and the branch personnel . These parties are directly involved in detecting, investigating, and reporting suspicious activity related to check cashing or other types of fraud or money laundering. According to the ACAMS Advanced Financial Crimes Investigations Certification Study Guide1, "the FI should provide regular and relevant training to its staff on the AML program, policies, procedures, and systems, as well as on the latest typologies, indicators, and best practices for financial crimes investigations" (p. 36). The FI should also "ensure that the training is tailored to the specific roles and responsibilities of the staff, and that it is updated and evaluated periodically" (p. 36).
The other parties are not as relevant or appropriate as options A and C. The loan department (B) is not directly related to check cashing or other types of fraud or money laundering, although it may have some exposure to credit or identity fraud. The senior management (D) is responsible for overseeing and supporting the AML program, but not for conducting or supervising financial crimes investigations. The board of directors (E) is responsible for approving and reviewing the AML program, but not for implementing or monitoring it.
References: 1: ACAMS Advanced Financial Crimes Investigations Certification Study Guide, available at ACAMS
NEW QUESTION # 45
A KYC specialist from the first line of defense at a bank initiates an internal escalation based on a letter of credit received by the bank.
MEMO
To: Jane Doe. Compliance Manager, Bank B From: Jack Brown, KYC Specialist, Bank B RE: Concerning letter of credit A letter of credit (LC) was received from a correspondent bank.
Bank A. in Country A. in Asia with strict capital controls, providing guarantee of payment to Bank B's client for the export of 10 luxury cars located in Country B. located in Europe. Bank A's customer is a general in the army where Bank A is headquartered.
The information contained in the LC is as follows:
* Advising amount per unit 30.000.00 EU *10 units of BMW
* Model IX3
* Year of registration: 2020
Upon checks on Bank B's client, the exporter mentioned that the transactions were particularly important, and a fast process would be much appreciated in order to avoid reputational damage to the firm and the banks involved in the trade finance process. The exporter has a longstanding relationship with Bank B and was clearly a good income generator. The exporter indicated that, as a general, the importer was trustworthy.
The relationship manager <RM) was contacted to conduct a full review of the exporter and to conduct a site visit.
Feedback from the RM:
The RM contacted the exporter for a client courtesy visit, but it was rearranged four times as the exporter kept cancelling the appointments. When the exporter was finally pinned down for an interview, employees were reluctant to provide clear answers about the basis of the transaction. The employees were evasive when asked about the wider business and trade activity in the country.
Findings from the investigation from various internal and external sources of information:
* There were no negative news or sanctions hits on the exporter company, directors, and shareholders.
* The registered address of the exporting business was a residential address.
* The price of the cats was checked and confirmed to be significantly below the market price of approximately 70,000 EU, based on manufacturer's new price guide.
* The key controllers behind the exporting company, that is the directors and During the investigation, the investigator determines that a nephew of the general (Bank A's customer) is a customer at Bank B.
Which step should the investigator take next?
- A. Seek senior management approval to continue the relationship with the nephew.
- B. Determine whether there is a business relationship between the nephew and the general.
- C. Flag the nephew as a PEP by association.
- D. File a SAR/STR in relation to corruption involving the nephew and the general.
Answer: C
Explanation:
Explanation
The step that the investigator should take next is to flag the nephew as a PEP by association (D). This is because the nephew is related to a general who is a senior military official and a customer of Bank A, which is a high-risk jurisdiction with strict capital controls. According to the ACAMS Advanced Financial Crimes Investigations Certification Study Guide1, "the FI should identify and flag any customers who are PEPs or have close associations with PEPs, such as family members or business partners" (p. 24). The FI should also conduct enhanced due diligence on these customers and monitor their transactions for any suspicious or unusual activity.
The other options are not correct. The investigator should not file a SAR/STR in relation to corruption involving the nephew and the general (A), as this could be premature or unnecessary, as there is no evidence of corruption or criminal activity between them. The investigator should not determine whether there is a business relationship between the nephew and the general (B), as this is not relevant or material to the investigation, as the nephew and the general are customers of different banks and are not involved in the same transaction. The investigator should not seek senior management approval to continue the relationship with the nephew , as this could be premature or disproportionate, as there is no indication that the nephew poses a high risk or requires termination.
References: 1: ACAMS Advanced Financial Crimes Investigations Certification Study Guide, available at ACAMS
NEW QUESTION # 46
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