Free Practice Questions for ACAMS CAMS Exam

Customer segmentation is a foundational element of effective transaction monitoring and is strongly aligned with the risk-based approach promoted by FATF and national regulators.

Customers differ significantly in their transaction behavior depending on factors such as customer type, industry, geography, products used, and transaction volumes. By grouping customers into similar peer segments, institutions can more accurately establish expected behavior and identify anomalies that may indicate suspicious activity.

Comparing customers across a single large population would mask meaningful deviations and generate excessive false positives or missed risks. Segmentation improves alert quality, efficiency, and investigative focus.

Customer segmentation is not limited to sanctions compliance; it is a core AML transaction monitoring practice used to detect money laundering, terrorist financing, and other financial crimes.

Real estate transactions are vulnerable to ML/TF risks, particularly when there is limited transparency or unusual payment methods:

Cross-border purchases (A):“Purchases by foreign buyers, especially from high-risk jurisdictions, are a red flag for money laundering in the real estate sector.”(CAMS 6th Edition, Real Estate Money Laundering Risks; FATF, Money Laundering and Terrorist Financing through the Real Estate Sector, 2007)

Non-financed purchases (D):“Non-financed (all-cash) purchases can indicate the introduction of illicit funds into the financial system, bypassing the controls of mortgage lenders.”(CAMS 6th Edition, Real Estate ML/TF Risks)

Incorrect Options:

B: Purchasing in the name of a natural person is standard and not inherently risky.

C: Paying the true market price does not raise ML/TF risk.

The pseudonymous nature of cryptoasset transactions enables criminals to transfer large sums globally while concealing their identities. This lack of transparency poses a significant money laundering risk, as it hinders efforts to trace the ultimate beneficial owner.

The effectiveness of AML training programs depends on comprehensive content that covers relevant regulatory, risk, and procedural topics, combined with engaging delivery methods that promote retention and practical application by participants.

One of the core components of a strong AFC (Anti-Financial Crimes) compliance program is establishingclear roles, responsibilities, and lines of accountability, especially forescalating and addressing AFC risks and compliance issues. This governance clarity ensures effective implementation, transparency in decision-making, and timely resolution of compliance concerns.

While external audits (option A) and internal controls (option B) are important,defining governance structure and escalation responsibilities (option D)is a foundational element. Additionally, the board of directors (option C) provides oversight—not day-to-day compliance monitoring.

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.

For multinational financial institutions, regulatory expectations are clear: institutions must comply with all applicable laws and regulations in each jurisdiction where they operate or where a transaction has regulatory touchpoints.

In this case, the transaction is subject to both U.S. and EU AML/CFT frameworks, including BSA reporting obligations, OFAC sanctions screening, 6AMLD requirements, and EBA supervisory expectations. Selecting only one regulatory regime would expose the institution to compliance failures and enforcement risk.

A dual-compliance approach ensures that reporting, sanctions screening, customer due diligence, and record-keeping obligations are met in both jurisdictions. This approach aligns with FATF principles on cross-border compliance and consolidated supervision.

Deferring to the “most stringent” regime is not sufficient, as different rules may apply to different aspects of the transaction. Therefore, simultaneous compliance is required.