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ACAMS Practice Questions
B - ✔ ✔ In general, the three phases of money laundering are said to be:
Placement:
A. Structuring and manipulation. B. Layering and integration. C. Layering and smur ng. D. Integration and in ltration.
A - ✔ ✔ Which of the following is the most common method of laundering
money through a legal money services business?
A. Purchasing structured money instruments. B. Smuggling bulk-cash. C. Transferring funds through Payable Through Accounts (PTAs). D. Exchanging Colombian pesos on the black market.
A - ✔ ✔ 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 smur ng is a signi cant money laundering technique identi ed 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.
BCD - ✔ ✔ Which three of the following is an indication of possible money
laundering in an insurance industry scenario? A. Insurance products sold through intermediaries, agents or brokers. B. Single-premium insurance bonds, redeemed at a discount. C. Policyholders who are unconcerned about penalties for early cancellation. D. Policyholders who make full use of the "free look" period.
D. A rule in the law of a country allowing its authorities to cooperate with authorities of other countries to the degree that their law allows them to do the same.
C - ✔ ✔ The greatest risk for money laundering is for casinos that A. Provide their customers with a wide array of gambling services. B. Operate in a non-Egmont member country. C. Allow customers with credit balances to withdraw funds by check in another jurisdiction. D. Only send suspicious transaction reports to the nancial intelligence unit of the country it operates in.
B - ✔ ✔ Which statement is true regarding the risk of Politically Exposed
Persons (PEPs)? A. PEPs provide access to third parties on whom the nancial institution has not conducted suf cient due diligence. B. PEPs have signi cantly 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 - ✔ ✔ Dirty money, derived from criminal activities of
Belgian Criminal A, is sent to a foreign bank account of Corporation B. Then in Belgium, a new investment Company C is incorporated. Criminal A is appointed as a director of Company C. Company C borrows money from the foreign Company B and buys real estate in Belgium. The real estate is rented to third parties. Director (Criminal) A also rents an apartment in the building. With the funds generated by the rent, Company C pays off the loan to Corporation B, and the salary of Director A. Criminal A now converted his dirty money in legal funds. This laundering method is commonly referred to as what? A. Offsetting real estate transactions. B. Loan back. C. Cuckoo smur ng. D. Loan manipulation.
A - ✔ ✔ 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.
C - ✔ ✔ Which of the following statements is true? Correspondent banking is
MOST vulnerable to money laundering when the correspondent account is: A. Maintained for foreign nancial institutions that are banks. B. Not used to provide services directly to third parties. C. Maintained for a foreign bank that does not have a physical presence in any country. D. Maintained for a foreign private bank that is publicly traded and is a quali ed intermediary.
D - ✔ ✔ Which statement is true? Lawyers:
A. In FATF member countries can generally not be used to serve as formation agents to set up trusts, front companies or shell companies.
B. And similar professional "gatekeepers" are called money services businesses. C. Can generally not be used to act as a nominee shareholder for a bene cial owner. D. Can be abused by launderers by using the accounts they set up for them for the placement and layering of funds.
A - ✔ ✔ The Third EU Money Laundering Directive of 2005 applies to which
of the following rms? A. Auditors, estate agents based in the EU. B. U.S. Financial institutions covered by the USA Patriot Act. C. Shell rms inside and outside the EU. D. EU based high value good dealers who deal in cash of 10,000 Euro or more.
C - ✔ ✔ 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.
international element to the crime, can lead to a suspicious activity report. B. Unlawful activity whose proceeds, if involved in the transaction, can give rise to prosecution for the crime of money laundering. C. An interface which is the underlying segment of a suspicious transaction monitoring system. D. A speci ed unlawful activity that is committed through concentration accounts deceiving customers that are not directly related to the account.
B - ✔ ✔ What is considered a bene cial owner of an account? A person or
entity: A. That has direct signatory authority over an account, and whose name appears on the account. B. That is ultimately entitled to the funds in the account, even though his name may not appear on the account. C. That is the originator and the destination of most (but not all) transactions conducted within the account, but who does not ultimately control such funds. D. That is a gatekeeper, has the legal title to the account, and typically transfers the funds to a trust.
B - ✔ ✔ 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 signi cance 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 nished pieces of jewelry.
ABC - ✔ ✔ 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 speci c 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.
seized and con scated; and on mutual legal assistance, but not necessarily on other international requests for co- operation. C. Consider the feasibility of a system where banks and other nancial institutions and intermediaries would report currency transactions without indicating a minimum xed amount. D. Not approve the establishment or accept the continued operation of shell banks.
C - ✔ ✔ Among the Principles for Information Exchange Between Financial
Intelligence Units for Money Laundering Cases, issued by the Egmont Group on June 13, 2001, we nd 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 speci c problems in case of NCCT countries. C. Information exchanged between FIUs may be used only for the speci c 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.
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.
A - ✔ ✔ 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.
D - ✔ ✔ 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.
criminal activity. C. A customer who owns a large supermarket and deposits large amounts of cash several times a day. D. A customer whose account is showing transaction activities which are beyond his known nancial capability.
A - ✔ ✔ As part of their role in ghting money laundering, nancial institutions
should: A. Designate a compliance of cer. 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.
B - ✔ ✔ What could happen to compliance of cers 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 nes, negative reputation to their employer. C. Nothing. Only the nancial institution's legal counsel will be responsible for
complying with laws. D. Nothing. Only the staff directly handling transactions have to worry.
C - ✔ ✔ What is willful blindness de ned as?
A. Failing to le a Suspicious Transaction Report for dealing with companies or nancial institutions from offshore tax havens. B. Not following customer identi cation procedures as set out in the institution's procedures. C. Deliberate avoidance of knowledge of the facts or ignoring obvious money laundering red ags. 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.
A - ✔ ✔ In anti-money laundering terminology a "red ag" is:
A. A warning sign used to bring attention to potentially suspicious, risky transactions or activities. B. A general banking term used once the balance is negative / overdue. C. The standard ag of countries not cooperative in ghting money laundering and terrorist nancing. D. An indicator that a customer is listed on an economic sanctions list.
A - ✔ ✔ Why is a Payable Through Account vulnerable to money laundering?
A. These are master correspondent accounts that allow the customers of the foreign bank to do a wide range of transactions. B. These are correspondent accounts located in a non- cooperative country or territory. C. These are nested correspondent accounts at a foreign shell bank with customers with whom the domestic bank did not exercise due diligence. D. These are master escrow accounts on which a domestic bank generally does not conduct periodic veri cation.
B - ✔ ✔ What is the reasoning behind implementing a "risk-based anti- money laundering approach"? A. It will keep the regulators focused on money laundering controls in sectors beyond banks. B. Institutions can best use their limited resources to focus on matters where the money laundering risks are highest. C. A quantitative approach will generate better results than a qualitative approach. D. It allows the institution to focus on selling products that have a better return on investment.
A - ✔ ✔ According to the FATF 40 Recommendations, "designated non-
nancial businesses and professions" include: A. Casinos, real estate agents and dealers in precious stones. B. Money service businesses, gatekeepers, and issuers of electronic money. C. Dealers in precious metals, lawyers, commodity futures traders. D. Life insurance companies, real estate agents and notaries.
C - ✔ ✔ According to the FATF 40 Recommendations, the threshold for
identifying occasional customers at nancial institutions is: A. EURO/US$ 5,000. B. EURO/US$ 10,000. C. EURO/US$ 15,000. D. EURO/US$ 20,000.
B - ✔ ✔ Tom works as a compliance of cer at ABC Bank. He is looking at the transactions of one of the bank's customers, Mr. Brown, the owner of a check cashing company. Over the last six months, Mr. Brown has not made withdrawals of cash against check deposits. He also deposited two checks for US$2,000 each that were issued by a casino. When checking the KYC le, Tom sees that, when opening the account, Mr. Brown had requested detailed
