ACAMS - Association of Certified Anti-Money Laundering Specialists AML/CFT Risk and Methods Questions and Answers

Question 1

A financial institution's risk assessment identifies that it facilitates a high volume of international trade finance for a variety of goods.
Which money laundering method should be of PRIMARY concern when developing risk mitigation strategies for this line of business?

Accepted Answer

Trade-Based Money Laundering (TBML).

Answer

Structuring cash deposits below reporting thresholds.

Answer

Misuse of correspondent banking relationships.

Answer

Smurfing through multiple third-party accounts.

Question 2

An AML analyst is reviewing a customer's account and notes a pattern of frequent cash deposits in different branches, all just under the $10,000 reporting threshold. This activity is immediately followed by wire transfers to a high-risk jurisdiction. This pattern is a classic red flag for which of the following?

Accepted Answer

Structuring.

Answer

Terrorist financing.

Answer

Integration stage of money laundering.

Answer

Refining.

Question 3

Which of the following customer profiles presents the highest inherent AML risk and would most likely require Enhanced Due diligence (EDD)?

Accepted Answer

A foreign politically exposed person (PEP) seeking to open a private banking account.

Answer

A local salaried employee with a stable transaction history.

Answer

A domestic manufacturing company with transparent ownership.

Answer

A retired individual receiving regular pension payments.

Question 4

A key difference between money laundering and terrorist financing is that terrorist financing:

Accepted Answer

Can involve funds from legitimate sources, such as donations.

Answer

Always involves proceeds from criminal activity.

Answer

Is exclusively conducted through formal banking channels.

Answer

Primarily focuses on the integration stage to legitimize funds.

Question 5

A compliance officer at a bank is reviewing a new corporate account application for 'ABC Trading Ltd.' The company lists a registered agent's address, has nominee directors, and its stated business purpose is 'general international trade.' Financial projections show anticipated high-volume wire transfers to and from various offshore jurisdictions with no clear business rationale. These characteristics are strong indicators of a potential:

Accepted Answer

Shell company.

Answer

Front company.

Answer

Shelf company.

Answer

Subsidiary company.

Question 6

Which of the following is considered a primary risk associated with correspondent banking relationships for AML/CFT purposes?

Accepted Answer

Limited visibility into the respondent bank's customers and their transactions.

Answer

The correspondent bank's inability to offer competitive interest rates.

Answer

The high volume of domestic transactions processed through the accounts.

Answer

The respondent bank being subject to different data privacy regulations.

A financial institution's risk assessment identifies that it facilitates a high volume of international trade finance for a variety of goods.Which money laundering method should be of PRIMARY concern when developing risk mitigation strategies for this line of business?

A financial institution's risk assessment identifies that it facilitates a high volume of international trade finance for a variety of goods.
Which money laundering method should be of PRIMARY concern when developing risk mitigation strategies for this line of business?