ACAMS : CAMS7 Questions & Answers

The UN Security Council's primary role in imposing sanctions is that it has the authority to:

• A. impose sanctions on economic targets to maintain or restore financial stability within a country.
• B. conduct research on and analyze the impacts of sanctions to improve the effectiveness of sanctions regimes.
• C. impose sanctions to maintain or restore international peace and security.
• D. impose sanctions on countries that lack AML/CFT controls.

According to guidelines issued by Basel Committee on Banking Supervision relating to corporate governance principles for banks, what is the role of the board of directors in addressing an institution's AML oversight and governance?

• A. The compliance function must have sufficient authority, stature, independence, and resources to be effective on its own and should not have access to the board of directors.
• B. The compliance function should report directly to the CEO concerning the bank's compliance with applicable laws, rules, and standards and only update the board of directors on the bank's efforts in managing compliance risk when required.
• C. The board of directors should be responsible for overseeing the management of the bank's compliance risk but not involved in establishing a compliance policy that explains the processes by which compliance risks are to be identified and managed throughout the organization.
• D. The board of directors should establish a compliance function and approve the bank's policies for identifying, assessing, monitoring, reporting, and advising on compliance risk.

It is essential to identify any "family members" or "close associates" of politically exposed persons (PEPs) as part of the KYC/CDD process because they could be:

• A. used as intermediaries to facilitate bribery or corruption or to conceal the illicit wealth of the PEP.
• B. in a position to provide more information regarding the PEP's whereabouts and hidden properties.
• C. executing cross-border transactions for their own business which is not commensurate to the PEP's wealth.
• D. travelling to offshore jurisdictions often on holiday which exposes them to higher risks for AML.

An agent of a wealthy individual residing in Country A, which is on the EU list of high-risk third jurisdictions, approaches a notary in Country B, which is in the EU. The agent wants to complete a disposal of assets recently acquired at auction by the wealthy individual through an offshore company. The agent also has a power of attorney to act on behalf of the offshore company issued by a respectable law firm from Country C, which is also in the EU. The agent asks the notary to proceed with the disposal as quickly as possible without paying any specific attention to related costs or taxes to be paid as a result of this transaction. The notary notices the intended transfer price is significantly lower than the one recorded at auction, but the agent does not want to discuss this matter and claims that it is not covered by the power of attorney. Which red flags should the notary consider? (Select Two)

• A. The assets acquired through an auction were put in the name of an offshore company
• B. The agent requested a disposal of assets at a lower price than recently acquired.
• C. The agent acted on behalf of an individual residing in a country which is on the EU's list of high- risk jurisdictions
• D. The power of attorney was issued by a law firm in a different EU country from where the transaction took place.

Which of the following approaches should be used in combination to ensure customer data protection and AML compliance? (Select Three.)

• A. Data minimization
• B. Data encryption
• C. Access controls
• D. Comprehensive data collection
• E. Saving customer data beyond regulatory requirements