CAMS Exam Dumps - ACAMS AML Certification Questions and Answers

According to the Anti-Money Laundering Specialist (the 6th edition) study guide, an AML training program should include the requirement that new staff receive training during employee orientation or shortly thereafter on bank procedures. This is because new staff need to be aware of the bank’s policies and procedures for complying with the money laundering regulations, such as customer due diligence, transaction monitoring, record-keeping, and reporting of suspicious activities. Training new staff as soon as possible also helps to reduce the risk of human errors or oversights that could facilitate money laundering or terrorist financing.

ACAMS, CAMS Certification Package - 6th Edition, Chapter 5, page 143

ACAMS, CAMS Certification Package - 6th Edition, Chapter 5, page 144

Technical factsheet Anti-money laundering (AML) training: frequently asked questions, page 1

In the context ofgambling and gaming sectors, a well-known money laundering typology is the use of platforms tointroduce illicit funds and withdraw them as "winnings". When a customerdeposits large cash amounts and quickly withdraws themwithout engaging in actual gambling, it indicates"placement and layering"techniques.

This behavior is indicative of attempts todisguise the origin of illicit funds, converting them into legitimate-looking financial flows. It is considered a classic red flag in AML programs related to casinos and online gaming.

Under the USA PATRIOT Act, a U.S. bank that maintains a correspondent account for a foreign bank operating under an offshore license must obtain from the foreign bank the name and address of a person residing in the United States who is authorized to accept service of legal process for records related to the correspondent account1. This requirement is intended to facilitate the U.S. authorities’ access to information and records regarding the correspondent account and its underlying transactions, especially in cases where the foreign bank is located in a jurisdiction that does not cooperate with U.S. law enforcement or regulatory requests2.

USA PATRIOT Act, Section 319(b)(2)(A)1

ACAMS, CAMS Examination Study Guide, 6th Edition, Chapter 5, pp. 151-152

Casinos and gambling institutionsare highly vulnerable to money launderingbecause they allow theconversion of cash into chips, checks, or electronic credits, which can later be redeemed as “clean” funds.

Option A (Correct):A privately held company funding multiple patrons' betting accounts is highly suspiciousand may indicate:

Structuring/smurfing, where multiple individuals are used to move illicit funds.

Third-party money laundering, where the real source of funds is obscured.

Trade-based money laundering, if linked to non-gaming businesses.

Why Other Options Are Incorrect:

Option B (Incorrect):Placing multiple bets on the same eventis not inherently suspiciousunless linked tofraudulent betting patterns.

Option C (Incorrect):Large chip purchases in cashmay requirereporting, but they do not necessarily indicatemoney laundering.

Option D (Incorrect):Transferring winnings to another operator may beunusual, butnot automatically suspiciousunless the amount is large and unjustified.

Common Money Laundering Techniques in Casinos:

Chip Walking– Buying chips with illicit funds and cashing them out later as "clean" funds.

Casino Account Transfers– Using multiple accounts or third-party accounts to move funds.

High-Value Gambling with No Loss Intent– Betting on both sides of an event to ensure clean withdrawal of funds.

Best Practices for Casino AML Compliance:

Monitor suspicious large transactions and third-party funding activities.

Perform enhanced due diligence (EDD) on high-risk patrons.

File Suspicious Transaction Reports (STRs) for unusual gambling activity.

An effective AML transaction monitoring system must align withthe bank’s operational complexity, risk exposure, and analytical capabilities.

Option A (Correct):The system must be tailored to the bank’s specific risk profile to ensure effectiveness.

Option D (Correct):A strong AML system should support trend analysis to identify long-term suspicious behaviors.

Why Other Options Are Incorrect:

Option B (Incorrect):While vendor controls are important, they do not determine system suitability.

Option C (Incorrect):User access settings should be based on the bank’s internal risk framework, not industry standards alone.

Best Practices for Implementing an AML Monitoring System:

Ensure scalability to adapt to evolving financial crime risks.

Leverage AI and machine learning to enhance detection accuracy.

Integrate real-time screening and transaction trend analysis.

International cooperationis essential in AML investigations, and theEgmont GroupfacilitatesFIU-to-FIU information sharing.

Option D (Correct):Egmont Group members can request and share intelligence for AML investigationsunder established protocols.

Option A (Incorrect):Sovereignty does not prevent cooperationif proper legal frameworks exist.

Option B (Incorrect):AML regulations permit international data sharing, especially under agreements likeMutual Legal Assistance Treaties (MLATs).

Option C (Incorrect):Data sharing is restricted to authorized entities, notall organizations.

Why This Matters:

Failure toshare AML intelligence across borderscan enable:

Cross-border money laundering.

Terrorist financing networks to operate undetected.

Regulatory penalties for non-compliance.

AMutual Legal Assistance Treaty (MLAT)is aformal agreement between two or more countriesthat facilitatescooperation in legal and law enforcement matters, includingAML investigations.

Option D (Correct):MLATs allow governments to share financial intelligence, request legal assistance, and conduct joint investigations.

Option A (Incorrect):A Memorandum of Agreement (MOA) is typically a non-binding contract used for general business or governmental cooperation.

Option B (Incorrect):A Declaration of Understanding is an informal agreement and does not provide a legal framework for law enforcement cooperation.

Option C (Incorrect):A Memorandum of Understanding (MOU) is often used for informal cooperation but lacks the legal enforceability of an MLAT.

Option E (Incorrect):A Request for Urgent Information is not a recognized international legal instrument.

Best Practices for Cross-Border AML Cooperation:

Use MLATs to request access to financial records in foreign jurisdictions.

Collaborate with Financial Intelligence Units (FIUs) via the Egmont Group.

Leverage FATF’s International Cooperation Review Group (ICRG) for guidance.

According to the ACAMS Study Guide 6th Edition, Chapter 2, page 37, one of the red flags of money laundering or terrorist financing is the use of nominees, trusts, or third parties to hide the identity, ownership, or control of the funds or assets involved in the transaction. Nominees are individuals or entities that act on behalf of the actual or beneficial owners of a company, trust, or account, and may be used to conceal the source, destination, or purpose of the funds or assets. Nominees may also be used to evade taxes, sanctions, or regulatory requirements.

In this case, the compliance officer is unable to verify the identity of the beneficial owners of the company, and only information on the nominee owners was provided. This raises the suspicion that the company may be involved in money laundering or terrorist financing activities, and that the nominee owners may be acting as fronts or intermediaries for the actual or beneficial owners. The compliance officer should conduct further due diligence on the company, the nominee owners, and the beneficial owners, and report any suspicious or unusual activity to the relevant authorities.

ACAMS Study Guide 6th Edition, Chapter 2, page 37

Beneficial Ownership Meaning and Regulation - Investopedia

What is a nominee shareholder? | LawBite

The three statements from the procedure that are in line with Wolfsberg are:

B. The responsible private banker must establish the identity of a holder of general powers over an account (e.g. a signatory for the account) and, as appropriate, verify that identity. This is consistent with the Wolfsberg Principle 1.2.1, which states that the bank will establish the identity of its clients and beneficial owners prior to establishing business relationships with such persons1.

D. The responsible private banker must obtain the necessary documentation establishing the authorized signer’s authority to act on behalf of the account holder or beneficial owner (e.g. a Power of Attorney). This is consistent with the Wolfsberg Principle 1.2.3, which states that the bank will obtain the necessary documentation establishing the authority of the authorized signatory to act on behalf of the client or beneficial owner1.

E. If an individual has signing authority over an account but does not act on a professional basis as a manager of funds, the responsible private banker must understand and document the relationship between that authorized signer, the account holder, and, if different, the beneficial owner of the account. This is consistent with the Wolfsberg Principle 1.2.4, which states that the bank will understand and document the relationship between the authorized signatory, the client and, if different, the beneficial owner of the account1.

1: Wolfsberg Anti-Money Laundering Principles for Private Banking (2012)

 Predicate offenses are the criminal activities that generate the proceeds that are later laundered through money laundering schemes. A country that does not have strong predicate offenses and is lax in prosecuting AML cases could suffer from increased organized crime and corruption, as criminals would have more opportunities and incentives to engage in illicit activities and evade detection and punishment. Organized crime and corruption can have serious social and economic consequences for a country, such as undermining the rule of law, eroding public trust, threatening national security, harming human rights, reducing economic growth, and distorting market competition123.

During an internal investigation, employees should be instructed to do the following actions:

Inform counsel of all request for documentation: This is to ensure that the legal rights and obligations of the organization and the employees are protected and respected. Counsel can also advise on the scope, relevance, and confidentiality of the requested documents1.

Make copies of all documents provided to law enforcement: This is to maintain a record of the information that has been disclosed and to prevent any loss or alteration of the original documents. Copies should be made before the documents are handed over to law enforcement2.

Keep a log of the documents requested: This is to track the progress and status of the investigation and to avoid any duplication or omission of the requested documents. The log should include the date, time, description, and location of the documents, as well as the name and contact details of the person who requested and received them3.

Providing corporate documents directly to law enforcement, on the other hand, is not an action that employees should be instructed to do during an internal investigation. This is because law enforcement may not have the legal authority or the proper warrant to access the documents, and doing so may violate the privacy or confidentiality of the organization or the employees. Employees should consult with counsel before providing any documents to law enforcement4.

1: Internal money laundering reporting | The Law Society5 2: How to Conduct Effective AML Investigations - Blog | Unit212 3: What Is The Importance Of An Internal Investigation?4 4: Anti-Money Laundering: 5 Steps to Conduct an Audit3

these are the main factors that determine the inherent money laundering risk of a financial institution. The customer base, location, products and services of a financial institution affect the type, volume, and complexity of transactions that it processes, as well as the exposure to high-risk customers, jurisdictions, and activities12. A financial institution should review these factors regularly and conduct a comprehensive risk assessment to identify, measure, and mitigate its money laundering risk34.

Anti Money Laundering Risk Assessment - Financial Crime Academy1

Anti-Money-Laundering (AML) Risk Approach Explained | Okta2

Anti-Money Laundering (AML) Risk Assessment | ACAMS4

2024 National Money Laundering Risk Assessment (NMLRA)5

One of the main challenges and risks for online banks is the verification of customer identity and the prevention of identity fraud. Online banks are more vulnerable to moneylaundering and terrorist financing because they do not have face-to-face contact with their customers and may rely on third-party sources or digital methods to verify customer information. Therefore, the most important recommendation for the anti-money laundering expert to make is that the online bank ensures that prospective new customers can be properly identified and that their identity documents and information are verified using reliable and independent sources. This is also in line with the international standards and best practices for anti-money laundering and counter-terrorist financing, such as the FATF Recommendations, the Basel Committee on Banking Supervision principles, and the EU’s Fifth Anti-Money Laundering Directive123

The other options are less important or less effective than ensuring customer identification. Limiting the amount that can be processed per transaction may reduce the exposure to large-scale money laundering, but it does not prevent the use of multiple transactions or accounts to launder smaller amounts. Setting up automated programs to analyze transactions for money laundering activity may enhance the detection and reporting of suspicious transactions, but it does not address the root cause of money laundering, which is the concealment of the source and ownership of illicit funds. Ensuring that a firewall is set up to protect the transactions may improve the security and confidentiality of the online banking system, but it does not prevent the misuse of the system by money launderers who have legitimate access to the system123

1: Anti-Money Laundering Guide for Digital Banks by sanctions.io, 2022

2: The fight against money laundering: Machine learning is a game changer by McKinsey, 2021

3: FATF Guidance on Digital Identity, 2020

According to the Anti-Money Laundering Specialist (the 6th edition) resources, the Egmont Group is an international network of FIUs that facilitates and prompts the exchange of information, knowledge, and cooperation among its members to combat money laundering, terrorist financing, and associated predicate offences1. The Egmont Group suggests that one of the core objectives that would lead to an effective national FIU is to have absolute trust amongst national and international stakeholders before sensitive information will be exchanged with confidence2. This means that the FIU should establish and maintain a high level of credibility, professionalism, and integrity in its operations, and ensure that the information it receives and disseminates is protected and used appropriately. The FIU should also comply with the Egmont Group’s principlesand standards for information exchange, and foster a culture of mutual trust and cooperation with other FIUs and relevant authorities3.

The other three options are incorrect because:

The FIU must operate from physically separated premises from other law enforcement agencies and government offices is not a core objective that the Egmont Group suggests for an effective national FIU. While the FIU should have operational independence and autonomy, and be free from undue influence or interference, it does not necessarily have to be physically separated from other agencies or offices. The FIU may be located within the judicial, law enforcement, administrative, or hybrid model, depending on the country’s legal and institutional framework4.

The FIU meets the Egmont Group assessment criteria is not a core objective that the Egmont Group suggests for an effective national FIU. While meeting the Egmont Group assessment criteria is a requirement for becoming and remaining a member of the Egmont Group, it is not an objective in itself. The assessment criteria are based on the FATF recommendations and the Egmont Group’s own documents, and they serve as a benchmark for evaluating the FIU’s compliance and effectiveness5.

The FIU must be able to promote the value of the government’s commitment to embed a corruption free society within the country is not a core objective that the Egmont Group suggests for an effective national FIU. While the FIU may contribute to the prevention and detection of corruption, as well as the recovery of illicit assets, by analyzing and sharing financial intelligence, it is not the sole or primary responsibility of the FIU to promote the value of the government’s commitment to embed a corruption free society within the country. This is a broader and more complex goal that involves multiple actors and factors, such as political will, legal framework, institutional capacity, civil society, media, and international cooperation.

1: ACAMS, CAMS Study Guide, 6th Edition, Chapter 3, p. 64 2: Egmont Group, Egmont Group of Financial Intelligence Units Principles for Information Exchange Between Financial Intelligence Units, June 2013, 3, p. 2 3: Egmont Group, Egmont Group of Financial Intelligence Units Principles for Information Exchange Between Financial Intelligence Units, June 2013, 3, p. 3-4 4: ACAMS, CAMS Study Guide, 6th Edition, Chapter 3, p. 67 5: Egmont Group, Egmont Group of Financial Intelligence Units Support and Compliance Process, June 2013, [6], p. 3-4 : ACAMS, CAMS Study Guide, 6th Edition, Chapter 4, p. 91-92

The clients are not willing to have their names provided to the bank is a red flag that should stop the agent from discussing this potential purchase further, as this could indicate that the clients are trying to evade customer due diligence (CDD) or know your customer (KYC) requirements, or hide their beneficial ownership or source of funds. According to the U.K. Money Laundering Regulations 2017, real estate agents must conduct CDD on their customers and any beneficial owners, and verify their identity and address1. The U.K. also has a register of people with significant control (PSC) over companies, which requires companies to disclose their beneficial owners2. The use of private companies and wire transfers could also be a sign of layering, a money laundering technique that involves moving funds through multiple accounts or entities to obscure their origin3.

1: U.K. Government, Money Laundering Regulations 2017, Part 2: Customer Due Diligence, Section 5-6 2: U.K. Government, People with significant control (PSC) register, Overview 3: ACAMS CAMS Certification Study Guide, 6th Edition, Chapter 1: Risks and Methods of Money Laundering and Terrorist Financing, Page 19

According to the ACAMS Study Guide, 6th Edition, page 184, “The decision to close an account should be made in consultation with the institution’s legal counsel and AML compliance officer, and in accordance with the institution’s policies and procedures.” Closing an account may not always be the best option, as it may trigger the customer’s suspicion, interfere with law enforcement investigations, or expose the institution to legal risks. Therefore, the institution should carefully weigh the pros and cons of closing an account, and follow its own internal guidelines.

ACAMS Study Guide, 6th Edition, page 184

What steps should the institution take? - Exam4Training

Suspicious Transaction Report (STR) / Suspicious Activity Report (SAR) | AML-CFT

 Money laundering has severe social and economic impacts, including increased crime rates, corruption and erosion of public trust. Money laundering fuels criminal activities by providing the necessary financial resources for criminals to continue their operations. As illicit funds circulate within the financial system, they enable the growth of criminal organizations and contribute to an increase in crime rates, including organized crime1. Money laundering also facilitates corruption and undermines public trust in financial institutions and the wider economy. This erosion of public trust is exacerbated by trade-based money laundering, which involves the manipulation of international trade transactions to disguise the origins of illicit funds2. Money laundering also weakens financial institutions by exposing them to reputational, operational, legal and regulatory risks. Money launderers exploit the vulnerabilities of financial systems and compromisetheir integrity and stability. Money laundering can also distort the allocation of resources, create inflationary pressures, and undermine the effectiveness of monetary policy3.

1: Consequences Of Money Laundering Are: Understanding The Social, Economic, and Penalties Impacts1

2: Consequences of Money Laundering and Financial Crime2

3: Money laundering, its impact and consequences3