CAMS AML Compliance Programs 3

Question 1

What is the primary role of a Chief Compliance Officer (CCO) in an AML program?

Accepted Answer

To oversee, implement, and maintain the institution's AML compliance program

Answer

To personally review every transaction processed by the institution

Answer

To serve as the liaison between the institution and its customers

Answer

To conduct law enforcement investigations into suspected money laundering

Question 2

How often should AML policies and procedures typically be reviewed and updated?

Accepted Answer

At least annually or whenever significant regulatory changes occur

Answer

Only when required by a regulator after an examination

Answer

Every five years regardless of regulatory changes

Answer

Only when a new employee joins the compliance team

Question 3

What does the term 'de-risking' refer to in the context of AML compliance?

Accepted Answer

Financial institutions terminating or restricting relationships with entire customer categories perceived as high-risk

Answer

Reducing the risk exposure of the institution's investment portfolio

Answer

Implementing lower-risk product offerings to attract compliant customers

Answer

Training staff to identify and de-escalate high-risk transactions

Question 4

Which of the following is a key component of AML employee training programs?

Accepted Answer

Ensuring all staff understand red flags, reporting obligations, and consequences of non-compliance

Answer

Teaching employees to make investment decisions for customers

Answer

Training staff exclusively on cybersecurity procedures

Answer

Focusing training only on the legal department and senior management

Question 5

What is a 'consent order' in the context of AML enforcement?

Accepted Answer

A formal enforcement action where an institution agrees to take corrective measures under regulatory supervision

Answer

A customer's agreement to enhanced due diligence procedures

Answer

An order requiring customers to consent to transaction monitoring

Answer

A court order authorizing law enforcement to freeze suspicious accounts

Question 6

Under the BSA, how long must financial institutions retain records related to funds transfers of $3,000 or more?

Accepted Answer

5 years

Answer

1 year

Answer

3 years

Answer

7 years