🎓 CAMS Exam Practice Quiz

100-Question AML / CFT Practice Test

Interactive exam-style quiz based on the CAMS study material. Choose a part, answer the questions, get your score, and review the correct answers for missed questions.

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🎓 CAMS v7.03 Exam Study Animation

AFC / AML / CFT Study Guide — Animated Exam Summary

Updated for the v7.03 study guide: financial crime risks, banking and nonbank typologies, DNFBPs, global AFC frameworks, compliance program design, transaction monitoring, investigations, technology and data.

What changed in this v7.03 version?

This version is broader than a simple AML/CFT summary. It uses the AFC language of the new guide and adds stronger coverage of sanctions evasion, bribery/corruption, sector-specific risks, three lines of defense, continuous risk assessment, technology, AI, perpetual KYC, screening, blockchain tracing, data quality and data lineage.

AFC scopeExpanded from AML/CFT to wider Anti-Financial Crime topics.
TechnologyMore focus on AI, digital ID, biometrics, pKYC and monitoring tools.
DataNew emphasis on data quality, lineage, validation and entity resolution.
GovernanceStronger focus on risk appetite, EWRA, three lines of defense and oversight.

Financial Crime and Money Laundering Flow

1. Predicate Crime

Crime generates value: fraud, trafficking, corruption, sanctions evasion, cybercrime, tax crime, environmental crime or drug trafficking.

2. Placement

Criminal proceeds enter the financial system through cash, accounts, mules, MSBs, casinos, crypto or front businesses.

3. Layering

Funds move through wires, shell companies, trade, investments, crypto, offshore structures and complex chains to hide the origin.

4. Integration

Value appears legitimate through real estate, high-value assets, business income, loans, wealth products or investments.

40 Core CAMS v7.03 Study Cards

01

Financial Crime

Financial crime covers money laundering, fraud, tax evasion, sanctions evasion, bribery, corruption, cyber-enabled crime and other illegal use of financial systems.

AFCbroad riskexam core
02

Money Laundering

Concealing the existence, source, movement, destination or criminal use of property or funds so they appear legitimate.

MLconcealmentpredicate crime
03

Placement

Criminal proceeds first enter the financial system, often via cash deposits, currency exchange, casinos, MSBs, mules or cash-intensive businesses.

cash entrystructuring
04

Layering

Funds are moved through complex transactions, accounts, jurisdictions, companies, cryptoassets or trade flows to hide the origin.

complexitycross-border
05

Integration

Laundered value returns to the legitimate economy through assets, real estate, investments, loans, luxury goods or business income.

use of wealthlegitimacy
06

Predicate Crimes

Underlying crimes that generate proceeds, such as drug trafficking, fraud, corruption, tax crime, human trafficking, environmental crime and sanctions evasion.

source crime21 FATF categories
07

Sanctions Evasion

Sanctions targets hide payments, trade routes or ownership to continue prohibited activity; common tactics include stripping, shell companies and transshipment.

OFACUNEUownership
08

Bribery & Corruption

Bribery involves improper benefit for misuse of power; corruption includes bribery, embezzlement, extortion, graft and influence peddling.

ABCPEP risk
09

Tax Evasion vs Avoidance

Tax evasion is illegal concealment or false reporting; tax avoidance uses lawful planning, although aggressive structures may still raise risk.

tax crimepredicate
10

Fraud & Cyber-Enabled Crime

Fraud uses deception for financial gain; cyber-enabled crime includes phishing, BEC, ransomware and identity-based schemes.

BECransomwarefraud
11

Terrorist Financing

TF raises, moves, stores or uses funds for terrorist purposes; the source can be legal or illegal, but the purpose is hidden.

CFTpurpose hidden
12

Human Trafficking & Smuggling

These crimes generate proceeds and can show red flags such as controlled accounts, transport/lodging payments and unusual cash activity.

predicateexploitation
13

Environmental Crime

Illegal logging, poaching, waste trafficking and similar crimes can generate proceeds that enter trade, banking and asset channels.

predicateESG risk
14

Banking Risk

Retail, commercial, private, correspondent and investment banking can be abused through accounts, wires, loans, cards and trade finance.

depositswiresloans
15

Shell & Shelf Companies

Shell companies lack real business activity; shelf companies are old inactive entities used to appear established and credible.

UBOlegal entity
16

PEP Risk

Politically exposed persons are higher risk because their role may create exposure to bribery, corruption or misuse of public funds.

EDDsource of wealth
17

Control & Ownership

AML/AFC controls must identify who owns, controls and benefits from entities, including nominees, trusts and indirect structures.

BOcontrol
18

Concentration Accounts

Internal bank accounts can combine customer activity; weak controls can obscure true source, owner or purpose of funds.

hidden flowcontrols
19

Trade Finance Risk

Trade finance can be abused through false invoices, over/under-invoicing, phantom shipments, third-party payments and unusual routes.

TBMLinvoices
20

Credit & Card Risks

Loans, credit products and cards can be used to layer, repay with illicit funds, move funds quickly or disguise source of funds.

loan repaymentcards
21

Private Banking & Wealth

Higher risk because of large values, offshore structures, trusts, SPVs, PEPs, complex source of wealth and confidentiality expectations.

wealthoffshore
22

Correspondent Banking

A bank provides services to another bank; risk arises because the correspondent may not directly know the respondent’s customers.

KYCCnested
23

Capital Markets Risk

Securities, derivatives, penny stocks, market manipulation, rapid buying/selling and third-party funding can support layering and fraud.

MBMLsecurities
24

Payment Service Providers

PSPs, e-commerce and MSBs can move funds quickly across borders with limited face-to-face contact and high transaction volumes.

PSPMSBe-commerce
25

Insurance Risk

Investment-linked insurance can be abused through single premiums, early surrender, third-party payments and unclear source of funds.

early surrenderSoF
26

Cryptoassets & FinTech

Cryptoassets, stablecoins, tokens, NFTs and DeFi create risk through pseudonymity, speed, cross-border value movement and weakly regulated providers.

cryptoDeFiNFT
27

Mixers & Tumblers

Crypto mixing services obscure transaction trails and can be used to layer proceeds from ransomware, darknet markets and fraud.

blockchain tracing
28

DNFBPs

Designated nonfinancial businesses and professions include lawyers, accountants, real estate, TCSPs, gaming and high-value asset dealers.

gatekeepers
29

Gaming & Casinos

Casinos can convert cash to chips and checks; risk rises when customers gamble minimally, structure activity or use third parties.

cashchips
30

Real Estate Risk

Real estate supports integration through cash purchases, offshore entities, unclear UBOs, rapid resale, unusual pricing and third-party payments.

integrationproperty
31

High-Value Assets

Gold, diamonds, luxury watches, vehicles, art and jade can store, move and disguise value because pricing and ownership can be opaque.

commoditiesassets
32

Free-Trade Zones & Import/Export

FTZs and import/export businesses can be exploited through transshipment, false documents, weak oversight and complex trade chains.

FTZTBML
33

Charities & NGOs

Charities and NGOs can be misused for terrorist financing, sanctions evasion or diversion of funds, especially in conflict zones.

NGOTF
34

FATF Standards

FATF sets global AML/CFT/PF standards, including the 40 Recommendations, Immediate Outcomes, mutual evaluations and high-risk jurisdiction processes.

40 RecsIOs
35

Global AFC Bodies

UN, World Bank, IMF, OECD, Basel, Egmont, Wolfsberg, IOSCO, G20, Transparency International and others provide guidance and cooperation frameworks.

FIUBaselEgmont
36

Regulatory Landscapes

Major regimes include BSA, USA PATRIOT Act, AMLA 2020, OFAC, EU AML package, AML Authority, MiCA, UK, APAC and UAE rules.

USEUMiCA
37

AFC Program

A modern AFC program uses policies, governance, risk assessment, controls, training, monitoring/testing, reporting, QA/QC and independent audit.

governancecontrols
38

Three Lines of Defense

First line owns customer risk, second line sets oversight and challenge, third line independently audits program effectiveness.

1LOD2LOD3LOD
39

Risk Assessment

Risk assessment identifies inherent risk, control effectiveness and residual risk across customers, products, geography, channels and business lines.

EWRARBA
40

Technology & Data

V7.03 adds stronger emphasis on digital ID, biometrics, AI, perpetual KYC, screening, data quality, data lineage and blockchain tracing.

AIdatapKYC

FATF and AFC Bodies — One-Sentence Functions

FATFSets global AML/CFT/PF standards, evaluates countries through mutual evaluations, and identifies high-risk jurisdictions.
FSRBsRegional FATF-style bodies that support and assess implementation of FATF standards.
United NationsIssues conventions and Security Council resolutions relevant to sanctions, terrorism financing and proliferation financing.
World BankSupports countries with technical assistance and assessments to strengthen AFC frameworks.
IMFAssesses and advises jurisdictions on financial sector stability and AML/CFT frameworks.
OECDProvides guidance on tax transparency, bribery, corruption and financial integrity.
Basel CommitteeProvides banking supervision guidance on sound risk management and AML controls.
Egmont GroupConnects FIUs to support secure information exchange and international financial intelligence cooperation.
Wolfsberg GroupGlobal banking group that publishes practical guidance on areas such as correspondent banking, CDD and sanctions.
IOSCOSupports standards and cooperation for securities regulators and capital markets integrity.
G20 Anti-Corruption Working GroupPromotes international cooperation against corruption, beneficial ownership abuse and illicit finance.
Transparency InternationalPublishes research and advocacy on corruption risks and governance weaknesses.
Basel Institute on GovernanceProvides research, training and practical tools against corruption and illicit financial flows.
Tax Justice NetworkFocuses on tax abuse, secrecy jurisdictions and financial transparency.
FinCENThe US FIU and AML regulator responsible for SARs, BSA implementation and financial intelligence.
OFACUS sanctions authority administering and enforcing economic and trade sanctions.
EU AML Authority / AMLANew EU-level authority intended to strengthen AML/CFT supervision and coordination.
Regulators, FIUs and Law EnforcementRegulators supervise compliance, FIUs analyze reports, and law enforcement investigates/prosecutes crime.

Expanded Exam Glossary — v7.03

AFCAnti-Financial Crime: broader framework covering AML, CFT, sanctions, fraud, bribery/corruption and related financial crime controls.
AMLAnti-Money Laundering controls to prevent and detect laundering of criminal proceeds.
CFTCountering the Financing of Terrorism: measures to detect and prevent terrorist financing.
PFProliferation Financing: financing linked to weapons of mass destruction and related sanctions/prohibited activity.
ABCAnti-Bribery and Corruption controls addressing bribery, corruption, kickbacks, embezzlement and improper influence.
Predicate CrimeThe underlying crime generating proceeds that may later be laundered.
Sanctions EvasionAttempts to bypass sanctions through payment stripping, trade manipulation or hidden ownership.
PlacementInitial entry of criminal proceeds into the financial system.
LayeringComplex movement of funds to obscure origin, ownership or audit trail.
IntegrationUse of laundered funds in the legitimate economy.
StructuringSplitting transactions into smaller amounts to avoid reporting or detection thresholds.
MicrostructuringVery small structuring activity, often associated with digital asset laundering.
SmurfingUsing multiple people/accounts/transactions to split funds.
Money MulePerson or account used to receive and transfer illicit funds for criminals.
TBMLTrade-Based Money Laundering using invoices, shipments, pricing or documents to move value.
MBMLMarket-Based Money Laundering using financial instruments or markets to layer illicit funds.
CryptoassetDigital asset that may be transferred quickly and pseudonymously across borders.
StablecoinCryptoasset designed to maintain value against another asset, often fiat currency.
NFTNon-fungible token; can create AML risk when value, ownership or pricing is opaque.
DeFiDecentralized finance; can create risk through disintermediated lending, exchange and liquidity protocols.
Mixer / TumblerTool that obscures crypto transaction history by mixing funds.
Blockchain TracingTechnology used to analyze and trace digital asset flows.
CDDCustomer Due Diligence: identify, verify, understand purpose, beneficial ownership and expected activity.
EDDEnhanced Due Diligence for higher-risk customers, products, geographies or activity.
SDDSimplified Due Diligence for genuinely lower-risk relationships when allowed.
KYCKnow Your Customer: understanding customer identity, business, risk and expected behavior.
eKYCElectronic KYC using digital identity verification and electronic onboarding data.
pKYCPerpetual KYC: continuous monitoring and updating of customer risk information.
ID&VIdentity and Verification processes used during onboarding.
UBOUltimate Beneficial Owner: natural person ultimately owning or controlling an entity.
PEPPolitically Exposed Person with higher corruption/bribery risk exposure.
Source of FundsSpecific origin of money used in a transaction.
Source of WealthOrigin of a customer’s overall wealth.
EWRAEnterprise-Wide Risk Assessment covering inherent risks, controls and residual risks.
Risk Appetite StatementDocument defining the level and type of risk the organization is willing to accept.
Inherent RiskRisk before controls are applied.
Residual RiskRisk remaining after control effectiveness is considered.
Control EffectivenessHow well controls mitigate identified risks.
1LODFirst Line of Defense: business/front office owns and manages customer risk.
2LODSecond Line of Defense: compliance/risk provides oversight, challenge and advisory control.
3LODThird Line of Defense: internal audit independently tests the program.
QA/QCQuality Assurance and Quality Control checking work quality and process effectiveness.
Transaction MonitoringControls that identify unusual or suspicious activity across transactions.
Payment ScreeningReal-time or near-real-time screening of payments against sanctions and other lists.
Batch ScreeningPeriodic screening of customer or counterparty records against updated lists.
Fuzzy LogicScreening method that catches partial, approximate or similar name matches.
WhitelistingApproved internal handling of repeated false positives after appropriate review.
Adverse MediaNegative public information that may increase risk.
SAR / STRSuspicious Activity/Transaction Report filed when suspicion exists; proof is not required.
Tipping OffImproperly alerting a customer that a SAR/STR has been or may be filed.
De-riskingTerminating or restricting relationships to avoid risk, which must be balanced with financial inclusion.
Financial InclusionEnsuring risk controls do not unnecessarily exclude legitimate lower-risk customers.
OSINTOpen-source intelligence from publicly available information.
Device IntelligenceUse of device attributes to help identify risk or fraud during digital journeys.
GeolocationLocation-based data used to support risk detection and onboarding/security controls.
BiometricsIdentity tools using face, voice, fingerprint or other biological features.
Liveness CheckTechnology that verifies a person is physically present, not a spoofed image/video.
RPARobotic Process Automation used to automate repetitive compliance processes.
AI / MLArtificial intelligence and machine learning used for screening, monitoring, risk scoring and investigations.
Data QualityAccuracy, completeness, consistency and reliability of data used by AFC systems.
Data LineageDocumented path showing where data came from, how it moved and how it changed.
Entity ResolutionMatching records that refer to the same person/entity across datasets.
ClusteringGrouping related customers, accounts or activity to find hidden patterns.
Case ManagementSystem/process to manage alerts, investigations, decisions, evidence and reporting.
Network AnalysisVisual/analytical method showing relationships between customers, accounts and counterparties.
MLATMutual Legal Assistance Treaty used for cross-border evidence sharing and cooperation.
Quiz: Which stage introduces criminal funds into the financial system?
Choose an answer.

Final CAMS v7.03 Memory Sheet

AFCBroader than AML: includes AML, CFT, sanctions, fraud, ABC, technology and governance.
ML FlowPredicate crime → placement → layering → integration.
TF DifferenceMoney laundering hides source; terrorist financing hides purpose/destination.
SanctionsLook for payment stripping, hidden ownership, shell companies and transshipment.
Risk-BasedHigher risk needs stronger controls, EDD, monitoring and documentation.
3 LODBusiness owns risk, compliance oversees, audit independently tests.
TechnologyAI and automation help, but must be governed, tested and data-driven.
Best AnswerRisk-based, documented, proportionate, escalated and defensible.