Updated Aug 14, 2026 Certification Exam CAMS7 Dumps - Practice Test Questions
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NEW QUESTION # 221
Which of the following is a key consideration for a global organization when managing AFC and sanctions compliance across multiple jurisdictions?
- A. Ensuring group policies and procedures prioritize adherence to US regulations because they are the most influential worldwide
- B. Ensuring group policies cater to compliance with each country's specific AML and sanctions regulations
- C. Ensuring sanctions compliance by relying solely on international bodies like the UN because there is no requirement to adhere to local laws
- D. Applying global AFC and sanctions policies to ensure consistency without the need to adapt to local regulations
Answer: B
Explanation:
Global organizations must ensure their policies and procedures comply with local laws and regulations in each country where they operate, even when maintaining group-wide consistency. Relying solely on international or U.S. standards does not ensure compliance with all local requirements, which may be more stringent or specific.
"A global group-wide program should ensure adherence to local AML and sanctions laws and regulations in every jurisdiction in which it operates. Local adaptation of policies is essential to address jurisdiction-specific risks and legal requirements." (CAMS 6th Edition, International AML/CFT Standards; FATF Recommendations 18, 35; EU & US Sanctions Regulations) References:
CAMS 6th Edition, Compliance Across Jurisdictions
FATF Recommendation 18: Internal Controls and Foreign Branches
Basel Committee on Banking Supervision (BCBS) Guidance
NEW QUESTION # 222
News published in Country A reports that a politically exposed person (PEP) had received a bribe from a transnational company headquartered in a developing country of approximately USS1.5 million deposited into on account at a financial institution (Fl> located in Country B Both countries are members of the Egmont Group The account where the money was deposited belongs to the PEP's immediate family member. To corroborate the facts, the PIU of Country A sent a formal request via secure communication channels for further information from its counterpart FIU in Country B. According to Egmont principles, the FIU of Country B can:
- A. provide the information available to them because the exchange is between two FlUs that are members of the Egmont Group, and the formal request was made using secure communication channels.
- B. direct the FIU of Country A to the Fl where the account was opened for further information.
- C. provide the requested information only if a memorandum of understanding (MoU) is signed between Country A and Country
- D. deny the request if the FIU of Country B has not received a suspicious activity report (SAR) from the Fl where the account was opened.
Answer: A
NEW QUESTION # 223
The Financial Intelligence Unit (FIU) in a country has received a suspicious activity report (SAR) which involves significant suspicious fund transfers, not only within its jurisdiction but also in a foreign country. Further information is required from the foreign country to determine whether the matter needs to be referred for prosecution locally. Which of the following statements is true in this scenario?
- A. Countries that are members of the Egmont Group can request assistance for information from each other
- B. Any information related to money laundering can be received from any organization at any time regardless of jurisdiction
- C. It is against international laws on data protection to access information from foreign countries
- D. Sovereignty of nations means that information cannot be accessed from foreign countries
Answer: A
Explanation:
Countries that are members of the Egmont Group can securely exchange information between their Financial Intelligence Units (FIUs) to support money laundering and terrorist financing investigations, even when the activity involves multiple jurisdictions.
NEW QUESTION # 224
Which control would be most effective as part of a risk-based approach (RBA) to managing AML/CFT risk for a bank established in the EU that also has a branch in a high-risk third country outside of the EU?
- A. Automatically apply enhanced customer due diligence measures to all customers in the high-risk third- country branch regardless of risk level
- B. Apply tailored due diligence measures, based on the level of risk posed by each customer following risk assessment
- C. Fully rely on central beneficial owner registry records in the high-risk third country to determine the ultimate beneficial owners of all customers
- D. Monitor every cross-border transaction in real time, flagging all for enhanced scrutiny due to the country risk level
Answer: B
Explanation:
As part of a risk-based approach, the bank should apply tailored due diligence measures based on the assessed risk level of each customer. This ensures resources are focused where they are most needed, rather than applying uniform enhanced measures to all customers, which can be inefficient and unnecessary.
NEW QUESTION # 225
The recently appointed senior money laundering reporting officer (MLRO) at a newly opened small digital bank has been instructed by the group chief compliance officer to implement an effective AML transaction monitoring system that can identify unusual and suspicious transactions.
What are important considerations for the project to select and implement the AML transaction monitoring system at the digital bank? (Select Two.)
- A. Whether the monitoring system can be configured to enable the bank to execute trend analysis of transaction activity and to identify unusual business relationships and transactions
- B. Whether the monitoring system is adequate with respect to the bank's size, activities, complexity, and risks
- C. Whether the permissions and user access settings for reviewing, investigating, and reporting details of alerts generated by the system are commensurate with those in use at other banks
- D. Whether the vendor has documented appropriate internal controls for designing system and data integration schema
Answer: A,B
Explanation:
C: "The system must be adequate and proportionate to the bank's size, activities, complexity, and risk profile.
A one-size-fits-all solution is not appropriate."
D: "Effective monitoring systems should support the detection of unusual trends and business relationships, facilitating meaningful analysis and alerts."(CAMS 6th Edition, Transaction Monitoring System Requirements) Incorrect:
A: Vendor internal controls are important, but not a top selection criterion for AML system effectiveness.
B: Permissions should be appropriate for the bank's structure, not just compared to other banks.
References:
CAMS 6th Edition, Selecting and Implementing Monitoring Systems
NEW QUESTION # 226
Which of the following is a benefit of public-private partnerships (PPP)?
- A. Sourcing of key resources
- B. Rapid exchange of information on risks and high-risk activities or persons
- C. Ensuring understanding of politically exposed persons (PEPs)
- D. Obtaining salaries in the financial industry
Answer: B
Explanation:
Public-private partnerships (PPPs) are a key component of modern AML/CFT frameworks and are strongly encouraged by FATF and national regulators. Their primary benefit lies in enhancing timely and effective information sharing between financial institutions, regulators, law enforcement, and financial intelligence units (FIUs).
Through PPPs, authorities can share typologies, red flags, and emerging threat intelligence, while private institutions contribute operational insights derived from real transaction data. This rapid exchange of information on risks, high-risk activities, and suspicious actors significantly improves the detection and prevention of money laundering and terrorist financing.
PPPs do not exist to source staffing resources, provide salaries, or ensure basic understanding of regulatory concepts such as PEPs, which are already addressed through standard AML requirements. Their true value is the speed, quality, and relevance of shared intelligence, allowing participants to respond more effectively to evolving financial crime threats.
NEW QUESTION # 227
In what ways is the finance industry vulnerable to the risks of money laundering? (Select Three.)
- A. It offers complex financial products, which can make it easier to obscure the source of funds
- B. It has high transaction volumes, making it difficult to identify suspicious activities and track the origin of funds
- C. It is frequently engaged with high-risk jurisdictions, which can increase exposure to financial crime or weak regulatory oversight
- D. It invests in new technology and systems to ensure effective and timely detection of financial crime
- E. It is subject to heightened regulatory obligations with strict reporting requirements to safeguard the financial system from illicit fund flows and ensure market stability
Answer: A,B,C
Explanation:
The finance industry is inherently vulnerable to money laundering risks due to the nature, scale, and complexity of its operations. FATF and global regulators consistently identify several structural characteristics that increase exposure to illicit financial activity.
One major vulnerability is the availability of complex financial products and services, such as derivatives, correspondent banking, and structured investments. These products can be misused to disguise the origin of funds through layering and complex transaction chains.
Another key risk arises from engagement with high-risk jurisdictions. Financial institutions often operate across borders, including in countries with weak AML controls or limited regulatory oversight, increasing exposure to money laundering and terrorist financing risks.
Additionally, high transaction volumes present a significant challenge. The sheer scale and speed of transactions make it difficult to detect suspicious activity, particularly when illicit transactions are deliberately structured to blend in with legitimate activity.
In contrast, heightened regulatory obligations and investments in technology are risk-mitigating factors, not vulnerabilities. They are designed to reduce exposure to financial crime rather than increase it.
NEW QUESTION # 228
A credit institution has been served with a preliminary findings report highlighting major deviations from AML obligations and stating that it faces the possible withdrawal of its banking license.
Which authority could have issued the report?
- A. A banking sector self-regulatory body
- B. Law enforcement authority
- C. AML supervisory authority
- D. Financial Action Task Force (FATF)
Answer: C
Explanation:
An AML supervisory authority is responsible for overseeing compliance with AML/CFT obligations and has the legal power to conduct inspections, issue findings, impose sanctions, and recommend or enforce license withdrawal.
Supervisory authorities assess whether institutions comply with national AML laws and regulatory standards. When major deficiencies are identified, they may issue a preliminary findings report outlining violations and potential enforcement actions, including license revocation.
Self-regulatory bodies lack the authority to withdraw banking licenses. Law enforcement agencies investigate criminal activity but do not supervise institutions or issue compliance findings reports.
FATF is an international standard-setting body and does not conduct institution-level enforcement or issue sanctions.
Therefore, only an AML supervisory authority could issue such a report.
NEW QUESTION # 229
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. Small dollar payments sent to higher-risk jurisdictions with no prior history
- B. Transactions involving domestic non-profit organizations providing charitable aid to refugees from higher-risk countries
- C. Small dollar payments sent to crowdfunding initiatives with detailed descriptions of the project being financed
- D. Transactions involving non-profit organizations with no internet presence
- E. Transactions involving structured currency deposits below the reporting threshold to avoid paying taxes
Answer: A,D
NEW QUESTION # 230
Which of the following are part of a risk-based approach? (Select Three.)
- A. Allocating resources equally across all customer segments to ensure fairness
- B. Determining detailed risk profiles for customers based on their activities and relationships
- C. Performing a comprehensive risk assessment to identify customer, transaction, and geographic risks
- D. Choosing and applying effective controls that align with the identified risk levels
- E. Focusing monitoring primarily on previously flagged customers while using standard controls for others
Answer: B,C,D
Explanation:
A risk-based approach is central to AML/CFT programs and includes:
* A: Creating detailed risk profiles for customers based on their behaviors and connections.
* C: Applying controls that are tailored to the actual risk (not a one-size-fits-all approach).
* D: Performing a thorough risk assessment, considering customer, transaction, and geographic factors.
"A risk-based approach involves risk profiling, tailored controls, and comprehensive risk assessment across key risk factors." (CAMS 6th Edition, Risk-Based Approach and Risk Assessment) Incorrect:
* B: Monitoring only flagged customers is not sufficient.
* E: Equal allocation of resources ignores differing risk levels.
References:
CAMS 6th Edition, AML Compliance Program
FATF Recommendation 1: Risk-Based Approach
NEW QUESTION # 231
A bank notices inconsistent flagging of blockchain transactions due to the lack of standardized payment message formats. What feature should be prioritized in the transaction screening tool to address this issue?
- A. Integration with blockchain analytics providers
- B. Periodic manual review of blockchain-related transactions
- C. Enhanced sanctions screening for traditional payment messages
- D. Rule-based systems focusing only on known wallet addresses
Answer: A
Explanation:
Blockchain transactions differ fundamentally from traditional payments because they lack standardized messaging formats such as SWIFT MT or ISO 20022. As a result, conventional screening tools may struggle to consistently detect risks.
Integration with blockchain analytics providers allows institutions to enrich raw blockchain data with contextual intelligence, including wallet attribution, transaction flows, exposure to illicit services, sanctions-linked wallets, and typologies such as mixers and tumblers.
This integration enhances consistency, improves risk detection, and supports sanctions and AML obligations specific to virtual assets. Manual review is not scalable, and focusing only on known wallet addresses creates blind spots. Enhancing traditional payment screening does not address blockchain-specific challenges.
NEW QUESTION # 232
Which measures should be implemented to facilitate collaboration among different risk management functions to enhance an organization's anti-financial crime (AFC) program? (Select Three.)
- A. Develop cross-functional training programs on AFC risks, management strategies, and related technologies
- B. Establish a robust framework for continuous threat intelligence sharing
- C. Have senior management accountability for AFC failures
- D. Develop common metrics and key performance indicators
- E. Establish a reward program among risk management functions to encourage proactive controls
Answer: A,B,D
Explanation:
An effective anti-financial crime (AFC) program relies on strong collaboration across risk management functions, including AML, fraud, sanctions, cybersecurity, and operational risk.
Regulatory guidance encourages integrated approaches to managing financial crime risk.
A framework for continuous threat intelligence sharing allows different functions to exchange insights on emerging risks, typologies, and vulnerabilities, improving the organization's ability to detect and respond to threats holistically.
Cross-functional training programs help ensure that staff across risk functions understand AFC risks, regulatory expectations, and the tools used to manage them. This fosters consistency and breaks down silos within the organization.
Developing common metrics and key performance indicators (KPIs) aligns objectives across functions and enables management to assess program effectiveness consistently.
While senior management accountability is essential for governance, it does not directly facilitate collaboration among risk functions. Reward programs are not standard or recommended measures in regulatory guidance for enhancing AFC collaboration.
NEW QUESTION # 233
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 # 234
Which action could be taken by an organization to better understand the threats faced from proliferation financing?
- A. Read and analyze the most recent National Proliferation Financing Risk Assessment produced by the relevant body of the organization's jurisdiction
- B. Undertake a detailed review of all payment-related transactions to any clients identified as defense contractors, paying special attention to the beneficial owners of those clients
- C. Review the organization's sanction risk assessment to better understand the potential for exposure to Russia and the Democratic People's Republic of Korea
- D. Work with the front-line to understand their strategic growth targets specifically aimed at increasing their market share around military technology and dual-use products
Answer: A
Explanation:
Analyzing the most recent National Proliferation Financing Risk Assessment from the relevant authority provides an organization with authoritative, up-to-date insights into current threats, high-risk sectors, and jurisdictional exposures, enabling better understanding and mitigation of proliferation financing risks.
NEW QUESTION # 235
There are three types of factors that can be used to authenticate someone ownership, knowledge, and inherent factors.
Which of the following factors falls under inherent factors?
- A. Fingerprint
- B. Challenge-response
- C. Security token
- D. Passphrase
Answer: A
Explanation:
Fingerprint is an inherent factor because it is a biometric trait - something the user is. Inherent factors rely on physical or behavioral characteristics such as fingerprints, facial recognition, or voice, which are unique to the individual.
NEW QUESTION # 236
An institution outsources part of its AML monitoring process to a third-party vendor. Who remains ultimately responsible for AML compliance?
- A. The third-party vendor exclusively
- B. The regulator only
- C. The customer relationship manager alone
- D. The financial institution's management
Answer: D
Explanation:
Financial institutions remain responsible for AML compliance even when operational functions are outsourced. Senior management and the institution must ensure vendors maintain adequate controls, data protection, monitoring quality, and regulatory compliance. Outsourcing does not transfer legal accountability to third parties.
NEW QUESTION # 237
Artificial intelligence (AI) and machine learning (ML) procedures help in applying a risk-based approach in AML compliance through: (Select Three.)
- A. Identification of links among apparently unrelated clients who have established complex networks for money laundering
- B. Advanced customer risk assessments that synthesize client background information with additional data
- C. Automatically generating Suspicious Activity Reports (SARs) without the need for human review
- D. Automatically adapting risk thresholds for customers without any human intervention
- E. Detection of complex money laundering patterns in transactions
Answer: A,B,E
Explanation:
Artificial intelligence and machine learning technologies support the risk-based approach (RBA) to AML compliance by enhancing an institution's ability to identify, assess, and prioritize financial crime risks. Regulatory guidance emphasizes that these technologies should augment--not replace--human judgment.
One key benefit is advanced customer risk assessment. AI and ML can synthesize large volumes of customer data, including background information, transaction behavior, and external risk indicators, allowing institutions to develop more accurate and dynamic risk profiles.
AI and ML also enable the identification of complex networks among seemingly unrelated clients.
Through network analytics and pattern recognition, these tools can uncover hidden relationships used in layering and structuring activities.
Additionally, AI-driven systems excel at detecting complex money laundering patterns within transaction data that may not trigger traditional rule-based alerts, improving effectiveness and efficiency.
Automatically generating SARs or adapting thresholds without human oversight is inconsistent with regulatory expectations. Human review and governance remain essential components of AML compliance.
NEW QUESTION # 238
When deciding on the fuzzy matching threshold for sanctions screening, consideration should be given to:
- A. the experience of the team dealing with potential matches.
- B. the value of fines for non-compliance.
- C. the operational burden of dealing with potential matches.
- D. whether the data to be screened is reliable and verified.
Answer: D
Explanation:
When setting a fuzzy matching threshold for sanctions screening, it is crucial to consider the reliability and accuracy of the data being screened. High-quality, verified data supports more effective matching and reduces both false positives and the risk of missing true matches.
NEW QUESTION # 239
In which of the following scenarios should the customer be deemed to have an overly complex ownership structure?
- A. A customer that is owned by two families with the involvement of over a dozen owners within the families
- B. A privately held company owned by two individuals whose interests are held by a series of trusts and foundations
- C. A multinational correspondent bank that has three layers of ownership between it and a publicly traded bank holding company
- D. A trust set up with two co-trustees, one of whom is the grantor and the other is a corporate service provider
Answer: B
Explanation:
AML/CFT guidance from FATF emphasizes that overly complex ownership structures are a key red flag when they appear unnecessary for legitimate business purposes and may be designed to obscure beneficial ownership.
A privately held company owned by two individuals whose interests are held through multiple layers of trusts and foundations represents an unnecessarily complex structure. Trusts and foundations are frequently identified in AML typologies as vehicles that can be misused to conceal the true beneficial owners, especially when layered without clear commercial rationale. This complexity increases the risk of money laundering and necessitates enhanced due diligence.
By contrast, a trust with two co-trustees, including the grantor and a professional service provider, is common and not inherently complex. Similarly, family-owned businesses with many shareholders may be complex but are not automatically deemed "overly complex" if ownership is transparent. Multinational banks with layered ownership tied to a publicly traded holding company are also common and subject to regulatory oversight.
Therefore, the use of multiple trusts and foundations without clear justification is the clearest indicator of an overly complex ownership structure.
NEW QUESTION # 240
What is the PRIMARY purpose of sanctions screening systems?
- A. Increase customer marketing opportunities
- B. Identify prohibited individuals, entities, or transactions
- C. Reduce payment processing speed
- D. Replace customer onboarding entirely
Answer: B
Explanation:
Sanctions screening systems help institutions identify customers, counterparties, or transactions involving sanctioned individuals, organizations, or jurisdictions. Effective screening supports compliance with international sanctions regimes and reduces the risk of facilitating prohibited financial activity.
NEW QUESTION # 241
An internal audit team is reviewing the anti-financial crime (AFC) program of its firm.
Which of the following attributes of the third line of defense would be most critical to ensure unbiased and effective oversight?
- A. Periodic training of the function
- B. Consistency of approach
- C. Qualification of the team
- D. Independent testing
Answer: D
Explanation:
Independent testing is critical for the third line of defense to provide unbiased and effective oversight, ensuring that reviews and audits are objective and free from influence by the first or second lines of defense.
NEW QUESTION # 242
When making an independent determination on whether to close an account based on an internal Investigation, a financial institution (F1) should consider. (Select Five.)
- A. the legal basis for closing the account.
- B. the seriousness of the underlying conduct.
- C. the Fl's policies and procedures.
- D. correspondence with law enforcement
- E. reputational risk.
- F. the frequency of account activity
- G. the customers personal relationships.
Answer: C,E
NEW QUESTION # 243
Which of the following are important AML controls for a compliance manager of a regulated asset management company in the European Union to implement? (Select Two.)
- A. Producing financial stability reports on interesting customers
- B. Rejecting any politically exposed persons (PEPs) as customers
- C. Inviting prospective customers for an onboarding interview
- D. Performing negative news checks of prospective customers
- E. Understanding the source and origin of assets
Answer: D,E
Explanation:
Understanding the source and origin of assets (C):According to the CAMS 6th Edition (Chapter: Customer Due Diligence and Enhanced Due Diligence) and the EU 4th & 5th AML Directives, regulated entities are required to take adequate measures to understand the source of funds and the origin of assets of their customers, especially when there are higher risk factors such as large transactions or PEPs."Firms must identify the source and origin of assets to ensure they are not the proceeds of crime or corruption, particularly for higher-risk customers."(CAMS 6th Edition, CDD/EDD Requirements; EU Directive 2015/849, Article 20) Performing negative news checks of prospective customers (D):Adverse media screening is an essential part of the onboarding process for identifying potential risks related to money laundering, terrorist financing, or reputational harm."Negative news or adverse media checks form a vital component of the due diligence process, helping organizations detect links to criminal or suspicious activities."(CAMS 6th Edition, CDD
/EDD Requirements)
Incorrect Options:
A: Onboarding interviews may be part of EDD, but are not a standard or required AML control.
B: PEPs are not to be automatically rejected; instead, enhanced due diligence should be applied.
E: Producing financial stability reports is not an AML control, but may be relevant for credit or investment assessment.
References:
CAMS Study Guide 6th Edition, Customer Due Diligence
EU 4th AML Directive (Directive 2015/849/EU)
EU 5th AML Directive (Directive 2018/843/EU)
NEW QUESTION # 244
A multinational corporation is considering expanding into a new market with a history of political instability and corruption. Which strategy would be most effective in mitigating reputational risk from a financial crime perspective associated with such an expansion?
- A. Minimizing the company's direct presence in the country to reduce exposure to potential risks
- B. Ensuring the company has strong ties with local government officials to influence policy and avoid negative scrutiny
- C. Committing to open communication, ethical practices, and community engagement to build trust with stakeholders
- D. Ensure the jurisdiction risks and other relevant factors have been taken into consideration in the EWRA and the residual risks are within the corporation's risk appetite
- E. Partnering with established local businesses to leverage their knowledge and connections while sharing risks
Answer: D
Explanation:
The most effective strategy is to ensure that jurisdictional and other relevant risks are assessed through the Enterprise-Wide Risk Assessment (EWRA), and that any residual risks fall within the corporation's defined risk appetite. This structured, risk-based approach supports informed decision-making and protects against reputational damage related to financial crime.
NEW QUESTION # 245
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