CAMS: Compliance standards for anti-money laundering (aml) and combating the financing of terrorism (cft) Welcome to your CAMS: Compliance standards for anti-money laundering (aml) and combating the financing of terrorism (cft) 1. CAMS: compliance standards for anti-money laundering (aml) and combating the financing of terrorism (cft) Which of the following best exemplifies the concept of "enhanced due diligence" in the context of AML/CFT compliance? A. Conducting background checks on all new customers. B. Applying the same level of due diligence to all customers. C. Performing additional scrutiny on transactions involving high-risk countries. D. Setting a fixed transaction threshold for reporting suspicious activities. None 2. CAMS: compliance standards for anti-money laundering (aml) and combating the financing of terrorism (cft) Which component is crucial in an AML/CFT compliance program for understanding the risk associated with a new customer? A. Transaction monitoring system. B. Customer Acceptance Policy. C. Risk-based approach to customer due diligence. D. Regular audit of compliance procedures. None 3. CAMS: compliance standards for anti-money laundering (aml) and combating the financing of terrorism (cft) In the context of AML/CFT, "Know Your Customer" KYC regulations primarily aim to: A. Ensure all customers are legally registered in their home countries. B. Monitor customer transactions in real-time. C. Establish the identity and understand the nature of the customer's business. D. Guarantee the profitability of the financial institution. None 4. CAMS: compliance standards for anti-money laundering (aml) and combating the financing of terrorism (cft) Which of the following best defines a Politically Exposed Person (PEP) in AML/CFT practices? A. Any individual who conducts transactions above a certain threshold. B. A person who has been convicted of a financial crime. C. An individual who holds a prominent public position, or is closely related to someone who does. D. A customer who refuses to provide identification documents. None 5. CAMS: compliance standards for anti-money laundering (aml) and combating the financing of terrorism (cft) Which of the following entities is NOT typically subject to AML/CFT regulations? A. Commercial banks. B. Insurance companies. C. Real estate agencies. D. Public libraries. None 6. CAMS: compliance standards for anti-money laundering (aml) and combating the financing of terrorism (cft) The Financial Action Task Force (FATF) recommends which approach for AML/CFT compliance? A. A fixed approach, applying the same standards to all customer relationships. B. A risk-based approach, tailoring due diligence and monitoring efforts based on risk. C. A technology-based approach, focusing solely on implementing advanced monitoring systems. D. A regulation-based approach, adhering strictly to local laws without considering international standards. None 7. CAMS: compliance standards for anti-money laundering (aml) and combating the financing of terrorism (cft) Which of the following is an essential element of a suspicious activity reporting (SAR) system? A. A minimum transaction value threshold for reporting. B. A policy of reporting all transactions over a certain period. C. Confidentiality of the reporting process to protect the institution. D. Mandatory feedback from regulators on each report filed. None 8. CAMS: compliance standards for anti-money laundering (aml) and combating the financing of terrorism (cft) What is the primary purpose of imposing sanctions in the context of AML/CFT? A. To punish non-compliant institutions by restricting their business operations. B. To encourage financial institutions to lower their fees. C. To provide tax benefits to compliant institutions. D. To compensate victims of financial crimes. None 9. CAMS: compliance standards for anti-money laundering (aml) and combating the financing of terrorism (cft) What role does 'consent' play in the context of data sharing under AML/CFT regulations? A. Consent is not required; financial institutions can freely share customer data. B. Consent must be obtained from customers before sharing their data for AML/CFT purposes. C. Consent is only required for sharing data with foreign entities. D. Consent is required but can be bypassed under certain national security circumstances. None 10. CAMS: compliance standards for anti-money laundering (aml) and combating the financing of terrorism (cft) Which statement best describes the 'Wolfsberg Principles'? A. A set of global guidelines on corporate governance. B. A detailed list of high-risk countries for money laundering. C. A series of guidelines formulated by banks to prevent money laundering and terrorist financing. D. International accounting standards for financial transparency. None 11. CAMS: compliance standards for anti-money laundering (aml) and combating the financing of terrorism (cft) What is the primary focus of the 'three lines of defense' model in AML/CFT compliance? A. Separating the powers of executive, legislative, and judicial branches. B. Dividing responsibilities among front-office, mid-office, and back-office. C. Ensuring there are three independent audit firms reviewing each account. D. Implementing a layered approach to risk management involving operational management, risk compliance, and internal audit. None 12. CAMS: compliance standards for anti-money laundering (aml) and combating the financing of terrorism (cft) In the context of AML/CFT, what is 'smurfing'? A. A method of using complex financial instruments to disguise illicit funds. B. The practice of structuring transactions to avoid regulatory thresholds. C. An auditing technique used to detect anomalies in financial statements. D. A cybersecurity measure to protect against unauthorized data breaches. None 13. CAMS: compliance standards for anti-money laundering (aml) and combating the financing of terrorism (cft) Which international standard sets out the requirements for a Customer Identification Program (CIP) as part of AML/CFT measures? A. ISO 31000:2018 Risk Management Guidelines. B. The Wolfsberg Principles. C. Financial Action Task Force (FATF) Recommendations. D. Basel III Regulatory Framework. None 14. CAMS: compliance standards for anti-money laundering (aml) and combating the financing of terrorism (cft) In the context of AML/CFT, "layering" specifically refers to which stage of money laundering? A. Placement stage, where illicit funds are introduced into the financial system. B. Layering stage, where the origin of funds is obscured through complex transactions. C. Integration stage, where laundered funds are reintegrated into the legitimate economy. D. Initial stage, where illegal funds are first generated from criminal activities. None 15. CAMS: compliance standards for anti-money laundering (aml) and combating the financing of terrorism (cft) What does the term "beneficial owner" refer to in the context of AML/CFT compliance? A. The legal owner of a bank account. B. The person who performs the majority of transactions in an account. C. The individual or entity that ultimately owns or controls a customer or on whose behalf a transaction is conducted. D. The shareholder with the largest percentage of shares in a company. None 16. CAMS: compliance standards for anti-money laundering (aml) and combating the financing of terrorism (cft) Which of the following activities is considered a red flag for potential money laundering in trade-based transactions? A. Engaging in transactions that are consistent with the company's usual business practices. B. Over or under-invoicing of goods and services. C. Conducting transactions in the local currency. D. Having a clear and transparent supply chain. None 17. CAMS: compliance standards for anti-money laundering (aml) and combating the financing of terrorism (cft) What is the main purpose of applying "counter-measures" according to FATF recommendations? A. To enhance the competitiveness of financial institutions. B. To apply reciprocal measures against countries that do not cooperate internationally. C. To protect financial institutions from market volatility. D. To apply specific protective measures to countries that do not comply with AML/CFT standards. None 18. CAMS: compliance standards for anti-money laundering (aml) and combating the financing of terrorism (cft) In AML/CFT compliance, the term "nested account" typically refers to: A. An account that is used exclusively for saving purposes. B. An account within another account, used by smaller foreign financial institutions to access larger financial systems. C. A dormant account that has been inactive for a long period. D. An account set up for charitable purposes. None 19. CAMS: compliance standards for anti-money laundering (aml) and combating the financing of terrorism (cft) In AML/CFT terminology, "de-risking" primarily refers to: A. The process of closing accounts that have a high risk of financial losses. B. The strategy of diversifying assets to mitigate overall risk. C. The practice of financial institutions exiting relationships with and closing accounts of clients deemed high-risk. D. Lowering the thresholds for reporting suspicious transactions to reduce legal exposure. None 20. CAMS: compliance standards for anti-money laundering (aml) and combating the financing of terrorism (cft) Which of the following best describes the purpose of the "Travel Rule" in the context of AML/CFT compliance? A. It requires financial institutions to keep a record of all international transactions above a certain threshold. B. It mandates financial institutions to report any transactions involving travel companies. C. It requires the inclusion of originator and beneficiary information on wire transfers over a certain threshold. D. It is a guideline for financial institutions to follow while conducting business in foreign countries. None 21. CAMS: compliance standards for anti-money laundering (aml) and combating the financing of terrorism (cft) The principle of "willful blindness" in the context of AML/CFT compliance refers to: A. The deliberate avoidance of knowledge of the illicit nature of certain transactions. B. The inability of financial institutions to detect complex laundering schemes. C. The lack of resources to conduct proper customer due diligence. D. The legal protection given to whistleblowers. None 22. CAMS: compliance standards for anti-money laundering (aml) and combating the financing of terrorism (cft) What is the significance of the "Correspondent Banking" relationship in AML/CFT practices? A. It facilitates the exchange of currency between different countries. B. It provides a framework for international credit and investment. C. It allows banks to provide services in a jurisdiction where they have no physical presence. D. It is a method for central banks to manage inflation and interest rates. None 23. CAMS: compliance standards for anti-money laundering (aml) and combating the financing of terrorism (cft) What is the primary purpose of conducting a National Risk Assessment (NR A. in the context of AML/CFT? A) To assess the effectiveness of a country's monetary policy. B. To evaluate the financial stability of a country's banking sector. C. To identify the threats and vulnerabilities to a country's financial system related to money laundering and terrorist financing. D. To measure the credit risk exposure of a country's financial institutions. None 24. CAMS: compliance standards for anti-money laundering (aml) and combating the financing of terrorism (cft) In the context of AML/CFT, "structuring" refers to: A. Organizing the internal control systems within a financial institution. B. Designing the framework of an AML/CFT compliance program. C. The practice of breaking down large transactions into smaller ones to evade reporting thresholds. D. Creating a complex corporate structure to facilitate cross-border transactions. None 25. CAMS: compliance standards for anti-money laundering (aml) and combating the financing of terrorism (cft) Which of the following scenarios is most indicative of "Trade-Based Money Laundering" (TBML)? A. Transferring funds through multiple shell companies. B. Misusing structured financial products. C. Over or under-invoicing in international trade transactions. D. Frequent changes in corporate ownership structure. None 26. CAMS: compliance standards for anti-money laundering (aml) and combating the financing of terrorism (cft) In AML/CFT compliance, "Know Your Transaction" (KYT) is significant because it: A. Helps in understanding the historical financial behavior of a customer. B. Allows for the prediction of future market trends. C. Ensures that all transactions are profitable for the financial institution. D. Enables the monitoring of transactions to detect patterns indicative of money laundering or terrorist financing. None 27. CAMS: compliance standards for anti-money laundering (aml) and combating the financing of terrorism (cft) What role does the Financial Intelligence Unit (FIU) play in a country's AML/CFT framework? A. It grants loans to businesses. B. It regulates the interest rates for loans and deposits. C. It serves as the central national agency responsible for receiving, analyzing, and disseminating financial information related to potential money laundering or terrorist financing. D. It is responsible for minting and printing the national currency. None 28. CAMS: compliance standards for anti-money laundering (aml) and combating the financing of terrorism (cft) Which statement is true regarding the role of "Ultimate Beneficial Ownership" information in AML/CFT compliance? A. It is only relevant for non-profit organizations. B. It is used to determine the tax bracket of a business entity. C. It assists in identifying the natural persons who ultimately own or control a legal entity or arrangement. D. It is utilized to calculate the annual turnover of a business. None 29. CAMS: compliance standards for anti-money laundering (aml) and combating the financing of terrorism (cft) Which of the following best describes the term "PEP Screening" in AML/CFT compliance? A. Evaluating the performance of political parties during elections. B. Monitoring public expenditure programs. C. Conducting due diligence to identify if an individual holds or has held a prominent public function. D. Screening for individuals with high credit scores. None 30. CAMS: compliance standards for anti-money laundering (aml) and combating the financing of terrorism (cft) What is the main objective of imposing "economic sanctions" in the context of AML/CFT? A. To stimulate economic growth in developing countries. B. To restrict or prohibit certain types of transactions with targeted nations, entities, or individuals. C. To encourage free trade between countries. D. To reduce the overall cost of international transactions. None 1 out of 30 Time is Up! Time's up
