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Question#1

Which principle about safeguarding privacy and data should an auditor adhere to when performing an AML investigation?

A. AML and Data Protection Privacy laws should not be mutually exclusive.

B. During evidence gathering, privacy laws are less important than local AML laws.

C. Terrorist financing is more relevant in the context of data protection and supersedes laws.

D. Countries should clarify where AML and Data Protection Privacy laws are not balanced.

Question#2

Which of the following is a key consideration for a global organization when managing AFC and sanctions compliance across multiple jurisdictions?

A. Ensuring sanctions compliance by relying solely on international bodies like the UN because there is no requirement to adhere to local laws

B. Ensuring group policies and procedures prioritize adherence to US regulations because they are the most influential worldwide

C. Applying global AFC and sanctions policies to ensure consistency without the need to adapt to local regulations

D. Ensuring group policies cater to compliance with each country's specific AML and sanctions regulations

Explanation:
Global organizations must ensure their policies and procedures comply with local laws and regulations in each country where they operate, even when maintaining group-wide consistency. Relying solely on international or U.S. standards does not ensure compliance with all local requirements, which may be more stringent or specific.
“A global group-wide program should ensure adherence to local AML and sanctions laws and regulations in every jurisdiction in which it operates. Local adaptation of policies is essential to address jurisdiction-specific risks and legal requirements.”
(CAMS 6th Edition, International AML/CFT Standards; FATF Recommendations 18, 35; EU & US Sanctions Regulations)
Reference: CAMS 6th Edition, Compliance Across Jurisdictions
FATF Recommendation 18: Internal Controls and Foreign Branches
Basel Committee on Banking Supervision (BCBS) Guidance

Question#3

Which money laundering risks are posed by the misuse of trust and asset management services? (Select Three.)

A. Concealing sources of funds

B. Allowing for third-party custody safekeeping of funds

C. Adding a layer of anonymity to transactions

D. Concealing true legal and beneficial owners

E. Establishing escrow accounts for real estate transactions

Explanation:
A, C, D: “Trust and asset management services can facilitate the concealment of the source of funds (A), provide a layer of anonymity to transactions (C), and obscure the true legal and beneficial owners (D). These are well-established ML/TF risks in the private wealth sector.” (CAMS 6th Edition, ML/TF Risks in Trust and Asset Management)
B and E are normal aspects of asset management and are not in themselves ML/TF risks unless combined with other suspicious behaviors.
Reference: CAMS 6th Edition, Risks in Trust and Asset Management
FATF Recommendations 24, 25

Question#4

What areas of laws and regulations have the greatest impact on AML/CFT applications? (Choose three.)

A. Information security, data privacy, and cybersecurity

B. Foreign exchange control, and precious gemstone and metal dealing

C. Ombudsman and anti-competition authority

D. Electronic contract and biological signature acceptance

E. Consumer protection, financial inclusion, and environmental, social and governance

Explanation:
AML/CFT (Anti-Money Laundering/Countering the Financing of Terrorism) applications are heavily influenced by various laws and regulations.
The most impactful areas include:
Information security, data privacy, and cybersecurity C AML/CFT compliance relies on collecting and analyzing financial data. Data protection laws (e.g., GDPR) impact how financial institutions store, share, and protect sensitive customer information while ensuring that AML measures remain effective.
Foreign exchange control, and precious gemstone and metal dealing C Criminals often launder money through foreign currency transactions, gold, diamonds, and other high-value assets. Regulations governing these sectors help prevent financial crime.
Consumer protection, financial inclusion, and ESG C AML/CFT frameworks must balance risk mitigation with ensuring access to financial services (financial inclusion). Additionally, ESG policies play a growing role in identifying illicit financial.

Question#5

The compliance officer at a casino in Taiwan discovers that the casino received multiple cash deposits from a customer just below the Large-Amount Transaction Report (LTR) limit on consecutive days. The customer used three different betting accounts.
What is the appropriate next step?

A. Make a note in the customer's account that the customer's gambling activities are frequently conducted below the reporting limit

B. Follow internal reporting procedures to escalate the activity as suspicious and report to appropriate authorities

C. Inform the customer their activity Is suspicious and request an explanation

D. Contact law enforcement to launch an Investigation into the customer's financial activities

CAMS Online Practice Questions

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