CAMS Exam Dumps - ACAMS AML Certifications Questions and Answers

Public-Private Partnerships (PPPs)are collaborative initiatives involvinglaw enforcement, FIUs, and financial institutions. Their objective is to improve theefficiency and effectivenessof the fight against money laundering, terrorist financing, and other financial crimes bysharing both operational and strategic intelligence.

Option A – Exchange operational information between public authorities and obliged entities:

PPPs often facilitate real-time or near-real-time information sharing that supportsspecific investigations and the detection of suspicious activity, helping financial institutions respond quickly and accurately to ongoing threats.

Option B – Exchange strategic information between FIUs and obliged entities:

Strategic-level intelligence sharing helps financial institutionsunderstand typologies, risk trends, and evolving criminal methods, thereby strengthening their risk assessments and transaction monitoring frameworks.

Option Cis incorrect: Strategic information exchange between private institutions is limited and heavily regulated.

Option Dis incorrect: FATF does not collect or manage databases of suspicious activity reports; it sets standards and reviews national frameworks.

Establishing a surveillance program with periodic risk assessments, access controls, and regular compliance reviews for employees, vendors, and third parties is the most effective way to mitigate insider threats and ensure ongoing adherence to AML regulations. This proactive approach continuously monitors risk rather than relying solely on initial checks or self-certifications.

Money Services Businesses (MSBs)are commonly recognized by regulatory and supervisory authorities as havinghigher inherent AML/CFT risk, particularly due to certain business characteristics.

Option B – The prevalence of international wire transfers:

MSBs often facilitatecross-border transactions, which present a higher money laundering and terrorist financing risk due to challenges in verifying customer identity, the origin of funds, and the end destination—especially when dealing with higher-risk jurisdictions.

Option D – The cash-intensive nature of the services offered:

Many MSBs deal primarily incash, which increases the risk ofanonymous transactionsandfunds layering, making it harder to trace illicit activity. Cash is the most vulnerable medium for placement of illicit funds into the financial system.

Option AandOption E, while involving modern technologies,can actually reduce riskwhen implemented with proper controls (e.g., secure digital onboarding and traceable payments enhance auditability).

Option Cdoes not in itself signal high AML risk unless combined with other red flags.

Risk assessment is the foundation of an effective AML compliance program. It enables an organization to identify, understand, and prioritize its exposure to money laundering and terrorist financing risks, which in turn informs the development of appropriate controls, including policies, procedures, and customer due diligence measures.

Red flags include using personal accounts for business transactions (which can obscure fund tracing), preferring minimal direct interaction (potentially avoiding scrutiny), and unclear ultimate beneficial ownership (which can conceal the true controllers of the entity and facilitate illicit activity).

Trust and Company Service Providers (TCSPs) pose the greatest financial crime risks when they use trusts to obscure beneficial ownership, promote complex corporate structures that make tracing ownership difficult, and establish shell companies that can be used to hold and move illicit funds. These activities can facilitate money laundering, tax evasion, and other financial crimes by concealing the true origin and control of assets.

The CAMS 6th Edition specifically lists environmental crime as a predicate offense for money laundering. Environmental crimes include activities such as illegal logging, illegal mining, and illegal trade in wildlife.

“Environmental crime, including illegal logging and mining, is recognized as a predicate offense to money laundering. Such crimes often involve complex corporate structures to hide the illicit origin of the proceeds.”

(CAMS 6th Edition, Chapter: Risks and Methods of Money Laundering and Terrorist Financing; FATF Recommendations, Predicate Offenses)

Incorrect Options:

A: Trade-based ML refers to manipulating trade transactions, not the underlying crime.

B: Corruption may be involved, but the primary crime is environmental.

C: Illicit resource trade describes the act, but the official predicate crime category is environmental crime.

A: The purchase of high-value real estate using cash in multiple transactions—especially without clear economic justification—is a classic money laundering typology. The goal is typically to integrate illicit funds into the legitimate economy and obscure their origin.

“Large cash purchases of property without an obvious economic rationale are a significant red flag for money laundering in the real estate sector.”

This typology is highlighted in CAMS 6th Edition and the FATF’s guidance on real estate ML/TF risks.

Transaction monitoring governanceinvolves ensuring thatAML detection systems are effective, aligned with regulatory standards, and capable of identifying evolving threats.

Option B (Correct):Legal cooperation is essential for responding to subpoenas and law enforcement inquiries.

Option D (Correct):Regularly updating transaction monitoring scenarios ensures that the system adapts to emerging financial crime trends.

Why Other Options Are Incorrect:

Option A (Incorrect):SARs cannot be withdrawn unless an error was made—once filed, SARs remain confidential and must be retained.

Option C (Incorrect):Client profile updates are a CDD/KYC function, not directly related to transaction monitoring governance.

Best Practices for Transaction Monitoring Governance:

Regularly review system effectiveness through validation tests.

Collaborate with legal and compliance teams for risk mitigation.

Use AI and data analytics to refine detection accuracy.

FATF Recommendation 29 states that an FIU should serve as a national center for the receipt and analysis of suspicious transaction reports and other information relevant to money laundering and terrorist financing.

“The FIU should serve as a national center for the receipt and analysis of suspicious transaction reports (STRs) and other information relevant to ML/TF, and for the dissemination of the results of that analysis.”

(CAMS 6th Edition, Role of the FIU; FATF Recommendation 29)