ACAMS Basic 2 — Questions and Answers
Question 1: Under the Bank Secrecy Act, at what dollar threshold must a financial institution file a Currency Transaction Report (CTR)?
- $5,000
- $10,000 (Correct answer)
- $15,000
- $25,000
Correct answer: $10,000
The BSA requires a CTR to be filed for any cash transaction exceeding $10,000 in a single business day.
Question 2: Which international body is primarily responsible for setting global AML/CFT standards and conducting mutual evaluations of member countries?
- The World Bank
- The International Monetary Fund
- The Financial Action Task Force (FATF) (Correct answer)
- The Basel Committee on Banking Supervision
Correct answer: The Financial Action Task Force (FATF)
FATF issues the 40 Recommendations that form the international framework for combating money laundering and terrorist financing.
Question 3: What is 'tipping off' in the context of AML compliance?
- Providing financial intelligence to law enforcement proactively
- Alerting a subject that they are under investigation or a SAR has been filed (Correct answer)
- Informing regulators about a compliance program deficiency
- Training staff about emerging money laundering typologies
Correct answer: Alerting a subject that they are under investigation or a SAR has been filed
Tipping off is the prohibited act of disclosing to a suspect that a SAR has been filed or that they are under scrutiny.
Question 4: The FinCEN 314(a) program allows which of the following?
- Banks to share customer data with credit bureaus without consent
- Law enforcement to request financial institutions to search records for named subjects (Correct answer)
- Institutions to file joint SARs for shared customers
- Regulators to access real-time transaction data from all banks
Correct answer: Law enforcement to request financial institutions to search records for named subjects
Section 314(a) of the USA PATRIOT Act permits law enforcement to send requests to FinCEN, which then notifies financial institutions to search their records.
Question 5: What is the primary purpose of a Suspicious Activity Report (SAR)?
- To document routine high-value cash transactions for tax purposes
- To notify a customer that their account is being closed
- To alert financial intelligence units to potentially illicit activity (Correct answer)
- To record all wire transfers above $3,000
Correct answer: To alert financial intelligence units to potentially illicit activity
SARs are filed with FinCEN to flag transactions or behaviors that may indicate money laundering, fraud, or other criminal activity.
Question 6: In correspondent banking, what is a 'nested' correspondent relationship?
- A bank using another bank's correspondent account to access financial services (Correct answer)
- A direct relationship between two central banks
- A bank opening sub-accounts for its individual retail customers
- A relationship where two banks share the same compliance officer
Correct answer: A bank using another bank's correspondent account to access financial services
Nesting occurs when a respondent bank allows third-party banks to transact through its correspondent account, creating additional layers and risk.
Question 7: Which of the following best describes the concept of a 'risk-based approach' in AML compliance?
- Applying identical controls to all customers regardless of their risk profile
- Allocating resources and controls proportionate to the level of money laundering risk identified (Correct answer)
- Refusing service to all high-risk customers to eliminate risk entirely
- Filing a SAR for every transaction that exceeds $1,000
Correct answer: Allocating resources and controls proportionate to the level of money laundering risk identified
A risk-based approach focuses more intensive due diligence and monitoring on higher-risk customers and transactions while applying standard controls to lower-risk ones.
ACAMS Basic 2
Under the Bank Secrecy Act, at what dollar threshold must a financial institution file a Currency Transaction Report (CTR)?