ACAMS Certification Exam with
Guaranteed Accurate Answers
Describe the three phases of money laundering. - correct answer ✔✔• Placement is the physical
disposal of cash or other assets derived
from criminal activity.
• Layering is the separation of illicit proceeds from their source by
layers of financial transactions intended to conceal the origin of the
proceeds.
• Integration is supplying apparent legitimacy to illicit wealth
through the re‐entry of the funds into the economy in what appears
to be normal business or personal transactions.
What are the two main reasons correspondent
banking is vulnerable to money laundering? - correct answer ✔✔• By their nature, correspondent
banking relationships create a
situation in which a financial institution carries out financial
transactions on behalf of customers of another institution. This
indirect relationship means that the correspondent bank provides
services for individuals or entities for which it has neither verified
the identities nor obtained any first‐hand knowledge, and
• The amount of money that flows through correspondent accounts
can pose a significant threat to financial institutions, as they process
large volumes of transactions for their customers' customers. This
makes it more difficult to identify the suspect transactions, as the
financial institution generally does not have the information on the
actual parties conducting the transaction to know whether they are
unusual.
,Describe four types of risk associated with
money laundering faced by a financial institution. - correct answer ✔✔• Reputational risk is described as
the potential that adverse publicity
regarding an organization's business practices and associations, whether
accurate or not, will cause a loss of public confidence in the integrity of the
organization.
• Operational risk is described as the potential for loss resulting from
inadequate internal processes, personnel or systems or from external
events.
• Legal risk is the potential for lawsuits, adverse judgments, unenforceable
contracts, fines and penalties generating losses, increased expenses for an
organization, or even the closure
of the organization.
• Concentration risk is the potential for loss resulting from
too much credit or loan exposure to one borrower or
group of borrowers.
Identify and describe the three sections of the USA Patriot
Act concerning due diligence U.S. financial institutions need
to perform for relationships with foreign correspondent
banking customers. - correct answer ✔✔Section 312 requires institutions must set up risk based due
diligence to mitigate the money laundering risks posed by foreign
financial institutions.
Section 313, which prohibits U.S. financial institutions from opening
or maintaining correspondent accounts for foreign shell banks and
requires them to take "reasonable steps" to ensure that a
correspondent account of a foreign bank is not being used indirectly
to provide banking services to a shell bank.
,Section 319, which requires U.S. financial institutions to maintain
records with the names and address of the owners of foreign banks
for which they maintain correspondent accounts.
What are the economic effects of money laundering? - correct answer ✔✔• Loss of control of, or
mistakes in, decisions regarding economic
policy,
• Economic distortion and instability,
• Loss of tax revenue,
• Risks to privatization efforts,
• Reputation risk for the country, and
• Social costs.
What is a concentration account? - correct answer ✔✔Concentration accounts are internal accounts
established to
facilitate the processing and settlement of multiple or individual
customer transactions within the bank, usually on the same day.
These accounts are also known as special‐use, omnibus, settlement,
suspense, intraday, sweep or collection accounts. Concentration
accounts are frequently used to facilitate transactions for private
banking, trust and custody accounts, funds transfers and
international affiliates.
What is one of the most important aspects of
due diligence for a bank when establishing a
relationship with a money remitter? - correct answer ✔✔Ensuring the money remitter is properly
licensed.
What factors may contribute to the vulnerabilities of private
banking with regard to money laundering? - correct answer ✔✔• Perceived high profitability,
, • Intense competition,
• Powerful clientele,
• The high level of confidentiality associated with private banking,
• The close relationship of trust developed between relationship
managers and their clients,
• Commission‐based compensation for relationship managers,
• A culture of secrecy and discretion developed by the relationship
managers for their clients, and
• The relationship managers becoming client advocates to protect their
clients.
How can the free‐look period be used to launder money? - correct answer ✔✔A free‐look period is a
feature that allows investors, for a short
period of time after the policy is signed and the premium paid, to
back out of a policy without penalty. This process allows the money
launderer to get an insurance check, which represents cleaned
funds. However, as more insurance companies are subject to AML
program requirements, this type of money laundering is more
readily detected and reported.
Describe microstructuring. - correct answer ✔✔Designing a transaction to evade triggering a reporting
or
recordkeeping requirement is called "structuring."
Microstructuring is essentially the same as structuring, except that
it is done at a much smaller level. Instead of taking $18,000 and
breaking it into two deposits, the microstructurer might break it
into 20 deposits of approximately $900 each. This level of
structuring makes it extremely difficult to detect.
Guaranteed Accurate Answers
Describe the three phases of money laundering. - correct answer ✔✔• Placement is the physical
disposal of cash or other assets derived
from criminal activity.
• Layering is the separation of illicit proceeds from their source by
layers of financial transactions intended to conceal the origin of the
proceeds.
• Integration is supplying apparent legitimacy to illicit wealth
through the re‐entry of the funds into the economy in what appears
to be normal business or personal transactions.
What are the two main reasons correspondent
banking is vulnerable to money laundering? - correct answer ✔✔• By their nature, correspondent
banking relationships create a
situation in which a financial institution carries out financial
transactions on behalf of customers of another institution. This
indirect relationship means that the correspondent bank provides
services for individuals or entities for which it has neither verified
the identities nor obtained any first‐hand knowledge, and
• The amount of money that flows through correspondent accounts
can pose a significant threat to financial institutions, as they process
large volumes of transactions for their customers' customers. This
makes it more difficult to identify the suspect transactions, as the
financial institution generally does not have the information on the
actual parties conducting the transaction to know whether they are
unusual.
,Describe four types of risk associated with
money laundering faced by a financial institution. - correct answer ✔✔• Reputational risk is described as
the potential that adverse publicity
regarding an organization's business practices and associations, whether
accurate or not, will cause a loss of public confidence in the integrity of the
organization.
• Operational risk is described as the potential for loss resulting from
inadequate internal processes, personnel or systems or from external
events.
• Legal risk is the potential for lawsuits, adverse judgments, unenforceable
contracts, fines and penalties generating losses, increased expenses for an
organization, or even the closure
of the organization.
• Concentration risk is the potential for loss resulting from
too much credit or loan exposure to one borrower or
group of borrowers.
Identify and describe the three sections of the USA Patriot
Act concerning due diligence U.S. financial institutions need
to perform for relationships with foreign correspondent
banking customers. - correct answer ✔✔Section 312 requires institutions must set up risk based due
diligence to mitigate the money laundering risks posed by foreign
financial institutions.
Section 313, which prohibits U.S. financial institutions from opening
or maintaining correspondent accounts for foreign shell banks and
requires them to take "reasonable steps" to ensure that a
correspondent account of a foreign bank is not being used indirectly
to provide banking services to a shell bank.
,Section 319, which requires U.S. financial institutions to maintain
records with the names and address of the owners of foreign banks
for which they maintain correspondent accounts.
What are the economic effects of money laundering? - correct answer ✔✔• Loss of control of, or
mistakes in, decisions regarding economic
policy,
• Economic distortion and instability,
• Loss of tax revenue,
• Risks to privatization efforts,
• Reputation risk for the country, and
• Social costs.
What is a concentration account? - correct answer ✔✔Concentration accounts are internal accounts
established to
facilitate the processing and settlement of multiple or individual
customer transactions within the bank, usually on the same day.
These accounts are also known as special‐use, omnibus, settlement,
suspense, intraday, sweep or collection accounts. Concentration
accounts are frequently used to facilitate transactions for private
banking, trust and custody accounts, funds transfers and
international affiliates.
What is one of the most important aspects of
due diligence for a bank when establishing a
relationship with a money remitter? - correct answer ✔✔Ensuring the money remitter is properly
licensed.
What factors may contribute to the vulnerabilities of private
banking with regard to money laundering? - correct answer ✔✔• Perceived high profitability,
, • Intense competition,
• Powerful clientele,
• The high level of confidentiality associated with private banking,
• The close relationship of trust developed between relationship
managers and their clients,
• Commission‐based compensation for relationship managers,
• A culture of secrecy and discretion developed by the relationship
managers for their clients, and
• The relationship managers becoming client advocates to protect their
clients.
How can the free‐look period be used to launder money? - correct answer ✔✔A free‐look period is a
feature that allows investors, for a short
period of time after the policy is signed and the premium paid, to
back out of a policy without penalty. This process allows the money
launderer to get an insurance check, which represents cleaned
funds. However, as more insurance companies are subject to AML
program requirements, this type of money laundering is more
readily detected and reported.
Describe microstructuring. - correct answer ✔✔Designing a transaction to evade triggering a reporting
or
recordkeeping requirement is called "structuring."
Microstructuring is essentially the same as structuring, except that
it is done at a much smaller level. Instead of taking $18,000 and
breaking it into two deposits, the microstructurer might break it
into 20 deposits of approximately $900 each. This level of
structuring makes it extremely difficult to detect.
