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NEW QUESTION # 17
A financial institution (Fl) banks a money transmitter business (MTB) located in Miami. The MTB regularly initiates wire transfers with the ultimate beneficiary in Cuba and legally sells travel packages to Cuba. The wire transfers for money remittances comply with the country's economic sanctions policies. A Fl investigator on the sanctions team reviews each wire transfer to ensure compliance with sanctions and to monitor transfer details.
An airline located in Cuba, unrelated to the business, legally sells airline tickets in Cuba to Cuban citizens wanting to travel outside of Cuba. The airline tickets are purchased using Cuban currency (CUC).
The MTB wants 100,000 USD worth of CUC. Purchasing CUC from a Cuban bank includes a 4% fee. The MTB contacts the airline to ask if the airline will trade its CUC for USD at a lower exchange fee than the Cuban bank. The airline agrees to a 1% fee. The MTB initiates a wire transfer to the airline which appears as normal activity in the monitoring system because of the business' travel package sales.
Which investigative actions should the investigator take concerning the 100.000 USD wire transfer? (Select Three.)
- A. Recommend a plan for the Fl's management to restrict the account relationship.
- B. Review regulations applicable to foreign currency trading transactions.
- C. Gather all account activity for Fl clients that purchased packages from the airline.
- D. Locate and review licenses, registrations, and account operating agreements associated with the MTB account.
- E. Review a sampling of wire transfers initiated by travel companies with Cuba travel packages.
- F. Review the wire transfer protocols for this customer.
Answer: B,D,F
Explanation:
Explanation
The investigator should take the following investigative actions concerning the 100,000 USD wire transfer:
Review the wire transfer protocols for this customer. This will help the investigator to determine if the wire transfer is consistent with the customer's normal business activity and risk profile, or if it deviates from the established patterns or thresholds.
Review regulations applicable to foreign currency trading transactions. This will help the investigator to assess if the wire transfer violates any laws or regulations related to currency exchange, such as reporting requirements, licensing requirements, or sanctions compliance.
Locate and review licenses, registrations, and account operating agreements associated with the MTB account. This will help the investigator to verify if the MTB has the necessary authorization and documentation to conduct currency exchange transactions and if it has disclosed this activity to the FI.
References: Advanced CAMS-FCI Study Guide, pages 32-33.
NEW QUESTION # 18
According to the Financial Action Task Force, as part of their risk assessment, which are important data and information that a Trust and Company Service Provider must understand when establishing and administering a trust? (Select Two.)
- A. The general nature of business of the trust
- B. The source of funds in the structure
- C. The responsibility and authority in the structure
- D. The general purpose behind the structure
- E. The management structure of the trust
Answer: C,D
Explanation:
Explanation
Here is the exact information from the Financial Action Task Force (FATF) Guidance for a Risk-Based Approach for Trust and Company Service Providers:
"Understanding the management and ownership structure of a trust is crucial in assessing the ML/TF risk it poses. This includes the identity of all settlors, trustees and beneficiaries, and their respective roles and responsibilities, as well as the nature and purpose of the trust."
"TCSPs should obtain and maintain up-to-date information on the purpose and intended nature of the business relationship, the source of funds and wealth, and where relevant, the source of funds or wealth of the settlor and beneficiaries." Based on this information, the correct answers are A and D. Trust and Company Service Providers must understand the responsibility and authority in the structure, as well as the general purpose behind the structure in order to assess the overall risk of the trust and ensure that any transactions with the trust are legitimate.
NEW QUESTION # 19
A financial institution (Fl) banks a money transmitter business (MTB) located in Miami. The MTB regularly initiates wire transfers with the ultimate beneficiary in Cuba and legally sells travel packages to Cuba. The wire transfers for money remittances comply with the country's economic sanctions policies. A Fl investigator on the sanctions team reviews each wire transfer to ensure compliance with sanctions and to monitor transfer details.
An airline located in Cuba, unrelated to the business, legally sells airline tickets in Cuba to Cuban citizens wanting to travel outside of Cuba. The airline tickets are purchased using Cuban currency (CUC).
The MTB wants 100,000 USD worth of CUC. Purchasing CUC from a Cuban bank includes a 4% fee. The MTB contacts the airline to ask if the airline will trade its CUC for USD at a lower exchange fee than the Cuban bank. The airline agrees to a 1% fee. The MTB initiates a wire transfer to the airline which appears as normal activity in the monitoring system because of the business' travel package sales.
The investigator recommends that a SAR/STR be filed. What documentation should be referenced in the SAR/STR filing? (Select Three.)
- A. Cumulative dollar amount for transactions listing for all the MTB account's wire activity regarding travel packages
- B. Cumulative dollar amount of the wire transfer activity
- C. All documents related to the agreement between the airline and the MTB
- D. Airline's ticket sales and passenger list
- E. Licensing information regarding the travel agency providing tourist sales to Cuba
- F. Account documentation on all related accounts maintained by the MTB
Answer: B
Explanation:
Explanation
The most likely reason for conducting a reverse transaction is to conceal or launder illicit funds. A reverse transaction is a transaction that reverses a previous transaction, such as a refund, a chargeback, or a cancellation. Reverse transactions can be used by money launderers to obscure the source, ownership, or destination of funds, or to create false records or invoices. For example, a money launderer may initiate a wire transfer from a high-risk jurisdiction to a low-risk jurisdiction, and then reverse the transaction after receiving confirmation of the funds. This way, the money launderer can create a paper trail that shows legitimate funds coming from a low-risk jurisdiction, while hiding the true origin of the funds.
References: Advanced CAMS-FCI Study Guide, page 40-41.
NEW QUESTION # 20
Which actions should financial institutions perform to ensure proper data governance? (Select Three.)
- A. Review significant discrepancies between the values of the product reported on the invoice and the fair market value.
- B. Ensure the accuracy of customer identification records and transaction records and appropriately manage data as a prerequisite for the effective use of IT systems.
- C. Establish an appropriate data management method for collecting and storing information.
- D. Evaluate the nature of foreign remittance under a risk-based structure of AML/CFT and take necessary measures in accordance with the risk-based approach.
- E. Periodically validate integrity and accuracy of information used for IT systems such as customer information, customer identification records, and transaction records.
- F. For customers who are determined to be at high risk, review their risk rating and apply risk mitigation measures as appropriate.
Answer: B,C,E
Explanation:
Explanation
Financial institutions should perform the following actions to ensure proper data governance:
Establish an appropriate data management method for collecting and storing information. This is important to ensure that the data is consistent, reliable, and accessible for various purposes, such as risk assessment, compliance reporting, and customer service. Data management methods may include defining data standards, policies, and procedures; implementing data quality controls and validation checks; and using appropriate data storage systems and formats.
Ensure the accuracy of customer identification records and transaction records and appropriately manage data as a prerequisite for the effective use of IT systems. This is important to comply with the anti-money laundering and counter-terrorist financing (AML/CFT) requirements, such as customer due diligence, transaction monitoring, and suspicious activity reporting. Accurate and complete customer and transaction data also enables financial institutions to use IT systems more effectively for data analysis, risk management, and decision making.
Periodically validate integrity and accuracy of information used for IT systems such as customer information, customer identification records, and transaction records. This is important to ensure that the data remains up-to-date, relevant, and reliable over time. Data validation may include verifying the source and quality of the data; identifying and correcting any errors or inconsistencies; and updating or deleting any obsolete or redundant data.
References:
Data Governance for Financial Institutions - Capgemini
Small and Medium-Sized Deposit-Taking Institutions (SMSBs) Capital and Liquidity Requirements - OSFI
NEW QUESTION # 21
How does the Asian/Pacific Financial Action Task Force <FATF>-Style Regional Body help its members implement recommendations from the FATF? (Select Two.)
- A. Endorses regulations that define money laundering based on the model laws issued by the respective member states
- B. Requires members to maintain lists of regional money laundering and terrorists financing issues relevant to their region
- C. Facilitates the adoption and implementation of internationally accepted AMI measures by member jurisdictions
- D. Promotes laws that allow judicial challenges to seizure orders by an administrative body
- E. Encourages cooperative AML efforts in the region
Answer: C,E
Explanation:
Explanation
The Asian/Pacific Financial Action Task Force-Style Regional Body (APG) helps its members implement recommendations from the FATF by facilitating the adoption and implementation of internationally accepted AML measures by member jurisdictions (CAMS Manual, 6th Edition, Page 22). The APG also encourages cooperative AML efforts in the region, which can include information-sharing and mutual evaluations to assess member compliance with FATF recommendations (CAMS Manual, 6th Edition, Page 25). Therefore, options C and D are the correct answers.
NEW QUESTION # 22
An investigator at a corporate bank is conducting transaction monitoring alerts clearance.
KYC profile background: An entity customer, doing business offshore in Hong Kong, established a banking business relationship with the bank in 2017 for deposit and loan purposes. It acts as an offshore investment holding company. The customer declared that the ongoing source of funds to this account comes from group-related companies.
* X is the UBO. and owns 97% shares of this entity customer;
* Y is the authorized signatory of this entity customer. This entity customer was previously the subject of a SAR/STR.
KYC PROFILE
Customer Name: AAA International Company. Ltd
Customer ID: 123456
Account Opened: June 2017
Last KYC review date: 15 Nov 2020
Country and Year of Incorporation: The British Virgin Islands, May 2017 AML risk level: High Account opening and purpose: Deposits, Loans and Trade Finance Anticipated account activities: 1 to 5 transactions per year and around 1 million per transaction amount During the investigation, the investigator reviewed remittance transactions activities for the period from Jul
2019 to Sep 2021 and noted the following transactions pattern:
TRANSACTION JOURNAL
Review dates: from July 2019 to Sept 2021
For Hong Kong Dollars (HKD) currency:
Incoming transactions: 2 inward remittances of around 1.88 million HKD in total from different third parties Outgoing transactions: 24 outward remittances of around 9 4 million HKD in total to different third parties For United States Dollars (USD) currency:
Incoming transactions: 13 inward remittances of around 3.3 million USD in total from different third parties Outgoing transactions: 10 outward remittances of around 9.4 million USD in total to different third parties.
RFI Information and Supporting documents:
According to the RFI reply received on 26 May 2021, the customer provided the bank with the information below:
1) All incoming funds received in HKD & USD currencies were monies lent from non-customers of the bank.
Copies of loan agreements had been provided as supporting documents. All of the loan agreements were in the same format and all the lenders are engaged in trading business.
2) Some loan agreements were signed among four parties, including among lenders. borrower (the bank's customer), guarantor, and guardian with supplemental agreements, which stated that the customer, as a borrower, who failed to repay the loan Based on the KYC profile and the transaction journal, the pattern of activity shows a deviation in:
- A. product risk rating.
- B. expected vs. actual activity.
- C. customer risk rating
- D. U.S. currency incoming vs. outgoing transaction rales.
Answer: B
Explanation:
Explanation
The correct answer is A because the expected account activities were 1 to 5 transactions per year and around 1 million per transaction amount, but the actual activity showed much more frequent and varied transactions in different currencies and amounts. This indicates a deviation from the customer's profile and risk level.
References: Advanced CAMS-FCI Study Guide, page 16
NEW QUESTION # 23
During transaction monitoring. Bank A learns that one of its customers. Med Supplies 123, is attempting to make a payment via wire totaling 382.500 USD to PPE Business LLC located in Mexico to purchase a large order of personal protective equipment. specifically surgical masks and face shields. Upon further verification.
Bank A decides to escalate and refers the case to investigators.
Bank A notes that days prior to the above transaction, the same customer went to a Bank A location to wire
1,215,280 USD to Breath Well LTD located in Singapore. Breath Well was acting as an intermediary to purchase both 3-ply surgical masks and face shields from China. Bank A decided not to complete the transaction due to concerns with the involved supplier in China. Moreover, the customer is attempting to send a third wire in the amount of 350,000 USD for the purchase of these items, this time using a different vendor in China. The investigator must determine the next steps in the investigation and what actions, if any. should be taken against relevant parties.
The investigator is gathering more information to determine if a SAR/STR filing is needed. Which steps are the correct ways of collecting the additional information? (Select Two.)
- A. Conduct open-source research to determine if the customer and involved counterparties are in the same business field.
- B. Reach out to the relationship manager asking if more up-to-date customer due diligence information can be collected on the customer.
- C. Use available documentation received from law enforcement (e.g.. grand jury subpoena) as red flags in SAR/STR filing.
- D. Issue a USA PATRIOT ACT Section 314(b) request to participating financial institutions advising that information is needed to decide if the activity is suspicious.
- E. Reach out to the customer and ask for supporting documentation for the conducted wires to avoid SAR/STR filing.
Answer: A,B
Explanation:
Explanation
The correct answer is A and C because these indicators suggest that the customer is using fraudulent documents and misrepresenting the goods to conceal the illicit nature of the transactions. Fentanyl traffickers often use front companies and falsified invoices to disguise their shipments as legitimate products, such as medical supplies or chemicals. Reviewing the invoices and transportation documents, as well as the FDA product certifications, can help to identify discrepancies or anomalies that indicate fraud or deception.
References: Fentanyl and Fentanyl Analogues: Federal Trends and Trafficking Patterns, page 18; Fentanyl Trafficking Offenses, page 2.
NEW QUESTION # 24
Which main vulnerability has led to an increase in the ransomware attacks perpetuated on small businesses?
- A. Inability to recover the encrypted information
- B. Ability to pay larger ransoms
- C. Weaker cybersecurity controls
- D. Tendency not to contact law enforcement
Answer: C
Explanation:
Explanation
Weaker cybersecurity controls are a main vulnerability that has led to an increase in ransomware attacks on small businesses, as they make them easier targets for cybercriminals who can exploit their systems and demand payment for restoring access to their data. The other options are not relevant to the vulnerability, as they relate to the consequences or responses of the victims.
NEW QUESTION # 25
An investigator receives an alert documenting a series of transactions. A limited liability corporation (LLC) wired 59.000.000 USD to an overseas account associated with a state-run oil company. A second account associated with the state-run oil company wired 600,000,000 USD to the LLC. The LLC then wired money to other accounts, a money brokerage firm, and real estate purchases.
The investigator initiated an enhanced KYC investigation on the LLC. The financial institution opened the LLC account a couple weeks prior to the series of transactions. The names associated with the LLC had changed multiple times since the account opened. A search of those names revealed relations with multiple LLCs. Public records about the LLCs did not show any identifiable business activities.
Open-source research identified mixed reports about the brokerage firm. The firm indicated it purchased mutual funds for its clients and dispensed returns to clients. Media reports claimed the firm laundered money by holding money for a fee before returning it to investors.
What is the total suspicious transaction amount that the investigator should report?
- A. 659,000,000 USD
- B. 59,000,000 USD
- C. 600,000,000 USD
- D. 541.000,000 USD
Answer: A
Explanation:
Explanation
The total suspicious transaction amount that the investigator should report is 659,000,000 USD. This is the sum of the two transactions involving the LLC and the state-run oil company, which are 59,000,000 USD and
600,000,000 USD respectively. The other transactions that the LLC made to other accounts, a money brokerage firm, and real estate purchases are not relevant to the question, as they are not part of the series of transactions that triggered the alert.
References: Advanced CAMS-FCI Certification | ACAMS
NEW QUESTION # 26
Which pattern of activity most strongly indicates an individual is a foreign terrorist fighter?
- A. A large purchase at a gas station immediately followed by several smaller purchases at an electronics store
- B. A series of small deposits followed by a large international wire to a well-known international charity
- C. A large cash advance on a credit card and purchases at travel and sporting goods websites
- D. A series of small cash deposits made in rapid succession totaling just over 10,000 USD followed by a purchase at a jewelry store
Answer: C
Explanation:
Explanation
The pattern of activity that most strongly indicates an individual is a foreign terrorist fighter is a large cash advance on a credit card and purchases at travel and sporting goods websites. This is because this pattern may suggest that the individual is preparing to travel to a conflict zone and purchase equipment or supplies for terrorist activities. According to the United Nations Office on Drugs and Crime, some of the indicators of foreign terrorist fighters include1:
Sudden or increased financial activity, such as cash withdrawals, transfers, or deposits, especially in large amounts or involving foreign currency or locations.
Purchases of travel-related items, such as airline tickets, passports, visas, luggage, or clothing, especially to or from high-risk destinations or transit hubs.
Purchases of items that could be used for terrorist purposes, such as weapons, explosives, chemicals, communication devices, or survival gear.
Changes in behavior, such as expressing radical views, cutting ties with family or friends, joining extremist groups, or displaying signs of emotional distress.
References:
Foreign Terrorist Fighters - United Nations Office on Drugs and Crime
NEW QUESTION # 27
An investigator at a corporate bank is conducting transaction monitoring alerts clearance.
KYC profile background: An entity customer, doing business offshore in Hong Kong, established a banking business relationship with the bank since 2017 for deposit and loan purposes. It acts as an offshore investment holding company. The customer declared that the ongoing source of funds to this account comes from group-related companies.
* X is the UBO. and owns 97% shares of this entity customer;
* Y is is the authorized signatory of this entity customer. This entity customer was previously the subject of a SAR/STR.
KYC PROFILE
Customer Name: AAA International Company. Ltd
Customer ID: 123456
Account Opened: June 2017
Last KYC review date: 15 Nov 2020
Country and Year of Incorporation: The British Virgin Islands, May 2017 AML risk level: High Account opening and purpose: Deposits, Loans and Trade Finance Anticipated account activities: 1 to 5 transactions per year and around 1 million per transaction amount During the investigation, the investigator reviewed remittance transactions activities for the period from Jul
2019 to Sep 2021 and noted the following transactions pattern:
TRANSACTION JOURNAL
Review dates: from July 2019 to Sept 2021
For Hong Kong Dollars (HKD) currency:
Incoming transactions: 2 inward remittances of around 1.88 million HKD in total from different third parties Outgoing transactions: 24 outward remittances of around 9 4 million HKD in total to different third parties For United States Dollars (USD) currency:
Incoming transactions: 13 inward remittances of around 3.3 million USD in total from different third parties Outgoing transactions: 10 outward remittances of around 9.4 million USD in total to different third parties.
RFI Information and Supporting documents:
According to the RFI reply received on 26 May 2021, the customer provided the bank with the information below:
1) All incoming funds received in HKD & USD currencies were monies lent from non-customers of the bank.
Copies of loan agreements had been provided as supporting documents. All of the loan agreements were in the same format and all the lenders are engaged in trading business.
2) Some loan agreements were signed among four parties, including among lenders. borrower (the bank's customer), guarantor, and guardian with supplemental agreements, which stated that the customer, as a borrower, who failed to repay the loan After reviewing the transaction journal, request for information response, and supporting documentation, the investigator determines that additional information is needed. Which additional information should the investigator request?
- A. Formation document/description of the group-related companies
- B. Previously filed SARVSTR unrelated to the customer, but similar in content
- C. Source of the incoming funds to the group-related companies
- D. Adverse news screening on all names listed in the formation documents
Answer: C
Explanation:
Explanation
The additional information that the investigator should request is the source of the incoming funds to the group-related companies. This is because the customer declared that the ongoing source of funds to this account comes from group-related companies, but the transaction journal shows that the customer received funds from different third parties, not from group-related companies. Therefore, the investigator should verify the relationship and legitimacy of these third parties and their funds with the customer and the group-related companies. The other options are not relevant or necessary for this investigation.
References: Advanced CAMS-FCI Certification | ACAMS
NEW QUESTION # 28
A retail bank prepares a yearly AML risk assessment. Which inherent risk factor is likely the most relevant?
- A. The provision of brokerage services
- B. The provision of cash services
- C. The provision of remote check deposit services
- D. The provision of payable through accounts
Answer: B
Explanation:
Explanation
Retail banks typically have a high inherent risk of money laundering due to their provision of cash services.
This is because cash is a preferred medium of exchange for criminals and terrorists, and retail banks provide a convenient way for them to move large sums of money without detection. Retail banks are also vulnerable to money laundering through the use of false identities and other deceptive practices. (CAMS Manual, 6th Edition, Page 8).
NEW QUESTION # 29
Potential indicators of money laundering associated with Trust and Company Service Providers include:
(Select Two.)
- A. multi-jurisdictional wire transfers with no legal purpose.
- B. structuring cash deposits into third party accounts.
- C. generation of rental income to legitimize illicit funds.
- D. frequent deposits to or withdrawals from bank accounts.
- E. use of legal persons in jurisdictions with strict secrecy laws.
Answer: A,E
Explanation:
Explanation
This is stated in the Certified Anti-Money Laundering Specialist (the 6th edition) manual on page 595, which states: "Potential indicators of money laundering associated with Trust and Company Service Providers include the use of legal persons in jurisdictions with strict secrecy laws, structuring cash deposits into third party accounts, multi-jurisdictional wire transfers with no legal purpose, and frequent deposits to or withdrawals from bank accounts."
NEW QUESTION # 30
A client with many personal and business deposits with the financial institution (Fl) seeks a business loan. The client wants to guarantee the loan with a trust for which they are the beneficiary.
An investigator examines the trust. The trust has many layers, including shell companies in known tax havens.
The client's ultimate beneficial ownership claim cannot be validated, and the loan is denied.
Two months later, the Fl receives a law enforcement (LE) request on one of the client's business accounts.
While reviewing the business account, the Fl receives another LE request on the same account from another agency. The requested information is shared.
Three months later, a branch manager receives a request to open a business deposit account related to a complex trust. The manager forwarded the request because of the complexity. The trust was the same as the previously examined trust, but the request came from a different client. The second client also has many accounts with the Fl. Further inspection finds links between the second client and the Paradise Papers. The Papers state the client led illegal activities and committed tax evasion.
What steps should the investigator perform in reference to the first client's existing accounts? (Select Three.)
- A. Prepare a relationship flow chart of all existing accounts to better understand the client's activities.
- B. Review Fl approved policies regarding the existing accounts to ensure regulatory requirements were followed.
- C. File SARs/STRs for all accounts at the beginning of the discovery phase and amend later as necessary.
- D. Inform Fl management of all processes used to investigate the client due to LE inquiry.
- E. Review all client-signed documents relating to all accounts.
- F. Perform secondary scans of the client's other owners/authorized signers
Answer: A,E,F
Explanation:
Explanation
The investigator should review all client-signed documents relating to all accounts (A) to check for any discrepancies or red flags. The investigator should also perform secondary scans of the client's other owners/authorized signers (D) to identify any possible connections or associations with the second client or the Paradise Papers. Additionally, the investigator should prepare a relationship flow chart of all existing accounts (F) to better understand the client's activities and patterns. These steps are consistent with the ACAMS Advanced Financial Crimes Investigations Certification Study Guide1, which states that investigators should
"review all relevant documentation, including account opening documents, transaction records, and customer correspondence" (p. 23), "conduct enhanced due diligence on all parties involved in the investigation" (p. 24), and "use data visualization tools to map out complex relationships and transactions" (p. 25).
References: 1: ACAMS Advanced Financial Crimes Investigations Certification Study Guide, available at ACAMS
NEW QUESTION # 31
Which payment method for purchasing luxury items is a red flag for potential money laundering?
- A. Personal loan
- B. Wire transfer
- C. Credit card
- D. Cash
Answer: D
Explanation:
Explanation
According to the Financial Action Task Force (FATF), the use of large amounts of cash is a common method for money launderers to move illicit funds [1]. Purchasing luxury items with cash can indicate an attempt to convert illegal funds into tangible assets that can be easily resold or moved across borders. As a result, businesses that deal with luxury items are required to implement enhanced due diligence measures, including monitoring transactions involving large amounts of cash [1].
NEW QUESTION # 32
Law enforcement agents arrive at a broker-dealer's premises with a search warrant. In addition to cooperation with the warrant, which instructions should the person in charge of the broker-dealer provide to their employees?
- A. Volunteer information not requested by the agents that the employees think may be useful.
- B. Take notes on the questions and comments made by the agents.
- C. Sign consent forms permitting the agents to search employees' offices.
- D. Provide agents with unlimited access to customers' personal data.
Answer: B
Explanation:
Explanation
The instruction that the person in charge of the broker-dealer should provide to their employees is to take notes on the questions and comments made by the agents (A). This is because taking notes can help the employees to recall and document what happened during the search warrant execution, which can be useful for legal or regulatory purposes. According to ACAMS3, "the FI should instruct its staff to cooperate with LE agents during a search warrant execution, but also to take notes of what is being searched, seized, or asked by the agents" (p. 35). The FI should also "keep copies of any documents or records that are taken by LE agents" (p.
35).
The other instructions are not correct. The person in charge of the broker-dealer should not instruct their employees to sign consent forms permitting the agents to search employees' offices (B), as this is unnecessary and potentially risky, as the agents already have a valid search warrant that authorizes them to search the premises. The person in charge of the broker-dealer should not instruct their employees to provide agents with unlimited access to customers' personal data , as this could violate privacy or data protection laws, as well as compromise customer trust and confidentiality. The person in charge of the broker-dealer should not instruct their employees to volunteer information not requested by the agents that they think may be useful (D), as this could interfere with the LE investigation or expose them to legal or regulatory risks.
References:
Introduction to Transnational Organized Crime
ACAMS Law Enforcement and Financial Crimes Investigations eLearning Course Module Law Enforcement Requests and Actions
NEW QUESTION # 33
An investigator at a corporate bank is conducting transaction monitoring alerts clearance.
KYC profile background: An entity customer, doing business offshore in Hong Kong, established a banking business relationship with the bank in 2017 for deposit and loan purposes. It acts as an offshore investment holding company. The customer declared that the ongoing source of funds to this account comes from group-related companies.
* X is the UBO. and owns 97% shares of this entity customer;
* Y is the authorized signatory of this entity customer. This entity customer was previously the subject of a SAR/STR.
KYC PROFILE
Customer Name: AAA International Company. Ltd
Customer ID: 123456
Account Opened: June 2017
Last KYC review date: 15 Nov 2020
Country and Year of Incorporation: The British Virgin Islands, May 2017 AML risk level: High Account opening and purpose: Deposits, Loans, and Trade Finance Anticipated account activities: 1 to 5 transactions per year and around 1 million per transaction amount During the investigation, the investigator reviewed remittance transactions activities for the period from Jul
2019 to Sep 2021 and noted the following transactions pattern:
TRANSACTION JOURNAL
Review dates: from July 2019 to Sept 2021
For Hong Kong Dollars (HKD) currency:
Incoming transactions: 2 inward remittances of around 1.88 million HKD in total from different third parties Outgoing transactions: 24 outward remittances of around 9 4 million HKD in total to different third parties For United States Dollars (USD) currency:
Incoming transactions: 13 inward remittances of around 3.3 million USD in total from different third parties Outgoing transactions: 10 outward remittances of around 9.4 million USD in total to different third parties.
RFI Information and Supporting documents:
According to the RFI reply received on 26 May 2021, the customer provided the bank with the information below:
1J All incoming funds received in HKD & USD currencies were monies lent from non-customers of the bank.
Copies of loan agreements had been provided as supporting documents. All of the loan agreements were in the same format and all the lenders are engaged in trading business.
2) Some loan agreements were signed among four parties, including among lenders. borrower (the bank's customer), guarantor, and guardian with supplemental agreements, which stated that the customer, as a borrower, who failed to repay the loan Which additional information would support escalating this account for closure?
- A. A review of outward remittances reveals the same pattern of several simple steps for each transaction,
- B. The bank files SARs/STRs indicating that Y opened accounts for small companies located in close proximity to the bank.
- C. A follow-up request reveals that the account receives funds from loans, collects payments from group-related companies, and sends the payments to the lenders.
- D. A review of X's personal bank account shows that X received wire transfers that aggregate the amounts transferred to the group-related companies.
Answer: A
Explanation:
Explanation
A review of outward remittances reveals the same pattern of several simple steps for each transaction, which could indicate a layering scheme to obscure the origin and destination of the funds. This would support escalating this account for closure, as it is inconsistent with the customer's declared purpose and anticipated activities. The other options are not relevant or sufficient to warrant account closure.
References: Advanced CAMS-FCI Certification | ACAMS
NEW QUESTION # 34
A client that runs a non-profit organization that aids refugees in leaving their home countries received a remittance from a money services business that was ten times the average. The client was recently detained for providing falsified passports to illegal immigrants. Which predicate offenses could be considered in the SAR/STR? (Select Two.)
- A. Terrorist financing
- B. Tax evasion
- C. Human smuggling/trafficking
- D. Antiques smuggling
- E. Narcotics trafficking
Answer: A,C
Explanation:
Explanation
The correct answer is A and B because human smuggling/trafficking and terrorist financing are both predicate offenses for money laundering that could be related to the client's activities. Option C is incorrect because there is no indication of narcotics trafficking in the scenario. Option D is incorrect because there is no indication of antiques smuggling in the scenario. Option E is incorrect because there is no indication of tax evasion in the scenario.
References: Advanced CAMS-FCI Certification Handbook, page 10; Financial Crime Typologies - Intermediate Certificate, Module 2.
NEW QUESTION # 35
A new customer has just been onboarded in a securities firm. After a few weeks, there are unusual trading patterns that are being flagged. Which pattern is most concerning to the compliance officer?
- A. The customer engages in large trading in securities that are liquid or highly priced from the trading account.
- B. The customer accumulates securities of a low volume counter in small increments on a weekly basis.
- C. The customer's repeated trading in securities that are low priced and low volume counters.
- D. The customer receives many incoming wire transfers from related parties to the trading account.
Answer: B
Explanation:
Explanation
The most concerning trading pattern for a compliance officer when a new customer has been onboarded in a securities firm is the customer accumulating securities of a low volume counter in small increments on a weekly basis. This type of behavior could indicate that the customer is attempting to obscure their identity or the true purpose of their trading activity, which can be indicative of money laundering or other suspicious activity. (CAMS Manual, 6th Edition, Page 170).
NEW QUESTION # 36
Why is a more robust supervisory approach needed by regulators when overseeing small- and medium-sized money service businesses (MSBs) compared to larger MSBs for combatting terrorist financing (TF)?
- A. Small- and medium-sized MSBs are more at risk of allowing transactions linked to TF due to the lack of skilled compliance resources.
- B. Small- and medium-sized MSBs need to be targeted to ensure that competition in the industry remains constant and uniform.
- C. Small- and medium-sized MSBs are more likely to falsify records to appear less risky in order to keep the banking relationship.
- D. Small- and medium-sized MSBs need to be robustly supervised so the regulator can maintain visibility in combatting TF.
Answer: A
Explanation:
Explanation
A more robust supervisory approach is needed by regulators when overseeing small- and medium-sized MSBs compared to larger MSBs for combatting TF because small- and medium-sized MSBs are more at risk of allowing transactions linked to TF due to the lack of skilled compliance resources. Small- and medium-sized MSBs may face challenges in implementing effective AML/CFT controls, such as conducting risk assessments, applying customer due diligence measures, monitoring transactions, detecting suspicious activities, and reporting to the authorities. They may also have limited access to training, guidance, and tools to enhance their compliance capabilities. Therefore, regulators need to provide more supervision and support to small- and medium-sized MSBs to ensure that they comply with the AML/CFT requirements and mitigate the TF risks.
References:
Sustainable Growth for Small and Medium-Sized Enterprises ... - MDPI
Lessons on Resilience for Small and Midsize Businesses - HBR
NEW QUESTION # 37
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