EMT Practice Test

1. Question Content...

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Question1: In 2004, Consolidated KYC Risk Management was issued by the Basel Committee on Banking Supervision (BCBS). What is a key message in this document?

Question2: How do payable through accounts (PTAs) differ from normal foreign correspondent accounts?

Question3: According to the Second European Union Money Laundering Directive, what may knowledge of criminal conduct be inferred from?

Question4: When should new business products to evaluated for AML concerns?

Question5: Bank A is located in Country A.
A wire transfer from Bank B located in Country B is processes by Bank A, where the funds are being moved to a customer at Bank C located in Country C.
The wire transfer is deemed suspicious by Bank A.
Who should Bank A file a suspicious transaction report on?

Question6: An anti-money laundering specialist at a financial institution has received a legal request to provide all transaction records for a specific individual since 2004. Which three items should be delivered?

Question7: Which activity is most likely to facilitate money laundering through on-line systems with inadequate controls?

Question8: Which precaution will a money launderer take to avoid detection when sending electronic transfers?

Question9: After an institution files an STR with regard to a particular account, a law enforcement agent requests the institution to keep the account open until advised otherwise by law enforcement.
What steps should the institution take?

Question10: Which three procedures should a compliance officer looking to revise an institution's CTF efforts include in accordance with the Wolfsberg Group's Statement on the Suppression of the Financing of Terrorism?

Question11: What is the primary action a financial institution should take before formulating its anti-money laundering program?

Question12: A compliance officer is conducting a review of the automated transaction monitoring system. What would be most likely to result in a change in the monitoring system parameters?

Question13: Which method most likely indicates the placement stage of laundering dirty money in a land based casino?

Question14: Why is the Mutual Legal Assistance Treaty (MLAT) a gateway for international cooperation?

Question15: How can a financial institution verify the nature and purpose of a business and its legitimacy?

Question16: Which two statements about the Wolfsberg Group are true?

Question17: What is the result of an increased awareness of the potential for gatekeepers to assist in money laundering in recent years?

Question18: Which three are examples of best practices terms of ensuring an adequate AML program?

Question19: Which example describes the vulnerability of the securities sector for money laundering?

Question20: What should senior management do in order to promote a culture of anti-money laundering compliance?

Question21: An anti-money laundering officer for a financial institution has been conducting a monthly self assessment.
The officer reviews the accounts increase in compliance with a long standing know your Customer policy. The self-assessment for the latest month shows a significant increase in compliance deficiencies for the first time in more than a year. What is the nest course of action for the anti-money laundering officer to take?

Question22: Why would a credit card account likely not be used in the placement stage of money laundering?

Question23: Why do trusts established in certain offshore jurisdictions make good vehicles to launder money?

Question24: A quarterly review is conducted on a retail customer's account at a bank located in a jurisdiction with currency reporting thresholds. A number of large deposits of financial instruments drawn on other institutions in amounts under thresholds were noted. This activity did not fit the account's historical profile. A suspicious transaction report will most likely be filed if what also occurred?

Question25: Which three elements should be considered in an institution's enhanced due diligence process to assure itself that it has secured sufficient understanding of its higher risk respondent bank customers according to the Wolfsberg Principles on Correspondent Banking?

Question26: The Wolfsberg Principles for Private Banking list circumstances that would require additional due diligence, including activities that involve which three of these choices?

Question27: What should an effective anti-money laundering training program include?

Question28: Which three statements are true regarding the extraterritorial reach of laws and legislation of the U.S.?

Question29: What should be part of an institution's monitoring and STR filing process? Choose 3 answers

Question30: What is one of the indicia of a Black Market Peso Exchange?

Question31: Which type of transactions present the highest risk?

Question32: In which type of banking transaction is price manipulation, as a form of money laundering, a common practice?

Question33: Which statement is true about banking regulatory agencies having the authority to obtain information from regulated institutions?

Question34: What are the European Union Directives on Money Laundering?

Question35: On who does the ultimate responsibility for an institution's anti-money laundering program rest?

Question36: What are three potential issues for foreign financial institutions maintaining correspondent accounts with U.S. banks under the Patriot Act? Choose 3 answers

Question37: An anti-money laundering expert is hired by a new Internet bank to assess the money laundering threat to the bank. What is the most important recommendation for the expert to make given it is an on-line bank?

Question38: In order to protect investigative materials from disclosure when conducting an internal
Investigation of any employee of a financial institution, legal counsel of that financial
should________ ?

Question39: What facilitates law enforcement agent obtaining evidence from authorities in a foreign country relating to criminal activity?

Question40: Which element is generally required of all anti-money laundering programs?

Question41: An anti-money laundering specialist has just developed and implemented an anti-money laundering program. What is the most effective resource to evaluate the effectiveness of the program?

Question42: Which action should an FIU consider taking when it has information that might be useful to another FIU?

Question43: In some instances, a financial institution may receive a warrant from law enforcement authorities to search its premises. A search warrant is a grant of permission from a court for a law enforcement agency to search certain designated premises and seize specific categories of items or information. Generally, what is the required threshold for the requesting agency to establish in order to obtain a search warrant of a financial institution?

Question44: An anti-money laundering specialist working at a bank just received a legal request from a law enforcement agency mandating the release of all financial transaction records relating to an account at the bank. The specialist immediately recognizes the account as one owned by the bank Chief Executive Officier's brother. During research to gather the requested documents, the specialist finds several internal memos he had sent to the bank president with concerns regarding possible suspicious activity relating to this account. The specialist recalls the bank president verbally responded to each memo with an explanation of the activity and indicated there was no cause for concern. What should the specialist do with respect to these internal memos?

Question45: What is the term for trading through multiple accounts, where an individual generates offsetting profits and losses and transfers of positions through accounts that do not appear to be commonly controlled?

Question46: An AML compliance officer receives notice of government update including the names of the latest terrorists sanctioned by the United Nations Security Council. Which would be the most appropriate step to take?

Question47: What are three indicators of money laundering associated with using electronic funds transfers? Choose 3 answers

Question48: What are some of the methods for sharing information and cooperating on an international basis? Choose 3 answers

Question49: Why do government entities around the world believe that a risk-based approach to AML/CFT compliance is a preferable prescriptive measure?

Question50: Which statement is true about when an institute becomes aware that a particular employee is under investigation by law enforcement as a result of a subpoena or warrant?

Question51: What is suspicious activity or red flag with regard to a customer's activity? Choose 3 answers

Question52: The Board of Directors and the senior management of a financial institution should ensure that which three are established and followed with regard to an effective AML program?

Question53: When and how should an institution appraise the AML risk of a newly developed product?
Choose 3 answers

Question54: A customer comes into the bank and appears to be ill-at-ease waiting in the teller line. When the customer gets to the teller, he become exceedingly nervous and asks for a large cashier's check to be cashed and disbursed to him in $100 bills.
What should the teller do after completing the transaction?

Question55: What are some of the shortcomings in using letters regulatory? Choose 3 answers

Question56: In which three situations is correspondent banking most vulnerable to money laundering? Choose 3 answers

Question57: A remittance company received a money order from a senior political figure m the Philippines to transfer a large sum of money to a charity group in the Philippines. A review of the charity group revealed a director having dose ties with a known terrorist group primarily financed through kidnapping and extortion.
What is a key risk indicator associated with terrorism financing?

Question58: What was the topic the Wolfsberg Group's first guidance addressed?

Question59: A prospective AML officer comes highly recommended by a bank's up-stream correspondent institution of similar size and make-up, located in a different city in the same country. The bank is interested in hiring the individual. What should be the next step taken by the Board of Directors?

Question60: What is one recommendation of the Basel Committee's 2001 paper Customer Due Diligence for Banks"?

Question61: Federal law requires all U.S. financial institutions to secure and maintain all records and supporting documentation used m suspicious activity reporting for how many years?

Question62: What is an indicator of suspicious activity?

Question63: A compliance officer is looking to modify procedures covering correspondent banking relationships. Which three would be recommended under the Wolfsburg Principles on Correspondent Banking? Choose 3 answers

Question64: How does a regulatory body typically obtain international assistance in a money Laundering inquiry?

Question65: Which three circumstances are indicators for defining a customer as required additional diligence according to the Wolfsberg Principles on Private Banking? Choose 3 answers

Question66: Which three entities does the Third European Union Money Laundering Directive apply to?

Question67: With which person(s) should an anti-money laundering officer coordinate when implementing a new hire screening program?

Question68: Which three are principles found in the document "Principles of information Exchange between Financial Intelligence Units (FIUs)"?

Question69: What is a major money laundering risk associated with a number of prepaid cards as opposed to credit or debit cards?

Question70: The marketing department presents a business plan targeting individuals holding important public positions. What are some steps the financial institution should implement as part of the plan to target such individuals?

Question71: An anti-money laundering specialist at a large institution is responsible for information senior management about the status of the anti-money laundering program across the organization.
Which report is the most useful?

Question72: When an institution conducts an internal investigation into an account following a law enforcement inquiry, it should consider a number of factors to independently determine if the account should be dosed. Which three considerations should be made when making the determination about closing an account? Choose 3 answers

Question73: A customer comes into a financial institution and deposits a large amount of cash. He has never done that before. When asked about the deposit, he indicates he recently sold a used car and received cash.
He does not trust forms of payment and is wary of counterfeit money orders. What should the bank do?

Question74: When providing reporting of STRs to the board, which of the following should be provided?

Question75: To guard against acquisition or control of a financial institution by money launderers or their associates, what should supervisory agencies require?

Question76: An anti-money laundering specialist has been asked to create internal anti-money laundering policies, procedures and controls for a recently chartered offshore financial institution.
Which three should be included? Choose 3 answers

Question77: How should a financial institution deter money laundering through new accounts? Choose 3 answers

Question78: An account officer who maintains an excellent relationship with the finance manager for a correspondent bank customer learns that many records for the correspondent bank have been requested by law enforcement. In the interest of maintaining a good relationship with the customer, the account officer sets up a meeting to discuss the legal request with the customer. The account officer intends to discuss points related to the investigation during the meeting.
What should an anti-money laundering specialist recommend?

Question79: What poses the greatest money laundering risk for a financial institution offering on-line services to customers?

Question80: Which statement about U.S. Specified Unlawful Activities (SUA) is true?

Question81: The bank for International Settlements provides the secretariat for which organization?

Question82: The purpose of an anti-money laundering program should be to do what?

Question83: Which three criteria does a shell bank meet according to the Wolfsberg Principles on Correspondent Banking? Choose 3 answers.

Question84: What should a bank focus on to ensure on-going compliance with its AML program?

Question85: In performing a risk analysis, which factor(s) should a financial institution review?

Question86: A junior account manager within an international private bank in Country A was asked by one of his valued customers, who has held an account for several years in the institution, about depositing a large sum of cash into her account. The junior account manager informed his customer that his bank does not accept cash. The junior account manager later reviewed a customer activity report and noticed a number of smaller dollar wires from banks in neighboring Country B, which has lax currency controls, that totaled about as much as the customer intended to deposit.
What should the junior account manager do?

Question87: A compliance officer at a small local bank reads in the newspaper that a high ranking local public official, who is a long-standing account holder, is being investigated by the competent authorities for accepting bribes. The compliance officer immediately checks the official's account and new account the official opened at the bank a few weeks ago. The compliance officer's investigation of these accounts discloses that the official's long-standing account had no unusual activity and that the recently opened had no activity since it was opened. What should the compliance officer do next?

Question88: Which of the following is the most common risk with a Personal or Private Investment Company (PIC)?

Question89: A commission regotorie would be used in which gateway to obtain information from another country?

Question90: How do drug traffickers and other criminals use the fine art industry to disguise illicit proceeds?

Question91: What are some useful tools or methods in conducting an internal AML investigation? Choose 3 answers

Question92: Which three do the Office of Foreign Asset Control regulations cover? Choose 3 answers

Question93: A customer has held an account at a local credit institution for 10 years. The account has received deposits twice weekly for the same amount and has never shown signs of suspect behavior. Monitoring software indicated that in the past few months the account has received several large deposits that were not in line with the account history. When asked, the customer states she recently sold a piece of property, which is supported with a proof of sale. What should the compliance officer do next?

Question94: What are three elements of a sound Customer Due Diligence Program?

Question95: In addition to monitoring for suspicious activity, what are electronic monitoring systems also valuable for?

Question96: What are some red flags financial institutions should be aware of when trying to verify the identity of a customer? Choose 3 answers

Question97: In relationship to life insurance business, the third European Directive states that Member States may allow the identity verification of the beneficiary under the policy after the business relationship has been established, but before which events?

Question98: Which primary international authoritative body designates sanctions?

Question99: What are three factors a financial institution should examine with regard to a new customer who is opening up a new account? Choose 3 answers

Question100: Which AML standards have force of law?

Question101: CORRECT TEXT
According to the Financial Action Task Force 40 Recommendations, simplified customer due diligence or reduced measures could be acceptable for which of the following types of products or transactions?
1.Life insurance policies where the annual premium is no more than USD/EUR 1,000 or a single premium of no more than USD/EUR 2,500.
2.Insurance policies for pension schemes if there is no surrender clause and the policy cannot be used as collateral.
3.A ptfiisiui i Ll idL pr uviJcfb lelir emei it bei lefils Lu employees.
4.Trusts where the settlor, trustee and beneficiaries are identified and the shares are in bearer form.

Question102: After evaluating recent changes to international standards, an anti-money laundering specialist should consider enhanced due diligence on accounts held by which three groups of people?

Question103: What are some red flags pertaining to potentially suspicious transactions by a customer? Choose 3 answers

Question104: Which three should real estate agents include in the criteria to assess their company's potential money laundering and terrorist financing risks when implementing a reasonable risk-based approach?

Question105: What describes the Black Market Peso Exchange money laundering method?

Question106: What should a compliance officer do during an ongoing investigation into a client's activities by a competent authority?

Question107: Which customer transaction with a securities dealer would indicate the highest supicion of money laundering?

Question108: What is a criterion for FATF membership?

Question109: According to experts, what is the most effective way to prevent money laundering through financial institutions?

Question110: When requested by law enforcement via legal process to provide records or documentation, what should the officers of financial institution do?

Question111: What are three risk factors a financial institution should examine with regard to a proposed new product?

Question112: An audit completed the previous week revealed that a private banking customer submitted incomplete documents when establishing an account earlier m the year. The customer received weekly electronic fund transfers from a narcotic-producing jurisdiction. While the relationship manager who opened the account is on leave for 5 weeks, the customer requests that the institution remit a substantial sum to a country that represents a high risk of money laundering. The relationship manager is a friend of the anti-money laundering specialist. What should the anti-money laundering officer do first?

Question113: In May 2002, the Wolfsberg Principles on Private Banking were revised and included a section that prohibits the use of internal non-client accounts in a manner that would prevent officials from appropriate monitoring movements of funds or keep clients from being linked to the movement of funds on their behalf.
What is another name for these internal, non-client accounts?

Question114: What is operational risk?

Question115: What kind of person should perform the independent testing of an institution's anti-money laundering program?

Question116: Pursuant to the Third European Union Money Laundering Directive, how long after being out of prominent office should a person NOT be considered to be a Politically Exposed Person (PEP)?

Question117: What is a key element required to ensure an anti-money laundering compliance program is effectively embedded into an institution's culture?

Question118: What should law enforcement provide when asking an institution to keep an account open?

Question119: How can dealers in high-value items be at risk for money laundering?

Question120: What was cited by the Wolfsberg Group in its Statement on the Suppression of the Financing of Terrorism as being vulnerable to terrorist financing?

Question121: What does designing a country as being of "prime money laundering concern" allow the U.S. government to do?

Question122: Which three are the most commonly used risk criteria?

Question123: A compliance officer is looking to update an institution's private bank procedures. What should be included as recommended by the Wolfsberg AML Principles on Private Banking?

Question124: In many jurisdictions, financial institutions are prohibited from hiring a person who has been convicted of what type of offense?

Question125: Which three areas do FATF's 40 recommendations cover? Choose 3 answers

Question126: When an institution files an STR with regard to a particular account, what steps should the institution take visa account?

Question127: According to the Financial Action Task Force 40 Recommendations, Designated Non-Financial Businesses and Professionals include which entities?

Question128: What is most valuable when using the internet as an investigative source?

Question129: Which three characteristics make non-profit organizations vulnerable to misuse for terrorist financing?

Question130: In the FATF 40 recommendations, the focus of AML efforts has been expanded beyond Financial Institutions. Which three businesses and/or professions are covered? Choose 3 answers

Question131: In general, what is an element that a financial institution or business does not have to specifically address in an anti-money laundering program?

Question132: Which two aspects of the security broker dealer industry increase its exposure to money laundering? Choose 2 answers

Question133: When the minimum CDD standards of the home and host countries differ, the offices in the host countries should follow which requirements?

Question134: A profitable commercial customer who operates an import-export business has multiple accounts with the same institution at branches m different locations. The customer receives funds from a jurisdiction perceived as highly corrupt according to Transparency International ratings. The customer makes frequent transfers among the accounts and prefers to manage the accounts separately. What should the institution do to mitigate the risk associated with these accounts?

Question135: To ensure that an institution's anti-money laundering program is current, which step should be taken?

Question136: Which situation is the highest risk fr money laundering and terrorist financing activity?

Question137: Which action should be taken regarding a particular account once suspicious activity is reported by the institution?