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AML Compliance Programs Flashcards

6 cards from real CAMS practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

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  1. What are the four pillars of a Bank Secrecy Act (BSA) compliance program?

    Answer: Internal controls, independent testing, designated compliance officer, training

    The four pillars of a BSA/AML compliance program are internal controls, independent testing (audit), a designated compliance officer, and ongoing training for employees.

  2. Which U.S. law is the cornerstone of the anti-money laundering regulatory framework and requires financial institutions to maintain records and file reports?

    Answer: Bank Secrecy Act (BSA)

    The Bank Secrecy Act of 1970 is the primary U.S. AML law requiring financial institutions to file Currency Transaction Reports (CTRs), Suspicious Activity Reports (SARs), and maintain records that assist law enforcement.

  3. What is the primary purpose of an independent AML audit function?

    Answer: To objectively assess the effectiveness of the AML compliance program

    An independent AML audit objectively evaluates whether the institution's AML program is effective, identifying gaps and weaknesses that management may have missed.

  4. Under the USA PATRIOT Act, which section requires financial institutions to establish a Customer Identification Program (CIP)?

    Answer: Section 326

    Section 326 of the USA PATRIOT Act requires financial institutions to establish a Customer Identification Program to verify customer identities at account opening.

  5. What does a risk-based approach to AML compliance primarily mean?

    Answer: Allocating compliance resources proportional to the identified level of money laundering risk

    A risk-based approach means directing the most resources and scrutiny to the highest-risk customers, products, and geographies rather than applying uniform controls across the board.

  6. Which federal agency is primarily responsible for enforcing the Bank Secrecy Act and AML regulations for banks in the U.S.?

    Answer: FinCEN

    The Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Treasury, is the primary administrator and enforcer of the Bank Secrecy Act and related AML regulations.