Free Practice Questions for ACAMS CAMS Exam

A robust AML training program should incorporate the followingbest practicesto ensure awareness and ongoing engagement:

Option A – Tailored and regular training:

Training should berisk-based and role-specific, ensuring employees understand how AML applies to their function.

Option D – Variety and resources:

Use ofinteractive, digital, live, and scenario-based methodskeeps training effective and adaptable. Providing materials and resources supports continued learning.

Option E – Communication and measurement:

Ongoing AML awareness campaigns andfeedback mechanismshelp assess theeffectivenessof training and reinforce its importance.

Option Bis too vague and not recognized as a best practice.

Option C, while helpful, isnot sufficient alone—annual frequency without contextual or tailored content is inadequate.

Red flags include using personal accounts for business transactions (which can obscure fund tracing), preferring minimal direct interaction (potentially avoiding scrutiny), and unclear ultimate beneficial ownership (which can conceal the true controllers of the entity and facilitate illicit activity).

FATF Recommendation 29 states that an FIU should serve as a national center for the receipt and analysis of suspicious transaction reports and other information relevant to money laundering and terrorist financing.

“The FIU should serve as a national center for the receipt and analysis of suspicious transaction reports (STRs) and other information relevant to ML/TF, and for the dissemination of the results of that analysis.”

(CAMS 6th Edition, Role of the FIU; FATF Recommendation 29)

The susceptibility of a company or jurisdiction to ML/TF abuse is significantly increased by:

Permissibility of bearer shares (B):“Bearer shares make it easy to hide ownership and control, presenting a major risk for misuse by criminals.”(CAMS 6th Edition, Beneficial Ownership and Company Transparency)

Rules governing the disclosure of beneficial ownership by the jurisdiction (C):“Weak requirements or loopholes in beneficial ownership disclosure are frequently exploited to conceal criminal involvement in corporate structures.”(CAMS 6th Edition, Chapter: Legal Persons and Arrangements)

Incorrect Options:

A: High or low fees are not a significant ML/TF risk driver.

D: Ease of travel is unrelated to ML/TF risk related to company structures.

Shell companies and other high-risk business structures are commonly associated with money laundering schemes designed to obscure ownership and transaction purpose. FATF guidance identifies several red flags indicative of such misuse.

A mismatch between goods or services and the company’s stated business profile suggests fictitious or manipulated transactions. Insufficient information on originators or beneficiaries of funds transfers further increases suspicion, as transparency is a core AML requirement. Additionally, payments lacking a clear purpose or meaningful description may indicate layering or attempts to conceal illicit activity.

Conversely, well-documented transactions with established partners and legitimate audit trails are indicators of lower risk. While structuring below reporting thresholds can be suspicious, it must also be inconsistent with standard business practices to qualify as a red flag.

The United Nations Security Council (UNSC) has evolved its sanctions framework to minimize unintended humanitarian consequences. In line with international best practice, the UNSC increasingly relies on targeted sanctions, also known as “smart sanctions,” rather than broad-based measures.

Targeted sanctions are designed to focus specifically on individuals, entities, or activities responsible for threats to international peace and security. These measures may include asset freezes, travel bans, and arms embargoes directed at specific actors. By narrowing the scope, targeted sanctions aim to reduce the negative impact on innocent civilian populations and legitimate economic activity.

In contrast, comprehensive sanctions apply to entire countries or sectors and often result in significant humanitarian and economic harm. The term “comprehensive targeted sanctions” is not a recognized sanctions category.

Therefore, targeted sanctions are the preferred UNSC tool when the objective is to minimize adverse effects on civilians while maintaining pressure on responsible parties.

Regulatory frameworks and enforcement actions consistently emphasize individual accountability at the highest levels of governance when AML/CFT compliance programs are deficient in design or implementation.

The board of directors is ultimately responsible for oversight of the institution’s AML/CFT framework. This includes approving policies, setting risk appetite, and ensuring that adequate resources and governance structures are in place. Failure to fulfill these responsibilities can result in regulatory findings and personal accountability.

Senior management is responsible for implementing the board-approved AML/CFT strategy and ensuring that controls operate effectively in practice. This includes overseeing compliance functions, addressing identified weaknesses, and ensuring timely remediation. Deficiencies in program design—such as inadequate risk assessments or ineffective controls—often lead regulators to hold senior management accountable.

While the compliance department plays an important role in execution and advisory functions, accountability for program design and effectiveness rests with the board and senior management, not committees or individual departments.

Lawyers, accountants, and TCSPs are considered gatekeepers because they serve as an entry point to the financial system and act as a first line of defense in preventing illicit funds from being integrated into the legitimate economy through their services and professional expertise.