CAMS AML Compliance Programs 2 — Questions and Answers
Question 1: What is the minimum civil money penalty FinCEN can assess for a willful BSA violation per transaction?
- $1,000
- $5,000
- $25,000 (Correct answer)
- $1,000,000
Correct answer: $25,000
For willful BSA violations, FinCEN can assess civil money penalties of up to $25,000 per day per violation, and criminal penalties can be even higher.
Question 2: What is 'smurfing' in the context of money laundering?
- Using shell companies to hide beneficial ownership
- Structuring large cash transactions into multiple smaller ones to avoid reporting thresholds (Correct answer)
- Converting cash into virtual currency to obscure the audit trail
- Using nominees to open bank accounts on behalf of criminals
Correct answer: Structuring large cash transactions into multiple smaller ones to avoid reporting thresholds
Smurfing is a form of structuring where a large sum is broken into multiple smaller transactions, each below the $10,000 CTR threshold, to evade currency reporting requirements.
Question 3: Which element is NOT required to be included in a written AML compliance policy?
- Procedures for identifying and reporting suspicious activity
- A description of the institution's risk profile
- Names of all customers identified as high risk (Correct answer)
- Roles and responsibilities of AML compliance staff
Correct answer: Names of all customers identified as high risk
AML policies describe frameworks and procedures but do not list individual customer names; high-risk customers are managed through systems and processes, not named in policies.
Question 4: Under the BSA, what is the threshold amount that triggers mandatory Currency Transaction Report (CTR) filing?
- $5,000
- $7,500
- $10,000 (Correct answer)
- $15,000
Correct answer: $10,000
Financial institutions must file a CTR for any cash transaction exceeding $10,000 in a single business day, whether in one or multiple related transactions.
Question 5: What is the purpose of a 'gap analysis' in an AML compliance program?
- To identify customers who have gaps in their account history
- To measure the time gap between suspicious activity and SAR filing
- To identify weaknesses or deficiencies in the current AML program compared to regulatory expectations (Correct answer)
- To calculate the gap between reported and unreported income
Correct answer: To identify weaknesses or deficiencies in the current AML program compared to regulatory expectations
A gap analysis compares the institution's existing AML controls and procedures against regulatory requirements and best practices to identify areas needing improvement.
Question 6: Which of the following best describes 'willful blindness' in AML compliance?
- Deliberately failing to report known criminal activity
- Intentionally avoiding knowledge of suspicious circumstances that a reasonable person would investigate (Correct answer)
- Refusing to implement AML policies due to cost concerns
- Neglecting to update AML software for known vulnerabilities
Correct answer: Intentionally avoiding knowledge of suspicious circumstances that a reasonable person would investigate
Willful blindness (also called conscious avoidance) occurs when a person deliberately avoids learning facts that would confirm suspicious activity, and courts treat this as equivalent to actual knowledge.
CAMS AML Compliance Programs 2
What is the minimum civil money penalty FinCEN can assess for a willful BSA violation per transaction?