ACAMS Updated CAMS Exam Questions and Answers by aston

According to the Basel Committee on Banking Supervision principles, one of the core principles for effective banking supervision is that the supervisor determines that banks have adequate policies and processes for identifying, assessing and managing the risk and impact of exposures to and transactions with related parties, and that these policies and processes are effectively implemented1. Failure to conduct proper due diligence on a close relative of a senior manager who requests to open an account poses the highest operational risk, as it could result in conflicts of interest, reputational damage, legal liability, or financial losses for the bank. The other options are not necessarily the highest operational risk, as they depend on the nature and extent of the relationship, the type and size of the account, and the regulatory and legal framework of the jurisdiction.

References: 1 Core principles for effective banking supervision, Principle 20.

 A financial institution can verify the nature and purpose of a business and its legitimacy by using an independent information verification process, such as by accessing public and private databases. This method can help the financial institution to check the names of businesses against anti-money laundering (AML) watchlists, parse and analyze ownership information to determine beneficial ownership structure, and run the beneficial owners themselves through identity verification and AML watchlist checks1. This can also help the financial institution to comply with the regulatory requirements for customer due diligence (CDD), which include obtaining and analyzing sufficient customer information to understand the nature and purpose of customer relationships for the purpose of developing a customer risk profile2. Other methods, such as reviewing a copy of the corporation’s latest audited reports and accounts, undertaking a company search or other commercial inquiries, or reviewing the company’s website, may not provide sufficient or reliable information to verify the nature and purpose of a business and its legitimacy.

References:

Customer due diligence for banks by the Basel Committee on Banking Supervision, October 2001.

How to Verify Legitimate Businesses and Merchants by Trulioo, March 2021.

The correct answer is A and D, as these two statements are directly quoted from the Wolfsberg Group’s “Suppression of the Financing of Terrorism” document1. Statement A describes the general role of financial institutions in the fight against terrorism, while statement D describes the specific due diligence measures that financial institutions should apply to customers engaged in high-risk sectors or activities. Statement B and C are not part of the Wolfsberg Group’s document, and they are not accurate descriptions of the role of financial institutions in the fight against terrorism. Statement B is too vague and unrealistic, as financial institutions cannot guarantee to drive down terrorism by analyzing activity types. Statement C is too narrow and prescriptive, as financial institutions may not have the resources or the mandate to create dedicated financial intelligence units for terrorist financing.

References: 1: The Suppression of the Financing of Terrorism – Wolfsberg Statement, page 213-214.

A corporate account opened on behalf of several beneficial owners is a red flag because it may indicate an attempt to conceal the identity or source of funds of the ultimate beneficiaries1. The customer’s stated investment goal of long-term investment is not reflective of the account activity, which involves frequent and large transfers, currency exchanges, and account depletion within a short period of time. This discrepancy may suggest that the customer is using the account for money laundering or other illicit purposes2.

References: = 1: ACAMS CAMS Certification Video Training Course - Exam-Labs, Module 3, Lesson 4, Topic: Corporate Accounts 2: ACAMS CAMS Certification Video Training Course - Exam-Labs, Module 3, Lesson 4, Topic: Customer Profile and Account Activity