CAMS ACAMS Certified Anti-Money Laundering Specialist (CAMS7 the 7th edition) Free Practice Exam Questions (2026 Updated)

The CAMS 6th Edition specifically lists environmental crime as a predicate offense for money laundering. Environmental crimes include activities such as illegal logging, illegal mining, and illegal trade in wildlife.

“Environmental crime, including illegal logging and mining, is recognized as a predicate offense to money laundering. Such crimes often involve complex corporate structures to hide the illicit origin of the proceeds.”

(CAMS 6th Edition, Chapter: Risks and Methods of Money Laundering and Terrorist Financing; FATF Recommendations, Predicate Offenses)

Incorrect Options:

A: Trade-based ML refers to manipulating trade transactions, not the underlying crime.

B: Corruption may be involved, but the primary crime is environmental.

C: Illicit resource trade describes the act, but the official predicate crime category is environmental crime.

A (Enhanced due diligence): EDD is a key control at onboarding for high-risk customers, involving deeper scrutiny, additional documentation, and approval layers to address increased ML/TF risk.

“High-risk customers must be subject to enhanced due diligence during onboarding to ensure a thorough understanding of potential ML/TF risks.”(CAMS 6th Edition, CDD/EDD for High-Risk Customers)

The CAMS 6th Edition clearly identifies a risk-based approach as the cornerstone of effective AML/CFT programs. Risk assessments should consider various risk factors that directly influence exposure to ML/TF.

Product risk (A): Certain products or services may present higher ML/TF risks, such as private banking, correspondent banking, or cash-intensive products.“Products and services offered, and their inherent risk levels, must be assessed as part of the risk-based approach.”(CAMS 6th Edition, AML Compliance Program, Risk Assessment)

Geographic risk (C): Jurisdictions where the customer operates or where transactions are conducted may present higher or lower risks due to factors such as weak AML regulations or high corruption.“Geographic risk considers where a customer is located and/or where transactions occur, referencing countries with increased risk, such as those identified by the FATF.”(CAMS 6th Edition, Risk Assessment Factors)

Customer risk (D): The type of customer, such as PEPs, non-residents, or companies with complex structures, may present higher ML/TF risks.“Customer risk assessment is based on the customer’s profile, activity, and ownership structure, and is a critical component in risk-based monitoring.”(CAMS 6th Edition, CDD/EDD)

Incorrect Options:

B (Credit risk): Related to creditworthiness, not ML/TF.

E (Liquidity risk): Refers to a firm’s ability to meet financial obligations; not an AML risk factor.

United Nations Security Council (UNSC) sanctions are a key international tool established under Chapter VII of the UN Charter. Their primary purpose is to maintain or restore international peace and security, not to punish states or provide economic advantage.

Sanctions may include asset freezes, travel bans, arms embargoes, or targeted measures against individuals and entities. These measures are designed to influence behavior, prevent escalation of conflict, and support diplomatic solutions.

The use of force is separate from sanctions and requires explicit authorization. Sanctions are not intended to be indefinite and are regularly reviewed and adjusted based on effectiveness and humanitarian considerations.

While sanctions may exert pressure on governments or actors, they are not intended as punitive measures but as preventive and corrective tools aligned with international law.

Conducting a periodic enterprise-wide risk assessment (EWRA) is the most effective approach to identifying, assessing, and mitigating financial crime risks. It ensures all inherent risks across areas like AML, CFT, sanctions, fraud, ABC, and tax evasion are evaluated, existing controls are assessed, and residual risks are identified. This comprehensive view enables a cohesive and proactive risk management strategy aligned with regulatory expectations.

Beneficial ownership registers maintained by the country of incorporation are the most reliable external source for verifying beneficial ownership during onboarding, as they are official records mandated by law and typically subject to regulatory oversight.

Early surrender of a policy can be used to quickly access and integrate illicit funds, while funding an insurance policy with cryptocurrencies or other non-fiat currencies can obscure the source of funds, both of which are recognized money laundering risk factors in insurance products.

Terrorist financing can be facilitated on gaming platforms particularly through the trading of in-game items for fiat currency. This mechanism allows for the movement of value outside the formal financial system, potentially evading detection and reporting requirements.

“One of the key ML/TF risks in online gaming is the ability to convert virtual assets or in-game items into real-world (fiat) currency, thereby providing a channel for laundering money or funding terrorist activities.”

(CAMS 6th Edition, Chapter: Risks and Methods of Money Laundering and Terrorist Financing; FATF, Virtual Assets Guidance 2019)

Incorrect Options:

A: Buying in-game items with in-game currency does not in itself facilitate terrorist financing.

B: Exchanging items between players may be a step in layering but is not direct TF unless items are traded for fiat.

D: Obtaining items by in-game activity is standard gameplay and not a TF method.

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.

Regulatory Technology (RegTech) is a specialized subset of FinTech that focuses on improving how organizations meet regulatory and compliance obligations, including AML/CFT requirements. RegTech solutions leverage technologies such as automation, data analytics, artificial intelligence, and machine learning to enhance efficiency, accuracy, and scalability.

In the AML context, RegTech supports functions such as customer due diligence (CDD), transaction monitoring, sanctions screening, regulatory reporting, and record-keeping. These tools help financial institutions reduce manual processes, improve detection of suspicious activity, and respond more quickly to regulatory changes.

SupTech, by contrast, refers to supervisory technology used by regulators, not regulated institutions. The other options are not recognized regulatory terms.

Global regulators, including FATF and national supervisory authorities, actively encourage the responsible adoption of RegTech as part of a risk-based approach, provided appropriate governance, data quality, and model oversight are in place.

Using brokerage accounts like deposit accounts (e.g., frequent cash deposits or withdrawals) and conducting transactions through nominees or third parties are common red flags in the securities industry. These behaviors can obscure the origin or ownership of funds and are often used to facilitate money laundering.