CAMS Certified Anti-Money Laundering
Specialist Examination Questions And
Correct Answers (Verified Answers) Plus
Rationales 2026 Q&A | Instant
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Question 1
What is the primary purpose of the Financial Action Task Force (FATF)
Recommendations?
A) To establish binding international laws for all member countries
B) To set global standards for combating money laundering, terrorist financing,
and proliferation financing
C) To provide a framework for the prosecution of money laundering offenders in
developing nations
D) To oversee the daily operations of financial intelligence units worldwide
Answer: B
Rationale: The FATF Recommendations are the international standard for
combating money laundering, terrorist financing, and the financing of
proliferation of weapons of mass destruction. They are not binding laws (A) but
rather standards that countries are expected to implement through national
legislation. They do not focus solely on prosecution in developing nations (C) nor
do they oversee the daily operations of FIUs (D).
Question 2
A customer's transaction history shows a pattern of structured cash deposits just
below the reporting threshold over a short period. This activity is most indicative
of which money laundering stage?
A) Integration
,B) Placement
C) Layering
D) Structuring
Answer: B
Rationale: Structuring involves breaking up large sums of cash into smaller
amounts to evade reporting requirements, which is a classic placement
technique. Placement is the first stage where illicit funds are introduced into the
financial system. Layering (C) involves moving funds to obscure the audit trail,
and Integration (A) is when laundered funds are used for legitimate purposes.
Structuring is the specific technique, but the stage is Placement.
Question 3
Under the USA PATRIOT Act, which section requires financial institutions to
establish anti-money laundering programs?
A) Section 311
B) Section 314
C) Section 352
D) Section 326
Answer: C
Rationale: Section 352 of the USA PATRIOT Act mandates that financial
institutions develop and implement AML programs. Section 311 (A) allows the
Treasury to designate foreign jurisdictions or institutions as "primary money
laundering concerns." Section 314 (B) facilitates information sharing between
financial institutions and the government. Section 326 (D) requires customer
identification programs (CIP).
Question 4
Which of the following is a fundamental component of a robust Customer Due
Diligence (CDD) process?
A) Relying solely on self-certification from the customer
B) Verifying the customer's identity using reliable, independent source documents
C) Accepting a notarized copy of a passport as the sole means of verification
D) Only conducting CDD for accounts exceeding a specific balance threshold
,Answer: B
Rationale: Verification of identity using reliable, independent source documents
is a cornerstone of CDD. Self-certification (A) is insufficient. A notarized copy can
be a component but not the sole verification method (C). CDD should apply to all
customers, not just those over a threshold (D).
Question 5
The "Wolf of Wall Street" scheme, where brokers engaged in pump-and-dump
activities and hid profits through offshore accounts, is an example of what type of
predicate offense?
A) Cybercrime
B) Securities fraud
C) Drug trafficking
D) Human trafficking
Answer: B
Rationale: Pump-and-dump schemes and securities fraud are predicate offenses
to money laundering. The manipulation of stock prices and the concealment of
the proceeds through layers of transactions clearly falls under securities fraud.
The other options, while predicate offenses, do not describe the specific activity.
Question 6
What is the primary role of a Financial Intelligence Unit (FIU)?
A) To conduct criminal prosecutions of money launderers
B) To receive, analyze, and disseminate suspicious transaction reports to law
enforcement
C) To set the interest rates for domestic financial institutions
D) To provide credit ratings for international corporations
Answer: B
Rationale: The core function of an FIU is to act as a national center for receiving,
analyzing, and disseminating financial intelligence to competent authorities.
FIUs do not prosecute (A), set interest rates (C), or provide credit ratings (D).
, Question 7
Which of the following is the most effective control for mitigating the risk of
money laundering through a correspondent banking relationship?
A) Relying on the respondent bank's internal audit reports without independent
review
B) Establishing a flat fee structure for all services provided to the respondent bank
C) Conducting enhanced due diligence (EDD) on the respondent bank, including
understanding its ownership and AML controls
D) Limiting the relationship to only wire transfers under $10,000
Answer: C
Rationale: Enhanced due diligence is the cornerstone of managing
correspondent banking risks. It involves a deep dive into the respondent bank's
business, ownership, and AML program. Relying on internal reports (A) is
insufficient. A flat fee (B) has no bearing on AML risk. Limiting transactions (D) is
a risk mitigation measure but not the most effective control without EDD.
Question 8
A compliance officer discovers that a politically exposed person (PEP) from a
foreign country has opened an account. According to FATF standards, what is the
minimum requirement?
A) No additional measures are required if the initial CDD was performed
B) The account must be immediately closed
C) The bank must apply enhanced due diligence measures
D) The bank must report the account to the local police within 24 hours
Answer: C
Rationale: FATF standards require financial institutions to apply enhanced due
diligence measures for PEPs. This includes obtaining senior management
approval, establishing the source of funds and wealth, and conducting enhanced
ongoing monitoring. Closing the account (B) is not an automatic requirement.
Reporting to police (D) is not the standard initial step.
Question 9
What is the primary legal consequence for a financial institution that violates the
Specialist Examination Questions And
Correct Answers (Verified Answers) Plus
Rationales 2026 Q&A | Instant
Download Pdf
Question 1
What is the primary purpose of the Financial Action Task Force (FATF)
Recommendations?
A) To establish binding international laws for all member countries
B) To set global standards for combating money laundering, terrorist financing,
and proliferation financing
C) To provide a framework for the prosecution of money laundering offenders in
developing nations
D) To oversee the daily operations of financial intelligence units worldwide
Answer: B
Rationale: The FATF Recommendations are the international standard for
combating money laundering, terrorist financing, and the financing of
proliferation of weapons of mass destruction. They are not binding laws (A) but
rather standards that countries are expected to implement through national
legislation. They do not focus solely on prosecution in developing nations (C) nor
do they oversee the daily operations of FIUs (D).
Question 2
A customer's transaction history shows a pattern of structured cash deposits just
below the reporting threshold over a short period. This activity is most indicative
of which money laundering stage?
A) Integration
,B) Placement
C) Layering
D) Structuring
Answer: B
Rationale: Structuring involves breaking up large sums of cash into smaller
amounts to evade reporting requirements, which is a classic placement
technique. Placement is the first stage where illicit funds are introduced into the
financial system. Layering (C) involves moving funds to obscure the audit trail,
and Integration (A) is when laundered funds are used for legitimate purposes.
Structuring is the specific technique, but the stage is Placement.
Question 3
Under the USA PATRIOT Act, which section requires financial institutions to
establish anti-money laundering programs?
A) Section 311
B) Section 314
C) Section 352
D) Section 326
Answer: C
Rationale: Section 352 of the USA PATRIOT Act mandates that financial
institutions develop and implement AML programs. Section 311 (A) allows the
Treasury to designate foreign jurisdictions or institutions as "primary money
laundering concerns." Section 314 (B) facilitates information sharing between
financial institutions and the government. Section 326 (D) requires customer
identification programs (CIP).
Question 4
Which of the following is a fundamental component of a robust Customer Due
Diligence (CDD) process?
A) Relying solely on self-certification from the customer
B) Verifying the customer's identity using reliable, independent source documents
C) Accepting a notarized copy of a passport as the sole means of verification
D) Only conducting CDD for accounts exceeding a specific balance threshold
,Answer: B
Rationale: Verification of identity using reliable, independent source documents
is a cornerstone of CDD. Self-certification (A) is insufficient. A notarized copy can
be a component but not the sole verification method (C). CDD should apply to all
customers, not just those over a threshold (D).
Question 5
The "Wolf of Wall Street" scheme, where brokers engaged in pump-and-dump
activities and hid profits through offshore accounts, is an example of what type of
predicate offense?
A) Cybercrime
B) Securities fraud
C) Drug trafficking
D) Human trafficking
Answer: B
Rationale: Pump-and-dump schemes and securities fraud are predicate offenses
to money laundering. The manipulation of stock prices and the concealment of
the proceeds through layers of transactions clearly falls under securities fraud.
The other options, while predicate offenses, do not describe the specific activity.
Question 6
What is the primary role of a Financial Intelligence Unit (FIU)?
A) To conduct criminal prosecutions of money launderers
B) To receive, analyze, and disseminate suspicious transaction reports to law
enforcement
C) To set the interest rates for domestic financial institutions
D) To provide credit ratings for international corporations
Answer: B
Rationale: The core function of an FIU is to act as a national center for receiving,
analyzing, and disseminating financial intelligence to competent authorities.
FIUs do not prosecute (A), set interest rates (C), or provide credit ratings (D).
, Question 7
Which of the following is the most effective control for mitigating the risk of
money laundering through a correspondent banking relationship?
A) Relying on the respondent bank's internal audit reports without independent
review
B) Establishing a flat fee structure for all services provided to the respondent bank
C) Conducting enhanced due diligence (EDD) on the respondent bank, including
understanding its ownership and AML controls
D) Limiting the relationship to only wire transfers under $10,000
Answer: C
Rationale: Enhanced due diligence is the cornerstone of managing
correspondent banking risks. It involves a deep dive into the respondent bank's
business, ownership, and AML program. Relying on internal reports (A) is
insufficient. A flat fee (B) has no bearing on AML risk. Limiting transactions (D) is
a risk mitigation measure but not the most effective control without EDD.
Question 8
A compliance officer discovers that a politically exposed person (PEP) from a
foreign country has opened an account. According to FATF standards, what is the
minimum requirement?
A) No additional measures are required if the initial CDD was performed
B) The account must be immediately closed
C) The bank must apply enhanced due diligence measures
D) The bank must report the account to the local police within 24 hours
Answer: C
Rationale: FATF standards require financial institutions to apply enhanced due
diligence measures for PEPs. This includes obtaining senior management
approval, establishing the source of funds and wealth, and conducting enhanced
ongoing monitoring. Closing the account (B) is not an automatic requirement.
Reporting to police (D) is not the standard initial step.
Question 9
What is the primary legal consequence for a financial institution that violates the
