Best ACAMS CAMS7 Exam Practice Material Updated on Sep 09, 2026
New CAMS7 Actual Exam Dumps, ACAMS Practice Test
NEW QUESTION # 233
Which of the following are AML risks associated with onboarding a high-risk customer? (Select Two.)
- A. Increased likelihood of engaging in financial crimes
- B. Enhanced customer due diligence requirements
- C. Reduced regulatory scrutiny compared to low-risk customers
- D. Greater potential for laundering illicit proceeds
Answer: A,D
Explanation:
High-risk customers present elevated money laundering and terrorist financing risks, requiring careful consideration before onboarding. FATF guidance emphasizes that higher-risk relationships demand stronger controls due to their increased vulnerability to misuse.
One key risk is the greater potential for laundering illicit proceeds. High-risk customers may operate in sectors, jurisdictions, or business models that are frequently abused for financial crime, increasing the likelihood that illicit funds could pass through the institution.
Another significant risk is the increased likelihood of involvement in financial crimes, either directly or indirectly. This may include exposure to corruption, fraud, sanctions evasion, or organized crime networks.
Enhanced due diligence is not a risk but rather a risk-mitigating control imposed by regulators.
Reduced regulatory scrutiny is incorrect, as high-risk customers are subject to greater--not lesser-
-oversight.
NEW QUESTION # 234
An AML analyst at a bank is investigating cases triggered by transaction monitoring alerts.
Which circumstances might cause the analyst to suspect a case involves terrorist financing? (Select Two.)
- A. Transactions involving domestic non-profit organizations providing charitable aid to refugees from higher-risk countries
- B. Small dollar payments sent to crowdfunding initiatives with detailed descriptions of the project being financed
- C. Transactions involving non-profit organizations with no internet presence
- D. Small dollar payments sent to higher-risk jurisdictions with no prior history
- E. Transactions involving structured currency deposits below the reporting threshold to avoid paying taxes
Answer: C,D
NEW QUESTION # 235
In order to prevent financial crime risk, the implemented policies, controls, and procedures must:
- A. include sophisticated and automated controls that use the newest types of technology available (for example, artificial intelligence (Al) and machine learning).
- B. be completed by the business and validated by an external firm (for example, an auditing or consulting firm)
- C. be created approved, and owned only by the First Line of Defense business team, and reviewed annually
- D. be proportionate with regard to the size and nature of the firm, approved by senior management, and regularly reviewed
Answer: D
Explanation:
Policies, controls, and procedures must be proportionate to the size and nature of the firm, approved by senior management, and regularly reviewed to ensure they remain effective in preventing and mitigating financial crime risk while aligning with regulatory expectations.
NEW QUESTION # 236
Financial Intelligence Units (FIUs) help to protect financial integrity by: (Select Two.)
- A. Disseminating information on emerging trends related to money laundering and associated predicate offenses
- B. Assisting financial institutions with designing products and services that lower residual money laundering risk
- C. Ensuring financial institutions maintain appropriate AML programs commensurate with their risk profiles
- D. Receiving and analyzing Suspicious Activity Reports (SARs) to detect financial crime
Answer: A,D
Explanation:
Financial Intelligence Units (FIUs) play a central role in national and international AML/CFT frameworks.
According to FATF standards, FIUs are responsible for the receipt, analysis, and dissemination of financial intelligence related to suspected money laundering, terrorist financing, and predicate offenses.
One core function of an FIU is receiving and analyzing SARs submitted by financial institutions and other obliged entities. Through analysis of reported information, FIUs identify suspicious patterns, trends, and networks that may indicate financial crime.
Another key function is disseminating intelligence and typologies to competent authorities and, where appropriate, to the private sector. This includes sharing insights on emerging risks, new money laundering methods, and evolving threat trends, which enhances system-wide financial integrity.
FIUs do not design financial products for institutions, nor do they supervise AML programs-that responsibility lies with AML supervisory authorities. Their role is intelligence-focused rather than regulatory or commercial.
NEW QUESTION # 237
What is the PRIMARY purpose of suspicious activity reporting requirements?
- A. Reduce operational expenses
- B. Increase customer acquisition
- C. Improve foreign exchange profits
- D. Assist authorities in detecting financial crime
Answer: D
Explanation:
Suspicious activity reports provide law enforcement and regulators with intelligence related to possible money laundering, terrorist financing, fraud, and other financial crimes. These reports help identify criminal networks, transaction patterns, and emerging risks. Filing obligations are central to the effectiveness of national AML frameworks.
NEW QUESTION # 238
Which characteristic of accountants is most attractive to those looking to launder funds using an accountant or accountancy firm?
- A. Accountants are knowledgeable about financial management, including what to record over the course of the accounting year
- B. Accountants are able to create and structure companies, falsify accounts and manipulate financial statements
- C. Accountants can prepare ledgers and spreadsheets, draft annual returns and make payments to government offices
- D. Accountants can advise on the structuring of companies as well as ensure compliance with local tax regulations
Answer: B
Explanation:
Criminals may target accountants because they have the capability to create and structure companies, falsify accounts, and manipulate financial statements, which can be exploited to disguise illicit funds and facilitate money laundering.
NEW QUESTION # 239
A compliance officer reviews an alert involving unusually high cryptocurrency transfers. What is the MOST important consideration?
- A. Whether the transfers occur during business hours
- B. Whether the customer prefers mobile applications
- C. Whether customer activity aligns with expected profile and source of wealth
- D. Whether blockchain technology eliminates AML risk
Answer: C
Explanation:
Cryptocurrency activity should be assessed in the context of the customer's known financial profile, occupation, and source of wealth. Significant unexplained virtual asset transactions may indicate laundering, fraud, sanctions evasion, or other financial crimes requiring enhanced investigation.
NEW QUESTION # 240
Which of the following statements is true regarding Office of Foreign Assets Control (OFAC) sanctions? (Select Two.)
- A. Blocked funds must be placed into an interest-bearing account on a financial institution's books
- B. Sanctions can only be placed on certain individuals in foreign countries as designated by OFAC
- C. Sanctions can be either comprehensive or selective using the blocking of assets and trade restrictions to accomplish foreign policy and national security goals
- D. OFAC sanctions automatically expire after five years unless renewed by Congress
Answer: A,C
Explanation:
OFAC sanctions are a key element of the U.S. AML/CFT framework. According to the CAMS 6th Edition and OFAC regulations:
Blocked funds must be placed into an interest-bearing account on a financial institution's books (B):"Blocked property must be held in a separate interest-bearing account on the books of the U).S. financial institution." Sanctions can be either comprehensive or selective using the blocking of assets and trade restrictions (C):"OFAC administers both comprehensive and targeted (selective) sanctions programs to fulfill U.S. foreign policy and national security goals."
NEW QUESTION # 241
According to the Financial Action Task Force (FATF) methodology, which situations would require a financial institution (FI) to consider filing a suspicious activity report?
- A. A transaction involves funds exchanged from crypto to fiat currencies.
- B. A FI identifies the payer is a dealer in precious metals or stones.
- C. A FI is unable to verify the relevant customer due diligence documents.
- D. A beneficiary of a transaction is a politically exposed person.
Answer: C
NEW QUESTION # 242
A compliance officer at a financial institution has completed an investigation into a high-risk customer's activities and determined that there are strong indications of money laundering. The compliance officer has documented their findings and is ready to recommend offboarding the customer. However, the relationship manager responsible for the customer is resistant to the idea, citing the customer's significant revenue contribution to the institution.
What should the compliance officer do next to ensure the appropriate escalation and decision-making process is followed?
- A. Proceed with offboarding the customer unilaterally based on their investigation findings and anti-money laundering (AML) concerns
- B. Escalate the matter to the institution's high-risk client committee, presenting the investigation findings and recommending offboarding while also acknowledging the relationship manager's concerns
- C. Delay the offboarding decision and continue monitoring the customer's activities, waiting for further evidence to solidify the case for termination
- D. Attempt to persuade the relationship manager to agree with the offboarding recommendation by highlighting the potential reputational and regulatory risks associated with maintaining the relationship
Answer: B
Explanation:
In situations involving significant AML concerns, especially with high-risk clients, thecompliance officer must follow proper escalation procedureswithin the institution. The appropriate course of action is toescalate the matter to a senior governance body, such as ahigh-risk client committee, which is typically tasked with balancing AML risk against business considerations.
Unilateral offboarding (Option B)may violate internal protocols.
Persuading the relationship manager (Option C)bypasses formal governance.
Delaying action (Option D)risks further exposure to regulatory or reputational damage.
This escalation ensuresdocumented risk-based decision-makingand demonstrates to regulators that the institution appliesstructured and objective AML governance.
Reference: ACAMS CAMS Study Guide - 6th Edition, Chapter:Compliance Governance and Risk Escalation Processes- Section:Governance Structures for High-Risk Customers
NEW QUESTION # 243
A bank has been fined for failing to take reasonable care to establish and maintain effective systems and controls for high-risk customers, including politically exposed persons (PEPs).
Which typical financial crime risks should the bank have addressed? (Choose three.)
- A. Ensuring an employee is responsible for liaison with the authorities on matters related to countering the finance of terrorism
- B. Gathering sufficient information to establish the source of funds and source of wealth
- C. Assessing and reviewing the minutes of the relevant committee responsible for onboarding customers
- D. Ensuring that resources in its compliance and AML areas kept pace with the bank's growth
- E. Assessing the level of money laundering risk posed by prospective and existing high-risk customers
Answer: B,D,E
Explanation:
For high-risk customers, including PEPs, the bank should have gathered adequate information on the source of funds and wealth, assessed the money laundering risk of each customer, and ensured compliance and AML resources scaled with business growth to maintain effective systems and controls.
NEW QUESTION # 244
Which of the following best describes the degree of cooperation between regulatory authorities, law enforcement agencies, and Financial Intelligence Units (FIUs) during money laundering investigations, including cross-border cases?
- A. Law enforcement agencies and FIUs only cooperate during domestic investigations, leaving cross-border investigations to international organizations like INTERPOL.
- B. Regulatory authorities, law enforcement agencies, and FIUs share intelligence and coordinate efforts to streamline cross-border money laundering investigations, often through formal agreements.
- C. FIUs primarily handle reporting from financial institutions, while regulatory authorities and law enforcement agencies are limited to enforcing domestic AML laws without international cooperation.
- D. Regulatory authorities primarily work independently but share information when requested by international law enforcement agencies.
Answer: B
Explanation:
"Cooperation and coordination between regulatory authorities, law enforcement agencies, and FIUs are essential for effective AML investigations, especially in cross-border cases. This is often accomplished through formal agreements, MOUs, and information-sharing mechanisms."
NEW QUESTION # 245
According to the Egmont Group, which benefits do public-private partnerships (PPPs) provide to Financial Intelligence Units (FIUs)? (Select Three.)
- A. Helping to alleviate the financial cost burden on law enforcement
- B. Offering flexibility, agility, and opportunities to adjust to the ML/TF threat environment
- C. Helping overcome data protection and information sharing limitations
- D. Helping to design common approaches and identify desired deliverables
- E. Enhancing the quality of reporting and additional informational input
Answer: B,C,E
Explanation:
According to the Egmont Group and CAMS 6th Edition, PPPs benefit FIUs by:
A: "PPPs help address challenges around data protection and facilitate information sharing between public and private sectors, overcoming common legal barriers." B: "PPPs result in higher-quality reports from the private sector and provide valuable additional informational input for FIUs." E: "These partnerships give FIUs increased flexibility and agility, allowing them to respond dynamically to evolving ML/TF threats."
NEW QUESTION # 246
A compliance officer at a large bank has been tasked with investigating a series of unusual transactions involving a long-time customer. The customer has made several large cash deposits into multiple accounts within a short period, raising red flags. After gathering and analyzing transaction data, reviewing customer records, and cross-referencing external sources, the compliance officer determines that there is a reasonable suspicion of money laundering. As part of documenting this investigation, the compliance officer must decide how and when to escalate the matter internally and whether to file a suspicious activity report (SAR).
What is the next critical step in this process?
- A. Document the customer's transaction history and keep the investigation confidential until further suspicious activity is detected.
- B. Draft a SAR that includes a detailed chronology of the transactions, customer background and the rationale for suspicion, and submit it to the relevant financial intelligence unit (FIU) within the regulatory timelines.
- C. Immediately escalate the case to senior management, recommending the closure of the customer's accounts due to potential reputational risk.
- D. Report the investigation to external auditors and await further guidance before taking any action.
Answer: B
Explanation:
Once there is reasonable suspicion of money laundering, the next critical step is to draft and file a suspicious activity report (SAR) with the relevant financial intelligence unit within the required regulatory timeframe.
The SAR should contain a clear chronology of transactions, relevant customer details, and the rationale for suspicion to support potential investigation by authorities.
NEW QUESTION # 247
The relationship manager in the corporate banking department at a bank is required to take specialized AML training tailored to the risks the department is most likely to encounter.
Which types of content are most appropriate for this training? (Select Two.)
- A. Money laundering typologies applicable to monetary instrument reporting
- B. Regulatory exam best practices
- C. Applicable AML laws and regulations
- D. Money laundering typologies applicable to corporate loans
Answer: C,D
Explanation:
Specialized AML training must be relevant to the specific risks the corporate banking team faces, including legal/regulatory expectations and the ML/TF typologies applicable to their products and customer base.
* Applicable AML laws and regulations (B):"Staff must be aware of the applicable AML/CFT laws and regulatory requirements relevant to their business area."(CAMS 6th Edition, Chapter: AML Training and Awareness)
* Money laundering typologies applicable to corporate loans (D):"Training should include typologies and red flags that are most relevant to the risks present in the specific business line, such as corporate lending."(CAMS 6th Edition, AML Training for High-Risk Departments) Incorrect Options:
* A: Monetary instrument reporting is more relevant to retail/branch banking.
* C: Regulatory exam best practices are for compliance teams, not business-line relationship managers.
References:
CAMS 6th Edition, AML Training and Awareness
FATF Guidance: Risk-Based Approach to Banking Sector
NEW QUESTION # 248
Which control is MOST effective for identifying suspicious correspondent banking relationships?
- A. Limiting ATM withdrawals
- B. Reviewing branch operating hours
- C. Reducing customer service interactions
- D. Conducting due diligence on respondent institutions
Answer: D
Explanation:
Correspondent banking relationships can expose institutions to significant AML risks, especially when respondent banks operate in high-risk jurisdictions. Comprehensive due diligence helps assess ownership structure, AML controls, regulatory history, and reputational concerns. Effective due diligence reduces the likelihood that correspondent accounts will be used for illicit financial activity.
NEW QUESTION # 249
Which technologies are commonly used to help financial institutions (FIs) navigate privacy and data protection regulations while securely sharing client information with private third-party entities? (Choose two.)
- A. Cloud storage solutions for efficient data handling and management
- B. Artificial intelligence (AI) to automating compliance processes like data anonymization and secure sharing
- C. Blockchain to ensure traceability and security in shared data transactions
- D. Privacy-enhancing technologies (PETs) to enable secure and privacy-compliant data sharing
- E. Data encryption to protect sensitive information from unauthorized access
Answer: D,E
Explanation:
Data encryption protects sensitive information from unauthorized access, while privacy-enhancing technologies (PETs) enable secure and compliant data sharing with third parties, helping financial institutions meet privacy and data protection regulations.
NEW QUESTION # 250
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