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ACAMS 100 Practice Set – 1 Test
- What is an advantage of having an outside counsel perform an internal investigation on behalf of the financial institution? A. The outside counsel can bring an impartial and legal perspective to the review. B. The outside counsel can intimidate the employees into confessing complicity with the wrongdoers. C. The outside counsel can create an attorney-client privilege not just vis à vis the bank, but also in connection with each employee. D. The outside counsel will be able to convince the prosecutors not to take any action against the institution. - ✔ ✔ A
- What are the three classic gateways for international cooperation and sharing? A. Mutual Legal Assistance Treaties (MLATs). B. Law enforcement use grand jury subpoenas.
C. Exchange of information between Financial Intelligence Units (FIUs). D. Exchange of information between supervisory agencies. - Correct Answer ✔️ ✔️ A C D
- What are three of the recommended ways to respond to a law enforcement inquiry? A. Cooperate with the law enforcement inquiry as much as possible. B. Respond to all formal requests for information as promptly and thoroughly as possible, unless there is a valid objection that can and should be made. C. Ensure that all communication, written and oral, is funneled through a centralized place. D. Guard against unwarranted publicity by resisting all inquiries and requests whenever possible. 31 - Correct Answer ✔️ ✔️ A
B
A. To be able to ensure that nothing damaging to the financial institution gets released. B. To ensure that responses are timely and thorough and that privileged material is not inadvertently handed over. C. To ensure that the employees of the institution do not divulge information that would breach the privacy rights of customers. D. To ensure that there is one person who can adequately and thoroughly apprise the Board of Directors of the progress of the investigation. - Correct Answer ✔️ ✔️ B
- When a financial institution is served with a search warrant by a law enforcement agency, what are three things that the employees of the institution should do? A. They should not release any documents until the institution's outside counsel arrives on the scene. B. They should cooperate fully with the law enforcement agents and remain calm and polite.
C. They should try to obtain an inventory of the materials that the law enforcement agents take from the institution. D. They should review the warrant to determine its scope. 32 - Correct Answer ✔️ ✔️ B C D
- When should a financial institution consider retaining an experienced outside counsel to assist it? A. Whenever the institution receives a subpoena from any law enforcement agency. B. When the institution itself appears to be the target of a criminal investigation. C. When law enforcement appears to be focused on the accounts of a very good and long-standing customer of the institution. D. When the banking agencies criticize the adequacy of the institution's AML monitoring procedures. - Correct Answer ✔️ ✔️ B
B. One should try to put the employees at ease during the interview and start with relatively easy, non- controversial, questions before getting into more sensitive matters. C. One should use open-ended questions for the employees in order to ensure that the questions do not dictate what the expected answer is. D. One should control the interview as much as possible in order to attempt to resolve the matter quickly and uncover the wrongdoer. - Correct Answer ✔️ ✔️ A
B C
- With regard to exchanges of information between FIUs of different countries, what are three controlling principles? A. That sharing between FIUs be permitted only if the central banks are also a party to the sharing. B. That the sharing of information should be done as freely as possible on the basis of reciprocity.
C. That the sharing should be on the basis of requests and also spontaneously. D. That differences in the definition of offenses should not impede the free exchange of information. - Correct Answer ✔️ ✔️ B
C D
- 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. - Correct Answer ✔️ ✔️ A
- Which of the following statements is true? Correspondent banking is MOST vulnerable to money laundering when the correspondent account is: A. Maintained for foreign financial institutions that are banks.
A. Auditors, estate agents based in the EU. B. U.S. Financial institutions covered by the USA Patriot Act. C. Shell firms inside and outside the EU. D. EU based high value good dealers who deal in cash of 10,000 Euro or more. - Correct Answer ✔️ ✔️ A
- According to the EU Directives of 2001, an independent legal professional is obligated to report suspicion of money laundering in a client relationship when: A. Representing a client in a legal matter. B. Ascertaining the legal position for a client. C. Participating in financial or corporate transactions. D. Obtaining information associated with a judicial proceeding. - Correct Answer ✔️ ✔️ C
- Which of the following is the most difficult regulatory challenge facing a foreign financial institution with a correspondent banking relationship in the U.S.? A. USA Patriot Act.
B. Basel Due Diligence Principles for Banks. C. FATF Guidance on Terrorist Financing. D. UN Security Council Resolution on Correspondent Banking. 6 - Correct Answer ✔️ ✔️ A
- Which were the Basel Committee's two main motivations to encourage strong Know Your Customer programs in its paper "Customer Due Diligence for Banks"? A. Mirror FATF's KYC Recommendations. B. Meet European Union guidelines. C. Protect the safety and soundness of banks. D. Protect the integrity of banking systems. - Correct Answer ✔️ ✔️ C
D
- What is the definition of a predicate offense? A. Lawful or unlawful activity that involves willful blindness, and if there is an international element to the crime, can lead to a suspicious activity report.
- A bank in Italy holds a business account for an Italian company that sells gold throughout Europe and the Western Hemisphere. The bank knows the purpose of this account is to receive payment for sales. A review of the account shows a pattern of wire transfers coming from payable-through accounts. There is also a pattern of purchases of gold bullion held in Swiss banks. The MOST important factor in assessing whether money laundering is a threat is that the: A. Customer sells gold in regions where it carries an important or religious significance that adds to the high intrinsic value. B. Payments come from third-party accounts. C. Payments received are in the form of wire transfers instead of cash. D. Account holder maintains gold bullion rather than finished pieces of jewelry.
- 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. Require money laundering offenses to prove that the offender has actual knowledge of a criminal connection to the funds. - Correct Answer ✔️ ✔️ A B C
- Which three statements are true about the 3rd EU Directive on Money Laundering of 2005? It: A. Was proposed in order to update European Community legislation in line with the Financial Action Task Force (FATF) 40 Recommendations. B. Largely replicates the definitions included in the Second Directive, including the definition of a politically exposed person. C. Repeats the main customer due diligence requirements of the first and second Directives, but adds more detail to the requirements by, for example, including a specific requirement to identify the beneficial owner if one exists and includes ongoing monitoring requirements.
- Among the Principles for Information Exchange Between Financial Intelligence Units for Money Laundering Cases, issued by the Egmont Group on June 13, 2001, we find which of the following? A. Information-sharing agreements must be drafted according to a model issued by the Egmont Group. B. Information-sharing agreements should not allow room for case-by-case solutions to specific problems in case of NCCT countries. C. Information exchanged between FIUs may be used only for the specific purpose for which the information was sought or provided. D. The requesting FIU may make use of the information shared by a disclosing FIU for administrative purposes without the prior consent of the disclosing FIU. - Correct Answer ✔️ ✔️ C
- In which stage of money laundering would you classify depositing small amounts of cash into several related accounts? A. Integration. B. Structuring. C. Placement.
D. Construction. 9 - Correct Answer ✔️ ✔️ C
- In which stage of money laundering would you classify the use of laundered funds to purchase high value assets and luxury items? A. Integration. B. Structuring. C. Placement. D. Construction. - Correct Answer ✔️ ✔️ A
- In most laws criminalizing money laundering, it is stated that: A. Financial institutions are not responsible for money laundering or suspicious transactions taking place within their accounts until the government places the customer on a watch list. B. Tipping off (telling customers that their accounts/ transactions are under investigation because of suspicion) is not punishable. C. The dirty money undergoing money laundering will not be confiscated because of privacy laws.
D. A customer whose account is showing transaction activities which are beyond his known financial capability. 10 - Correct Answer ✔️ ✔️ C
- As part of their ro2le 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. - Correct Answer ✔️ ✔️ A
- What could happen to compliance officers if they do not comply with the anti-money laundering laws and regulations? A. Their employers could face reputation damage, but the employee is immune from penalty. B. Loss of job, prison penalties and fines, negative reputation to their employer.
C. Nothing. Only the financial institution's legal counsel will be responsible for complying with laws. D. Nothing. Only the staff directly handling transactions have to worry. - Correct Answer ✔️ ✔️ B
- What is willful blindness defined as? A. Failing to file a Suspicious Transaction Report for dealing with companies or financial institutions from offshore tax havens. B. Not following customer identification procedures as set out in the institution's procedures. C. Deliberate avoidance of knowledge of the facts or ignoring obvious money laundering red flags. D. Deliberate avoidance of a customer based on the assumption that his or her behavior suggested a potential threat as money launderer and/or terrorist. - Correct Answer ✔️ ✔️ C
- In anti-money laundering terminology a "red flag" is:
