OK, so ACAMS (The Association of Certified Anti-Money Laundering Specialists) provides a Detailed Content Outline in their Candidate’s Handbook, but it ends there. No explanation of what those five pages mean – which leaves many people to pass over some of the most significant insight they can gain into the exam itself. So let’s take a look at what it all means.
First off, the outline itself is the document used in 2007 when we were writing new questions for the exam pool (on July 29, 2010, the outline shown in the Handbook still was effective January 10, 2007). Each of us would be assigned particular boxes, say “I.B.1.c. Application.” This would mean that the person had to write an “Application” question about:
I – Risks and Methods of Money Laundering and Terrorism Financing
B – Recognition of Risks
1 – Recognize risks associated with
c – other known methods (e.g. FATF Typologies, FIU SAR reviews, Egmont Group’s showcases)
Open cells represent categories and cognitive levels (more on these shortly) that could appear on the exam. Shaded cells represent categories and cognitive levels that will not appear on the exam. Therefore, one can look at this outline and see the following percentage breakdown should occur on the exam, by major category:
Risks and Methods of Money Laundering and Terrorism Financing [Risks & Methods]– 24%
Compliance Standards for Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) [International Standards] – 20%
AML Compliance Program [Compliance] – 34%
Conducting or Supporting the Investigation Process [Investigations] – 22%
This is the part that requires outside knowledge. There is a field called psychometrics, which basically is the science of measuring mental processes and activities. This field has defined most testing questions as recall, application and analysis.
Recall questions are the most basic and the type that we were used to growing up. These questions simply involve the recall of data that has been previously presented, such as dates, facts and definitions. There is no condition that can be presented in the question that can alter the answer.
The USA PATRIOT Act was passed in:
The correct answer being “C – 2001.” There is nothing that can alter this from being the correct answer.
The three stages of money laundering are:
A) Layering, Placement, Refining
B) Placement, Refining, Integration
C) Refining. Integration, Layering
D) Integration, Layering, Placement
The correct answer being “D – Integration, Layering, Placement.” While this is not the order of the stages as they tend to occur, the question did not ask for the stages in order – only the name of the three stages. Therefore “D” is the best answer.
As always, make sure you read the question to determine what is being asked, but don’t read into the question.
Recall questions comprise about 29% of the questions you will face on the exam.
Application questions require one to apply principles from the field of knowledge to specific situations or conditions. You will need to comprehend, relate, compare and interpret information in new or changing situations. This is an imperative skill in any profession and helps to define professionals from other occupations. Its importance can be seen in that almost half (48%) of the exam questions are classified as the application variety. [However, this is where professional differences of opinion come into play. Life and business experiences may cause that same set of conditions to be interpreted in different ways by different individuals. Hence, there are “best” or “better” answers, but “right” and “wrong” can be open to debate.] A change in the presented conditions will often change that appropriateness of the “best” answer.
Which of the following would be satisfactory elements of an Anti-Money Laundering Program?
I – A CAMS certified employee in the Investigations Unit writes up a few policies and procedures and posts them on the department bulletin board.
II – Shortly after attaining their CAMS certification, the individual provides AML training to the Investigations Unit.
III – The CAMS certified individual routinely reviews the work of the Investigations Unit.
IV – The CAMS certified individual assumes the responsibility of a compliance watchdog.
A) All of the above would be satisfactory
B) II and IV would be satisfactory
C) I and III would be satisfactory
D) None of the above would be satisfactory
The correct answer would be “D – None of the above would be satisfactory.”
I – The AML program must be approved by the Board of Directors.
II – An AML training program is required of all personnel (and contractors).
III – The review of the bank’s Financial Intelligence Department, as part of the audit of the AML program, must be performed by an independent (and knowledgeable) party.
IV – The Compliance Officer must be appointed by the Board of Directors (or upper management with the Board’s approval).
In determining what risks a customer poses, which consideration should NOT be a major factor?
A) Where the customer resides or where the business is headquartered.
B) What is the size of your financial institution.
C) What occupation or type of business does the customer derive their income from.
D) What are the customer’s ethnic heritage, sexual orientation and political beliefs.
The correct answer would be “D.” The customer’s ethnic heritage, sexual orientation and political beliefs are more discriminatory factors, and while they may help frame the context of certain transactions, they should not be a major factor in assessing risk.
The size of your financial institution is a critical element in determining the level of sensitivity to risks for certain customers.
Analysis questions require one to synthesize information, arrive at solutions and/or evaluate the usefulness of solutions. One needs to distinguish between facts and assumptions and to put various knowledge parts together to form a new knowledge component or solution to a problem. While this is also an important part of being a professional, it comprises only about 23% of the exam.
Which of the following scenarios will most likely require the filing of a Suspicious Activity Report (SAR) with the national FIU?
I – A dance nightclub located near a Midwestern community college, makes $9,000 cash deposits every day. The deposited items are solely $50 and $100 bills.
II – A check casher makes $9,000 cash deposits every day. The deposited items are primarily $10 and $20 bills.
III – A grocery store makes multiple ATM deposits each day at around the same time. The deposits are a combination of checks and cash – mostly smaller bills. In total, there are usually 400-500 items deposited each day.
IV – A busy around the clock gas station / convenience store, located at a major intersection, makes three deposits each calendar day, utilizing tellers, night drops and ATMs. The total cash deposited on weekdays often comes near the currency reporting threshold. Monday deposits require the bank to file Currency Transaction Reports due to the aggregation of the weekend deposits – however, this is done in the back office without the customer’s knowledge.
A) All of the above
B) I and II
C) I, III and IV
D) III and IV
The correct answer being “B – I and II.”
I – is suspicious as it would be unlikely that a bunch of Midwestern community college students going out dancing would only have fifty and one hundred dollar bills.
II – is suspicious primarily because a check casher is a consumer of cash, not a depositor, unless there is another substantial cash generating activity going on at the business, which was not presented in the scenario.
III – OK, this one requires some logic. Yes there are multiple ATM deposits made at the same time each day, but the key element here is the statement that there are 400-500 items total in the daily deposits. Very few ATM machines can handle an envelope that thick. Therefore your institution’s machines force the customer to split the deposits into multiple envelopes. You should not see such a scenario on the exam, but you may encounter it in real life. Sometimes, there are conditions that you may assume, that prove to be false and will reverse your view on suspicion. All that being said, I would not view this as suspicious.
IV – OK, a little more real world understanding. It is stated that the store operates 24 / 7 and that it makes 3 deposits every calendar day. Many multi-shift businesses make it a point to have a deposit made for every shift, so, the three daily deposits would likely not be a case of structuring, but that of a valid business decision. Also, just because the bank files the CTRs without the customer’s knowledge, it is not suspicious. Indeed, it can and does happen every day in the real world.
To recap, I and II are suspicious and would most likely have a SAR filed. III and IV, as presented, would not require a SAR (in this investigator’s view).
The ethics component, I believe, was added in 2007. At that time, we were sometimes asked to add an ethics spin to the question – often in a “what not to do” manner. These are not separate questions; they are simply components of other questions.
My primary website (http://www.AML-Assassin.com) has unofficial, supplemental study materials. There are no similar products available anywhere in the world – a full-length (120 question) practice test and a deck of over 400 flashcards. To find out more on these products – or to order them – please follow the above link.
Paul R Freeman, CPA, CAMS
Welcome To AML Assassin.Net
First, let me state that the organization (ACAMS) does not endorse or approve any exam prep materials that are not their own (probably protecting their own bottom line). I understand and, as an active member of ACAMS, support their position. However…
Years ago, as I was studying for the exam myself, I found the official preparatory materials insufficient, so I started designing my own. At the time I was an employee of KeyBank. Key made a strong effort to get nearly everyone involved in the AML department certified and within 12 months, we had over 75 people pass the exam and had the 3rd most CAMS certified people of any bank in the world.
I shared my materials with others and became the trainer for internal exam prep courses. I made flashcards for myself and designed a full-length practice test for others (being a Certified Public Accountant, I am fully aware of how difficult a professional certification exam can be). I felt it was an important step to prepare my “students” for both the physical and mental rigors such a test can pose.
I became active within ACAMS, especially in the area of education. In 2007, I was on the Task Force that wrote new questions for the actual exam, so I have developed a strong insight into the type and construction of the test questions. That being said, I do not have access to the actual exam questions and I do not ever reference the questions that I submitted for the exam then.
After leaving KeyBank in 2009, I wrote a new practice test – now 120 questions. It has the same balance as the real exam as to the four (4) areas of study (methods, international standards, compliance, and investigations).
Those that have used my practice test say that it is harder than the real exam and no one yet has claimed getting a higher score on mine than the actual exam. To me, that means I am doing something right. I believe that a great practice test will “kick your teeth in” and drive home areas of weakness in your knowledge base.
I wish that I could just give all of this away, but it takes a great deal of time to write and proof good questions (my average is over an hour per question). But at the given price, it is under $0.81 per question (even less if purchased in combination with the flashcards). If you opt to purchase the exam, you will be re-directed to my regular website (http://www.aml-assassin.com). From that site, you can also opt-in to receive our “Flashcard of the Day” e-mail (five days a week, the image of an actual flashcard is sent out). The e-mails are clean, just the image and a comment that you can go to my website for additional materials – no links to other websites and I never give or sell my subscribers’ names or e-mail addresses to anyone.
Anyway, I hope you find these materials helpful and good luck in your exam preparations.
Paul R Freeman, CPA, CAMS