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NEW QUESTION # 346
What describes the Black Market Peso Exchange money laundering method?

• A. A method used to smuggle dollars or pesos across that border from the U.S. to Mexico, and vice versa
• B. A method primarily used by narcotics traffickers to transfer value back to the source country
• C. An undercover technique to identify politically exposed persons who may assist money launderers
• D. The best known money laundering method used by known terrorists

Answer: B

Explanation:
The Black Market Peso Exchange (BMPE) is a trade-based money laundering technique commonly used by narcotics traffickers based in Colombia and Mexico. The central feature is the use of a money trader to ensure that the revenue from drug sales in the U.S. doesn't actually cross any borders. Instead, those dollars are used to purchase any number of legitimate commodities from unsuspecting businesses on behalf of legitimate South American businesspersons, whose legitimate imports are used to obtain pesos for the drug cartels12. The BMPE involves six distinct steps:
Obtaining criminal proceeds: The drug cartels sell drugs for dollars in the U.S.
Involvement of intermediary services: The drug cartels sell the dollars to black market peso exchangers in Colombia at a discounted rate.
Identification of complicit companies: The black market peso exchangers identify exporting companies in the U.S. and importing companies in South America that are willing to participate in the scheme.
Placement of funds: The black market peso exchangers deposit the dollars into U.S. bank accounts or use money service businesses or other methods to transfer the funds.
Layering of funds: The black market peso exchangers use the funds to purchase monetary instruments such as checks, money orders, or wire transfers, or to pay for the goods ordered by the South American importers.
Integration of funds: The South American importers receive the goods or the monetary instruments and use them to pay for their imports or to sell them for pesos in the local market.
References:
1: Black Market Peso Exchange in Money Laundering - Financial Crime Academy
2: Overview - FinCEN.gov

NEW QUESTION # 347
Which three areas do FATF's 40 recommendations cover? Choose 3 answers

• A. Prescriptive sentences for predicate offenses
• B. Financial systems and their regulation
• C. The criminal justice system
• D. International Cooperation

Answer: A,B,D

NEW QUESTION # 348
A well-developed anti-money laundering compliance program is unlikely to achieve institutional goals without

• A. Screening all staff.
• B. Endorsement by a competent authority.
• C. Verification of account owners.
• D. Training appropriate employees.

Answer: B

NEW QUESTION # 349
Which two steps should a financial institution take when it receives a law enforcement request to keep an account open that may be associated with suspicious or criminal activity? (Choose two.)

• A. Ask for a written request from the law enforcement agency that defines the duration
• B. Maintain account records for at least five years after the request expires
• C. File a suspicious transaction report on the account owner(s)
• D. Stop filing suspicious transaction reports because law enforcement will be monitoring the account

Answer: A,B

Explanation:
According to the Anti-Money Laundering Specialist (the 6th edition) study guide, when a financial institution receives a law enforcement request to keep an account open that may be associated with suspicious or criminal activity, it should take the following two steps:
Maintain account records for at least five years after the request expires. This is to ensure that the financial institution can provide evidence of its compliance with the law enforcement request and the applicable anti-money laundering regulations. The five-year retention period is based on the international standard set by the Financial Action Task Force (FATF) and adopted by many jurisdictions12.
Ask for a written request from the law enforcement agency that defines the duration. This is to protect the financial institution from potential liability and to clarify the scope and purpose of the law enforcement request. The written request should specify the time period for which the account should remain open, the reason for the request, the contact information of the law enforcement officer, and the legal authority for the request34.
References:
Anti-Money Laundering Specialist (the 6th edition) study guide, page 57 FATF Recommendation 11, paragraph 2 Anti-Money Laundering Specialist (the 6th edition) study guide, page 58 Money Laundering website, article on "Law Enforcement Requests to Keep Accounts Open"
https://www.fincen.gov/resources/statutes-regulations/guidance/requests-law-enforcement-financial-institutions-

NEW QUESTION # 350
What should a bank focus on to ensure on-going compliance with its AML program?

• A. It should ensure that the regulators have reviewed and have approved the bank's AML program
• B. It should review and update its transaction monitoring system
• C. It should ensure that it develops and provides on-going targeted training of all current and new employees
• D. It should subject all new employees to criminal background checks before being hired

Answer: C

NEW QUESTION # 351
A new business opened an account at a bank. After a month of activity, the account is referred to AML Investigations for potential human trafficking activity.
Which red flags most likely triggered the referral?(Select Two.)

• A. Several cash deposits along the country's border that are quickly withdrawn by third parties _ Multiple purchases of virtual currency at or just below the reporting threshold
• B. Several lodging and food payments made on the same day at unusual hours for a business
• C. Trade in large volumes conducted with countries that are part of the diamond pipeline
• D. Conducting the businesses transactions online without visiting a branch

Answer: A,B

Explanation:
Explanation
The red flags that most likely triggered the referral are:
Several cash deposits along the country's border that are quickly withdrawn by third parties. C. Several lodging and food payments made on the same day at unusual hours for a business.
Red flag B suggests possible structuring activity, where individuals are trying to avoid currency transaction reporting requirements by depositing and withdrawing cash in amounts below the reporting threshold. This activity is often associated with money laundering and could indicate human trafficking activity.
Red flag C suggests unusual activity that may be indicative of human trafficking, such as lodging and food payments made at unusual hours or in unusual patterns. This type of activity could indicate that the business is being used as a front for human trafficking or that the individuals involved in the trafficking are using the business to facilitate their activities.

NEW QUESTION # 352
An incoming urgent international wire transfer in U.S. dollars has been identified by the sanctions screening team. The transaction is a large rounded amount and the name of the beneficiary is "North Korean Cigars Company" with an address in an industrial zone in Tianjin, China.
Which action should the sanctions team take?

• A. Call the correspondent bank and ask if it has performed due diligence on the originator
• B. Block the transaction immediately because it contains a reference to North Korea
• C. Hold the transaction and investigate the company before releasing the funds
• D. Release the transaction so that the Chinese correspondent bank will not be negatively impacted

Answer: A

NEW QUESTION # 353
What is one recommendation of the Basel Committee's 2001 paper Customer Due Diligence for Banks"?

• A. Numbered accounts should not be allowed
• B. Politically Exposed Persons (PEPs) should not be accepted as customers
• C. Certain types of private banking can be exempt from KYC procedures
• D. Banks should develop dear descriptions of acceptable customers

Answer: D

NEW QUESTION # 354
Which information should be gathered as part of enhanced due diligence (EDD) for a high-risk customer?

• A. Explanations for changes in marital status
• B. Personal references
• C. Plans for traveling in business trips
• D. Details on individuals with control over the account

Answer: D

Explanation:
According to the CAMS Study Guide, EDD is a higher level of scrutiny applied to customers who pose a greater risk of money laundering or terrorist financing. EDD may include obtaining additional information on the customer's identity, source of funds, business activities, beneficial owners, and expected transactions.
Details on individuals with control over the account are relevant for EDD, as they may indicate the involvement of politically exposed persons (PEPs), sanctioned individuals, or other high-risk entities.
Therefore, this information should be gathered as part of EDD for a high-risk customer.
References: CAMS Study Guide, 6th Edition, Chapter 4, page 121.
Reference: https://sanctionscanner.com/knowledge-base/customer-due-diligence-cdd-15

NEW QUESTION # 355
A foreign politically exposed person (PEP) requests to add a beneficiary to a life insurance policy.
How should the request be processed to mitigate risk?

• A. Decline the request to add a beneficiary due to increased risk
• B. Decline the request if the beneficiary is a foreign PEP
• C. Perform due diligence on the beneficiary
• D. Determine the source of wealth and source of funds

Answer: C

NEW QUESTION # 356
Which methods are typically used to launder money using insurance companies? (Choose two.)

• A. The policy holder uses an offshore company to pay the insurance installments.
• B. The policy holder is strongly interested in how many costs are incurred when taking out an insurance policy.
• C. The policy holder overpays the policy and moves the funds out of the policy despite paying early withdrawal penalties.
• D. The policy holder purchases a bond and redeems it at a discount prior to its full term.
• E. The policy holder enters a sibling as a beneficiary of the insurance policy rather than themselves.

Answer: A,C

NEW QUESTION # 357
A company contracts a life insurance policy with a savings feature of 100,000 USD for an individual in a high-risk country. The policy receives monthly cash deposits from unknown third parties. A minimal part of the deposit is invested and the rest is withdrawn by the end of the month. Which are the circumstances to consider as a risk for money laundering? (Select Two.)

• A. Unidentified third parties depositing cash to the policy
• B. A policy for an amount of 100,000 USD is to be considered high and suspicious
• C. A life insurance policy with a savings feature for a national from a high-risk country
• D. A company established in a high-risk country contracting a policy for a domestic individual
• E. The regular withdrawals from the policy by the end of the month

Answer: A,E

Explanation:
According to the ACAMS CAMS Study Guide (the 6th edition), one of the common methods of money laundering in the insurance sector is to purchase policies with illicit funds, overpay premiums, and then cancel or surrender the policies to receive refunds or payouts1. This allows criminals to move and disguise the source of their funds through the insurance company. Therefore, the regular withdrawals from the policy by the end of the month could indicate a money laundering scheme. Moreover, the FATF Guidance for a Risk-Based Approach for the Life Insurance Sector states that unidentified third parties depositing cash to the policy could also pose a high money laundering risk, as cash transactions are difficult to trace and third parties may act as intermediaries or nominees for the real beneficiaries2. Therefore, the insurance company should conduct enhanced due diligence on the policyholder and the third parties, and monitor the transactions for any suspicious activity.
References:
ACAMS CAMS Study Guide (the 6th edition), Chapter 2: Money Laundering Risks and Methods, page
671
FATF Guidance for a Risk-Based Approach for the Life Insurance Sector, pages 18-192

NEW QUESTION # 358
A popular restaurant in town has begun depositing less cash than it has in prior years. In a review of the customer's accounts, you notice that credit card receipts have increased with no .
The account officer discovers that the restaurant has installed a privately-owned automated teller machine (ATM) onsite and has begun construction on a patio dining area.
Which red flag should trigger additional investigation?

• A. Increased credit card receipts
• B. Privately-owned ATM
• C. Construction of the new patio dining area
• D. Lower cash deposits

Answer: B

Explanation:
According to the ACAMS study guide, one of the red flags for money laundering in cash-intensive businesses is "the presence of privately-owned ATMs on the premises" (p. 222). This could indicate that the business is using the ATM to deposit or withdraw large amounts of cash from illicit sources, or to facilitate the movement of funds across borders. The other options are not necessarily indicative of money laundering risk, as they could be explained by legitimate factors such as the change in customer preferences, the economic situation, or the expansion of the business.
References:
ACAMS. (2020). Study Guide for the Certification Examination for Anti-Money Laundering Specialists (6th ed.). Miami, FL: ACAMS.
CFI. (2023)Money Laundering - Overview, How It Works, Example 1. Retrieved from
https://corporatefinanceinstitute.com
CALERT. (2016)How Do Criminals Launder Money Through a Restaurant? 2. Retrieved from
https://calert.info

NEW QUESTION # 359
A compliance officer at an insurance company has been reviewing the transaction activity of several clients.
Which transaction is considered a red flag for potential money laundering?

• A. A client from a high-risk jurisdiction recently purchased property insurance for a real-estate development.
• B. A client paid the quarterly life insurance premium using money orders from two different banks.
• C. A corporation owns several affiliates and recently opened separate group life insurance policies for each of the affiliates.
• D. A client established a $100,000 charitable annuity with a non-profit organization that provides health and safety assistance internationally.

Answer: B

Explanation:
Explanation
https://www.naic.org/documents/committees_d_antifraud_meetingcc_faqsinsurance_103105.pdf

NEW QUESTION # 360
Which is a key aspect in the FATF Recommendations that best describes the essential foundation for allocating resources in AML/CFT regimes for countries and financial institutions (FIs)?

• A. Enforcing mutual legal assistance
• B. Applying a risk-based approach
• C. Performing country peer-to-peer evaluations
• D. Implementing targeted financial sanctions

Answer: B

Explanation:
The risk-based approach (RBA) is an essential foundation of the FATF Recommendations, as it allows countries, competent authorities and financial institutions to adopt a more flexible set of measures to target their resources more effectively and apply preventive measures that are commensurate to the nature of risks, in order to focus their efforts in the most effective way. The RBA is not optional, but a prerequisite for the effective implementation of the FATF Standards. The RBA requires the identification, assessment and understanding of the ML/TF risks to which the countries and FIs are exposed, and the implementation of AML/CFT measures that are proportionate and tailored to those risks. The RBA is not a "zero failure" approach, but a way to mitigate the risks in the most efficient and effective manner.
References:
FATF Recommendations, Introduction, page 11
FATF Guidance on the Risk-Based Approach to Combating Money Laundering and Terrorist Financing
- High Level Principles and Procedures, page 3
Risk-based Approach (RBA), What is the Risk-based Approach (RBA)?

NEW QUESTION # 361
Which three circumstances are indicators for defining a customer as required additional diligence according to the Wolfsberg Principles on Private Banking? Choose 3 answers

• A. Persons engaged in business activities known to be susceptible to money laundering
• B. Persons residing in a having funds from countries with inadequate AML standards
• C. Persons who receive funds from a correspondent banking relationship
• D. Persons determined to be Politically Exposed Persons (PEPs)

Answer: A,B,D

Explanation:
According to the Wolfsberg Principles on Private Banking, the bank should apply additional diligence to customers who present a higher risk of money laundering or other financial crimes. Some of the indicators for defining such customers are:
Persons residing in or having funds from countries with inadequate AML standards, sanctions, embargoes, or other measures that indicate a higher risk of money laundering or terrorist financing12.
Persons engaged in business activities known to be susceptible to money laundering, such as cash-intensive businesses, gambling, arms trade, precious metals and stones, art and antiquities, etc13.
Persons determined to be Politically Exposed Persons (PEPs), who are individuals who hold or have held positions of public trust or influence, or their family members or close associates, and who may pose a higher risk of corruption, bribery, or abuse of power14.
Persons who receive funds from a correspondent banking relationship are not necessarily required additional diligence, unless they fall under any of the above categories or other risk factors. Correspondent banking is a service provided by one bank to another bank to facilitate cross-border transactions, and it is subject to its own set of AML standards and due diligence measures5.
References:
Wolfsberg Anti-Money Laundering Principles for Private Banking (2012) 1 FATF High-Risk and Other Monitored Jurisdictions FATF Money Laundering and Terrorist Financing Vulnerabilities of Legal Professionals FATF Guidance on Politically Exposed Persons (Recommendations 12 and 22) FATF Guidance on Correspondent Banking Services

NEW QUESTION # 362
A branch manager for a small community bank has a new customer who deposits four EUR 50,000 checks into one account. Shortly thereafter, the customer goes to another branch and asks to transfer all but EUR 1,500 to three accounts in different foreign jurisdictions.
Which suspicious activity should be the focus of the suspicious transaction report?

• A. The customer opened the account with four large checks
• B. The customer transfers almost all of the funds out of the account
• C. The customer asks to transfer funds to accounts in three different foreign jurisdictions
• D. The customer goes to a different branch to make this transaction

Answer: D

NEW QUESTION # 363
A popular restaurant in town has begun depositing less cash than it has in prior years. In a review of the customer's accounts, you notice that credit card receipts have increased with no explanation.
The account officer discovers that the restaurant has installed a privately-owned automated teller machine (ATM) onsite and has begun construction of a patio dining area.
Which red flag should trigger additional investigation?

• A. Increased credit card receipts
• B. Construction of the new patio dining area
• C. Privately-owned ATM
• D. Lower cash deposits

Answer: A

NEW QUESTION # 364
You need to design an application that will analyze real-time data from financial feeds.
The data will be ingested into Azure IoT Hub. The data must be processed as quickly as possible in the order in which it is ingested.
Which service should you include in the design?

• A. Apache Kafka
• B. Azure Data Factory
• C. Azure Notification Hubs
• D. Azure Queue storage
• E. Azure Stream Analytics
• F. Azure Event Hubs

Answer: E

Explanation:
Stream processing can be handled by Azure Stream Analytics. Azure Stream Analytics can run perpetual queries against an unbounded stream of data. These queries consume streams of data from storage or message brokers, filter and aggregate the data based on temporal windows, and write the results to sinks such as storage, databases, or directly to reports in Power BI. Stream Analytics uses a SQL-based query language that supports temporal and geospatial constructs, and can be extended using JavaScript.
Incorrect Answers:
E: Apache Kafka is used for ingestion, not for stream processing.
F: Azure Event Hubs is used for ingestion, not for stream processing.
Reference:
https://docs.microsoft.com/en-us/azure/architecture/data-guide/big-data/real-time-processing

NEW QUESTION # 365
After evaluating recent changes to international standards, an anti-money laundering specialist should consider enhanced due diligence on accounts held by
1. lawyers.
2. foreign exchange dealers.
3. retail account holders.
4. precious metal dealers.

• A. 2, 3, and 4 only
• B. 1, 3, and 4 only
• C. 1, 2, and 4 only
• D. 1, 2, and 3 only

Answer: C

NEW QUESTION # 366
What types of things should an institution incorporate in it AML policies and procedures? Choose 3 answers

• A. Review of the AML policy by the Board of Directors
• B. On-going training, as well as initial training of new employees
• C. Ability to incorporate relevant legislative and regulatory AML changes
• D. Periodic audits, to be performed by independent staff at least once a year

Answer: B,C,D

NEW QUESTION # 367
What are some of the methods for sharing information and cooperating on an international basis? Choose 3 answers

• A. Regulatory sharing through Supervisory Channels
• B. Mutual Assistance Legal Treaties
• C. Issuance subpoenas
• D. International Money Laundering Information Network

Answer: A,B,D

NEW QUESTION # 368
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? (Choose two.)

• A. Identify the money laundering scheme and submit a suspicious transaction report
• B. Identify deposits by casas de cambio that include third-party items including sequentially numbered monetary instruments
• C. Identify if there is a decrease in the sale of large denomination U.S. bank notes to casas de cambio by the bank
• D. 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

Answer: A,D

Explanation:
According to the ACAMS Study Guide 6th Edition, Chapter 2, page 38, one of the steps that a financial institution should take when it suspects money laundering activity is to file a suspicious transaction report (STR) or a suspicious activity report (SAR) to the relevant authorities. This will alert the regulators and law enforcement of the potential money laundering scheme and provide them with valuable information to trace the funds and identify the perpetrators.
Another step that a financial institution should take is to identify any unusual or suspicious wire transfers initiated by casas de cambio to jurisdictions outside of Mexico that bear no apparent business relationship with that casa de cambio. This could indicate that the casas de cambio are involved in layering and integration stages of money laundering, where they are moving the illicit funds across borders and disguising their origin and ownership. The financial institution should monitor and document these wire transfers and report them to the authorities if necessary.
Option B is not a relevant step to trace funds through the bank, as it does not provide any information about the source, destination, or purpose of the funds. A decrease in the sale of large denomination U.S. bank notes to casas de cambio by the bank could be due to various factors, such as market demand, exchange rates, or regulatory changes, and does not necessarily indicate money laundering activity.
Option C is also not a relevant step to trace funds through the bank, as it does not indicate any connection to the suspected money laundering scheme. Deposits by casas de cambio that include third-party items, such as sequentially numbered monetary instruments, could be legitimate transactions that are part of the normal business operations of the casas de cambio. Unless there is evidence that these deposits are related to the sale of large denomination U.S. bank notes or the Mexican syndicate, they are not useful for tracing the funds.
References:
ACAMS Study Guide 6th Edition, Chapter 2, page 38
Combating Money Laundering and Other Forms of Illicit Finance
Sting Operation Snares Casa de Cambio for Allegedly Laundering Millions Through U.S. Banks

NEW QUESTION # 369
What three attributes do havens for money laundering and terrorist financing typically have? Choose 3 answers

• A. Limited types of institutions and persons covered by money laundering laws and regulations
• B. Little enforcement of the laws, weak penalties or provisions that make it difficult to confiscate or freeze assets related to money laundering
• C. Absence of an effective FIU
• D. A large number of predicate crimes for money laundering

Answer: A,B,C

Explanation:
Havens for money laundering and terrorist financing are jurisdictions that offer a high degree of anonymity, secrecy, and protection to criminals who seek to conceal or move their illicit funds. These havens typically have the following three attributes12:
Limited types of institutions and persons covered by money laundering laws and regulations. This means that only a narrow range of financial activities or entities are subject to anti-money laundering (AML) and combatting the financing of terrorism (CFT) obligations, such as customer due diligence, record-keeping, reporting, and supervision. For example, some havens may exclude lawyers, accountants, trust and company service providers, or non-bank financial institutions from AML/CFT requirements.
Little enforcement of the laws, weak penalties or provisions that make it difficult to confiscate or freeze assets related to money laundering. This means that the authorities in these havens lack the political will, resources, or capacity to effectively implement and enforce the AML/CFT laws and regulations. They may also impose low sanctions or fines for non-compliance, or create legal barriers or obstacles for the confiscation or freezing of assets that are the proceeds of, or used in, or intended or allocated for use in, money laundering, terrorist financing, or other crimes.
Absence of an effective FIU. This means that these havens do not have a central agency that is responsible for receiving, analyzing, and disseminating financial intelligence related to money laundering, terrorist financing, and other crimes. An effective FIU is essential for facilitating domestic and international cooperation and information exchange, as well as for supporting investigations and prosecutions of money laundering and terrorist financing cases.
References:
1: The IMF and the Fight Against Money Laundering and Terrorism Financing, 1 2: IX Special Recommendations, 2

NEW QUESTION # 370
After a FATF mutual evaluation process, which are resulting actions for jurisdictions that are determined to have strategic deficiencies in their regimes to counter money laundering, terrorist financing, and proliferation financing? (Choose two.)

• A. Report to FATF on the implementation of their progress under the enhanced follow-up mechanism.
• B. Appeal to FATF for a technical compliance re-rating based on the jurisdiction's own experts criteria.
• C. Expect private statements from FATF regarding the level of compliance of the jurisdiction, when insufficient progress is made.
• D. Request FATF for an extension of deadlines in order to provide local awareness on the improvements that are necessary to solve the deficiencies.
• E. Demonstrate a high-level commitment to swiftly resolve the identified deficiencies in the FATF mutual evaluation report.

Answer: A,E

NEW QUESTION # 371
......

The CAMS certification exam is highly regarded by employers and regulatory agencies worldwide, as it demonstrates the candidate’s commitment to the highest standards of AML and financial crime prevention. CAMS exam covers four key areas of AML and financial crime prevention: risk assessment, customer due diligence, transaction monitoring, and investigations. Candidates must pass a 120-question multiple-choice exam within a four-hour time limit, and they must score at least 75% to pass. The CAMS certification is valid for three years, and continuing education is required to maintain the certification.

 

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