CAMS Practice Questions
Questions
and Answers 100% Correct
"Establishing compliance as a key responsibility for every employee of a financial institution is
best performed how?
A. By having senior management require compliance as a condition of employment.
B. By having auditors conduct testing on employee compliance.
C. By pointing out the regulatory consequences of noncompliance in training.
D. By having the AML officer personally tell associates of their responsibilities."✔✔A - By
having senior management require compliance as a condition of employment.
"What are the three key goals of an anti-money laundering program?
A. Prevent and detect money laundering and terrorist financing; report suspicious activity to
proper authorities if the laws or regulations require it; train all pertinent employees.
B. Satisfy regulatory requirements; report suspicious activity to proper authorities if the laws or
regulations require it; train all pertinent employees.
C. Train all pertinent employees if the laws require it; prevent money laundering; prevent
terrorist financing.
D. Reduce regulatory burdens; help the court systems in convicting money launderers; protect
the institution."✔✔A - Prevent and detect money laundering and terrorist financing; report
suspicious activity to proper authorities if the laws or regulations require it; train all pertinent
employees.
"The Reporting Officer of a financial institution should:
A. Report everything that comes his way from anyone in the organization.
B. Report everything that comes his way from senior management or Board of Directors.
,C. Review available information related to the customer, transactions, profile, history and file a
Suspicious Transaction Report for only those customers where a suspicion of money laundering
exists.
D. Report only what the Reporting Officer's superior agrees should be reported."✔✔C - Review
available information related to the customer, transactions, profile, history and file a Suspicious
Transaction Report for only those customers where a suspicion of money laundering exists.
"As part of their role in fighting money laundering, financial institutions should:
A. Designate a compliance officer.
B. Depend solely on The State's staff for combating money laundering.
C. Refuse small cash deposits under the reporting threshold.
D. Not open accounts for people from high risk jurisdictions."✔✔A - Designate a compliance
officer.
"International trade in goods and services can be used as either a cover for money laundering or
as the laundering mechanism itself. What is MOST important for the launderer when engaging in
this method? The ability:
A. To over- or under-invoice the goods.
B. To sell the exported goods for as much as possible.
C. To use goods that do not need to be declared.
D. To use high-value assets such as luxury cars or boats."✔✔A - To over- or under-invoice the
goods.
"Which of the following best describes the "alternative remittance system"?
A. The transfer of values between countries, outside of the legitimate banking system.
B. A non-electronic data remittance system used in several NCCT countries to report suspicious
activities.
,C. Old-fashioned reporting requirements commonly used in non-cooperative countries and
territories.
D. The transfer of funds between two or more financial institutions using concentration
accounts."✔✔A - The transfer of values between countries, outside of the legitimate banking
system.
"Which statement is true?
A. Bust-out schemes are popular in creating large bankruptcy frauds where businesses secure
increasing loans in excess of the actual value of the company or property and then run with the
money, leaving the lender to foreclose and take a substantial loss.
B. Cuckoo smurfing is a significant money laundering technique identified by the Financial
Action Task Force, where a form of structuring uses nested accounts with shell banks in secrecy
havens.
C. In its 40 Recommendations, the FATF issued a list of "designated categories of offense" that
asserts crimes for a money laundering prosecution.
D. E-cash is not attractive to the money launderer because it cannot be completely anonymous
and does not allow for large amounts to be "transported" quickly and easily."✔✔A - Bust-out
schemes are popular in creating large bankruptcy frauds where businesses secure increasing
loans in excess of the actual value of the company or property and then run with the money,
leaving the lender to foreclose and take a substantial loss.
"Which of the following should a national legislature consider when criminalizing money
laundering in line with the CFATF 19 Recommendations (choose three)?
A. Do not limit the number of specific predicate offenses for money laundering.
B. Criminalize conspiracy or association to engage in money laundering.
C. Indicate whether it is relevant that a predicate offense may have been committed outside the
local jurisdiction.
D. Avoid criminalizing money laundering offenses in which the offender lacks actual knowledge
of a criminal connection to funds."✔✔A, B, C -
A. Do not limit the number of specific predicate offenses for money laundering.
B. Criminalize conspiracy or association to engage in money laundering.
, C. Indicate whether it is relevant that a predicate offense may have been committed outside the
local jurisdiction.
"The FATF 40 Recommendations say that countries should:
A. Not allow bearer shares and legal persons that are able to issue bearer shares.
B. Gather statistics on STRs; prosecutions and convictions; on property frozen, seized and
confiscated; and on mutual legal assistance, but not necessarily on other international requests
for cooperation.
C. Consider the feasibility of a system where banks and other financial institutions and
intermediaries would report currency transactions without indicating a minimum fixed amount.
D. Not approve the establishment or accept the continued operation of shell banks."✔✔D - Not
approve the establishment or accept the continued operation of shell banks.
"Which statement is true regarding the risk of Politically Exposed Persons (PEPs)?
A. PEPs provide access to third parties on whom the financial institution has not conducted
sufficient due diligence.
B. PEPs have significantly greater exposure to the politically corrupt funds, including accepting
bribes or misappropriating government funds.
C. PEPs are foreign customers who inherently present additional risk as they are engaged in
cross-border transactions.
D. PEPs generally do not pose enhanced risks to an institution due to their political standing;
rather, PEPs increase the prestige of an institution."✔✔B - PEPs have significantly greater
exposure to the politically corrupt funds, including accepting bribes or misappropriating
government funds.
"According to the FATF 40 Recommendations, "designated non-financial businesses and
professions" include:
A. Casinos, real estate agents and dealers in precious stones.
B. Money service businesses, gatekeepers, and issuers of electronic money.
Questions
and Answers 100% Correct
"Establishing compliance as a key responsibility for every employee of a financial institution is
best performed how?
A. By having senior management require compliance as a condition of employment.
B. By having auditors conduct testing on employee compliance.
C. By pointing out the regulatory consequences of noncompliance in training.
D. By having the AML officer personally tell associates of their responsibilities."✔✔A - By
having senior management require compliance as a condition of employment.
"What are the three key goals of an anti-money laundering program?
A. Prevent and detect money laundering and terrorist financing; report suspicious activity to
proper authorities if the laws or regulations require it; train all pertinent employees.
B. Satisfy regulatory requirements; report suspicious activity to proper authorities if the laws or
regulations require it; train all pertinent employees.
C. Train all pertinent employees if the laws require it; prevent money laundering; prevent
terrorist financing.
D. Reduce regulatory burdens; help the court systems in convicting money launderers; protect
the institution."✔✔A - Prevent and detect money laundering and terrorist financing; report
suspicious activity to proper authorities if the laws or regulations require it; train all pertinent
employees.
"The Reporting Officer of a financial institution should:
A. Report everything that comes his way from anyone in the organization.
B. Report everything that comes his way from senior management or Board of Directors.
,C. Review available information related to the customer, transactions, profile, history and file a
Suspicious Transaction Report for only those customers where a suspicion of money laundering
exists.
D. Report only what the Reporting Officer's superior agrees should be reported."✔✔C - Review
available information related to the customer, transactions, profile, history and file a Suspicious
Transaction Report for only those customers where a suspicion of money laundering exists.
"As part of their role in fighting money laundering, financial institutions should:
A. Designate a compliance officer.
B. Depend solely on The State's staff for combating money laundering.
C. Refuse small cash deposits under the reporting threshold.
D. Not open accounts for people from high risk jurisdictions."✔✔A - Designate a compliance
officer.
"International trade in goods and services can be used as either a cover for money laundering or
as the laundering mechanism itself. What is MOST important for the launderer when engaging in
this method? The ability:
A. To over- or under-invoice the goods.
B. To sell the exported goods for as much as possible.
C. To use goods that do not need to be declared.
D. To use high-value assets such as luxury cars or boats."✔✔A - To over- or under-invoice the
goods.
"Which of the following best describes the "alternative remittance system"?
A. The transfer of values between countries, outside of the legitimate banking system.
B. A non-electronic data remittance system used in several NCCT countries to report suspicious
activities.
,C. Old-fashioned reporting requirements commonly used in non-cooperative countries and
territories.
D. The transfer of funds between two or more financial institutions using concentration
accounts."✔✔A - The transfer of values between countries, outside of the legitimate banking
system.
"Which statement is true?
A. Bust-out schemes are popular in creating large bankruptcy frauds where businesses secure
increasing loans in excess of the actual value of the company or property and then run with the
money, leaving the lender to foreclose and take a substantial loss.
B. Cuckoo smurfing is a significant money laundering technique identified by the Financial
Action Task Force, where a form of structuring uses nested accounts with shell banks in secrecy
havens.
C. In its 40 Recommendations, the FATF issued a list of "designated categories of offense" that
asserts crimes for a money laundering prosecution.
D. E-cash is not attractive to the money launderer because it cannot be completely anonymous
and does not allow for large amounts to be "transported" quickly and easily."✔✔A - Bust-out
schemes are popular in creating large bankruptcy frauds where businesses secure increasing
loans in excess of the actual value of the company or property and then run with the money,
leaving the lender to foreclose and take a substantial loss.
"Which of the following should a national legislature consider when criminalizing money
laundering in line with the CFATF 19 Recommendations (choose three)?
A. Do not limit the number of specific predicate offenses for money laundering.
B. Criminalize conspiracy or association to engage in money laundering.
C. Indicate whether it is relevant that a predicate offense may have been committed outside the
local jurisdiction.
D. Avoid criminalizing money laundering offenses in which the offender lacks actual knowledge
of a criminal connection to funds."✔✔A, B, C -
A. Do not limit the number of specific predicate offenses for money laundering.
B. Criminalize conspiracy or association to engage in money laundering.
, C. Indicate whether it is relevant that a predicate offense may have been committed outside the
local jurisdiction.
"The FATF 40 Recommendations say that countries should:
A. Not allow bearer shares and legal persons that are able to issue bearer shares.
B. Gather statistics on STRs; prosecutions and convictions; on property frozen, seized and
confiscated; and on mutual legal assistance, but not necessarily on other international requests
for cooperation.
C. Consider the feasibility of a system where banks and other financial institutions and
intermediaries would report currency transactions without indicating a minimum fixed amount.
D. Not approve the establishment or accept the continued operation of shell banks."✔✔D - Not
approve the establishment or accept the continued operation of shell banks.
"Which statement is true regarding the risk of Politically Exposed Persons (PEPs)?
A. PEPs provide access to third parties on whom the financial institution has not conducted
sufficient due diligence.
B. PEPs have significantly greater exposure to the politically corrupt funds, including accepting
bribes or misappropriating government funds.
C. PEPs are foreign customers who inherently present additional risk as they are engaged in
cross-border transactions.
D. PEPs generally do not pose enhanced risks to an institution due to their political standing;
rather, PEPs increase the prestige of an institution."✔✔B - PEPs have significantly greater
exposure to the politically corrupt funds, including accepting bribes or misappropriating
government funds.
"According to the FATF 40 Recommendations, "designated non-financial businesses and
professions" include:
A. Casinos, real estate agents and dealers in precious stones.
B. Money service businesses, gatekeepers, and issuers of electronic money.
