Certified Anti-Money Laundering Specialist (the 7th edition) v1.0

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Exam contains 119 questions
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There are three types of factors that can be used to authenticate someone ownership, knowledge, and inherent factors.
Which of the following factors falls under inherent factors?

  • A. Challenge-response
  • B. Fingerprint
  • C. Security token
  • D. Passphrase


Answer : B

Which of the following are common indicators of possible money laundering within the securities industry? (Choose two.)

  • A. Using brokerage accounts like deposit accounts
  • B. Receiving securities into an existing brokerage account following the death of a spouse
  • C. Allowing fixed income securities to mature
  • D. Engaging in transactions involving nominees or third parties


Answer : AD

Which of the following are key financial crime risks associated with real estate companies? (Choose four.)

  • A. Buying property allows for the movement of large amounts of funds in a single transaction
  • B. Criminal networks could purchase real estate for use as supply houses or locations to grow, manufacture, or distribute illicit narcotics
  • C. Markets can be volatile, and buyers may not achieve a strong return on their investment
  • D. Beneficial ownership information might be opaque, and criminals may abuse arrangements like shell companies and trusts
  • E. Real estate transactions often involve financial institutions and other professional gatekeepers
  • F. The high value of properties may require multiple types of financing, which can make it more difficult to identify the source of funds


Answer : ABDE

Which payment type presents the highest financial crime risk?

  • A. A check returning a mortgage overpayment made in error
  • B. A payment made to a mixer platform
  • C. A regular standing order to a high-interest savings account
  • D. A bill payment made to a friend after splitting a dinner bill


Answer : B

A large international bank is conducting a comprehensive review of its risk management framework to ensure it effectively addresses various financial crime risks, including AML, CFT, sanctions, fraud, anti-bribery and corruption (ABC), and tax evasion.
The bank’s compliance team is responsible for evaluating the current risk assessment processes, identifying potential gaps, and recommending enhancements to better mitigate these risks. During this review, the team needs to consider the different types of risk assessments and how to integrate findings into the overall risk management strategy.
Which approach should the compliance team prioritize to enhance the bank’s ability to identify, assess, and mitigate the identified risks?

  • A. Use a static risk assessment model that remains unchanged until a significant regulatory update occurs to ensure consistency in the evaluation process over time
  • B. Delegate the risk assessment process to individual business units to conduct independently and allow for specialized assessments tailored to each unit's specific activities
  • C. Conduct a periodic enterprise-wide risk assessment that includes identifying inherent risks, evaluating the effectiveness of existing controls, and determining residual risks
  • D. Focus primarily on AML risk assessments, as these are typically the most scrutinized by regulators, while addressing other financial crime risks only when issues are identified


Answer : C

Which of the services provided by Trust and Company Service Providers (TCSPs) present the greatest financial crime risks? (Choose three.)

  • A. Providing clear procedures to ensure compliance with local tax regulations
  • B. Using trusts to obscure the identity of beneficial owners
  • C. Promoting the use of complex corporate structures
  • D. Maintaining accurate and updated beneficial ownership details for all customers registered for their services
  • E. Establishing shell companies for holding financial assets


Answer : BCE

The purpose of a risk appetite statement is to:

  • A. clearly define the level of risk exposure to financial crime which a financial institution is willing to take.
  • B. help investors understand the risk a financial institution is willing to take.
  • C. help customers understand which financial institutions may be willing to bank their business.
  • D. eliminate high-risk business types from a financial institution.


Answer : A

Unusual wire transfer transactions can include: (Choose two.)

  • A. wire transfers in different currencies between accounts held at different banks for the same client.
  • B. an incoming third-party wire transfer followed by the purchase of real estate in the client's name.
  • C. an incoming wire transfer followed by the loan payment to a third party that is a business associate of the client.
  • D. multiple wire transfers sent to counterparties associated with the client as per KYC documentation.


Answer : AB

Perpetual KYC includes: (Choose two.)

  • A. triggers identifying static data changes and data based on client's behaviors in real time.
  • B. periodic refreshing at one-, three- and five-year cycles.
  • C. ability to prioritize better based on client data rather than driven by schedules alone.
  • D. classification of clients into categories of risk.


Answer : AC

A financial institution is exploring automation to assist investigators in reviewing flagged transactions. Currently, investigators spend a significant amount of time gathering data from multiple sources.
Which of the following automation features would be most effective in improving investigator efficiency?

  • A. Pre-populated templates for SAR filing
  • B. Integration of open-source tools to gather real-time intelligence
  • C. Automated case prioritization based on risk scoring
  • D. AI-powered dashboards summarizing flagged transactions


Answer : D

According to the Financial Action Task Force (FATF) Recommendation regarding "tipping off," which of the following statements accurately describes the obligations of reporting entities?

  • A. Reporting entities are prohibited from disclosing to clients or third parties that a suspicious activity report (SAR) has been filed or that an investigation is ongoing
  • B. Reporting entities can share general information about suspicious activities internally within the organization without compromising confidentiality
  • C. Reporting entities must inform their clients if a suspicious activity report (SAR) has been filed, as part of maintaining transparency in customer relations
  • D. Reporting entities are allowed to discuss suspicious activities with clients if it helps clarify a situation before submitting a suspicious activity report (SAR)


Answer : A

A key advantage of privacy enhancing technologies (PETs) in anti-money laundering is that they offer:

  • A. simultaneous encryption and decryption for underlying data.
  • B. full access to underlying data with full and uninterrupted calculations made on the data.
  • C. secure processing of data while it remains encrypted.
  • D. transfer, decryption and storage of data by the data processor.


Answer : C

What are the primary advantages of using open-source tools in financial crime investigations? (Choose two.)

  • A. Partial automation of data collection and analysis
  • B. Cost-effective access to a wide range of data
  • C. Real-time monitoring of selected transactions and data sources
  • D. Ability to conduct investigations with minimal human oversight
  • E. Enhanced ability to identify connections across various data sets


Answer : AB

Which of the following best describes the use of fuzzy logic in customer screening systems?

  • A. It produces outputs that include a range of intermediate possibilities between "Yes" and "No"
  • B. It is an advanced analytics tool widely used to implement AFC controls
  • C. It allows for a greater number of exact matches, reducing the need for manual review
  • D. It is a new technique for enhancing the quality of alerts for review


Answer : A

Which of the following serves as an example of a successful public-private partnership (PPP)?

  • A. The Financial Action Task Force (FATF)
  • B. The AUSTRAC Fintel Alliance
  • C. The Egmont Group
  • D. The Wolfsberg Group


Answer : B

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Exam contains 119 questions
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