EMT Practice Test

1. Question Content...

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Question1: 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?

Question2: 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?

Question3: What are two legal risks of having inadequate privacy policies and procedures? (Choose two.)

Question4: In the summer, an institution identifies anti-money laundering concerns regarding a customer's account activity. The customer, an ice cream, has deposited a lot of checks drawn on banks in foreign countries, sent large number of high dollar international wires to different countries, made cash deposits of a few hundred dollars every few days and written multiple checks for a few hundred dollars to the same dozen payees every two weeks.
Which two transaction types warrant investigation? (Choose two.)

Question5: An internal investigation log is primarily intended to:

Question6: The USA PATRIOT Act requires United States (U.S.) financial institutions to collect certain information from non-U.S. banks that hold a correspondent account.
Which two pieces of information must a non-U.S. bank provide to its U.S. correspondent to enable them to comply with this requirement? (Choose two.)

Question7: A law enforcement agent calls a bank anti-money laundering investigator for supporting information about a suspicious transaction report that was filed the previous month.
How should the investigator respond?

Question8: What is the most effective criterion for determining the beneficial ownership of funds?

Question9: Which of the following customers require the most enhanced due diligence?

Question10: 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?

Question11: What is the intentional evasion of a reporting or recordkeeping requirement?

Question12: Which method do terrorist financiers use to move funds without leaving an audit trail?

Question13: A foreign politically exposed person (PEP) requests to add a beneficiary to a file insurance policy.
How should the request be processed to mitigate risk?

Question14: 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.
Which of the following should the compliance officer do next?

Question15: What are two sources for maintaining up-to-date sanctions information? (Choose two.)

Question16: Which of the following poses the greatest money laundering risk for a financial institution offering on-line services to customers?

Question17: An anti-money laundering specialist at a large institution is responsible for informing senior management about the status of the anti-money laundering program across the organization. The global institution handles retail banking, commercial banking, global markets, private banking and has an affiliated securities dealer.
The specialist and the team provide corporate strategic direction to these areas on anti-money laundering related subjects. The following information is reported to executive management on a regular basis:
* Total number of suspicious transactions identified and reported
* Suspicious transaction trends
* Training that has occurred for the various units
* Status report on the anti-money laundering regulatory environment
* Summary of exception reports
Which of the following additional elements is the most useful?

Question18: A division anti-money laundering officer for a financial institution has been conducting a monthly self-assessment.
The officer reviews the accounts opened for 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.
Which of the following is the next course of action for the anti-money laundering officer to take?

Question19: An offshore company is owned by four equal partners that reside in separate jurisdictions. One partner presents an authenticated power of attorney apparently executed by the remaining three partners in his favor and requests that a bank account be opened on behalf of all partners. He needs this done quickly because there is a large deposit pending. The account-opening officer contacts the bank's anti-money laundering officer for advice. Which of the following should the anti-money laundering officer advise as an initial step?

Question20: Which of the following facilitates law enforcement agents obtaining evidence from authorities in a foreign country relating to criminal activity?

Question21: What was cited by the Wolfsburg Group in its Statement on the Suppression of the Financing of Terrorism as being vulnerable to terrorist financing?

Question22: 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 of the following should be included?

Question23: What are two reasons physical certificates present a money laundering risk to broker-dealers? (Choose two.)

Question24: Historically, a tour guide has made monthly cash deposits averaging $10,000. Over the past three months, the monthly deposits have averaged $100,000. When the financial institution questions the increased deposits, the tour guide explains that there have been numerous conventions in town so business has increased substantially.
Which further action(s) should the financial institution take?

Question25: Which two factors should increase the risk of a correspondent bank customer and require additional due diligence according to the Wolfsberg Anti-Money Laundering Principles for Correspondent Banking? (Choose two.)

Question26: What should law enforcement provide when asking an institution to keep an account open?

Question27: What does the Financial Action Task Force 40 Recommendations address on transparency of beneficial ownership?

Question28: A personal banking customer who simultaneously opens several accounts will most likely cause further inquiry in which of the following scenarios?

Question29: 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 of the following item s should be delivered?

Question30: In which two ways does a government Financial Intelligence Unit interact with public and private sectors?
(Choose two.)

Question31: How does a regulatory body typically obtain international assistance in a money Laundering inquiry?

Question32: What type of records do the recordkeeping requirements of section 319 of the Patriot Act require U.S. banks to collect and maintain records of in the U.S. for each non-U.S. bank with which it maintains a correspondent relationship?

Question33: Historically, which of the following vehicles is most often used to hide beneficial ownership?

Question34: A financial institution is reorganizing and the anti-money laundering officer is now required to report to the Sales Director. Which of the following statements about this situation is most correct?

Question35: After several months of research, the Director of Marketing and the Managing Director of Business Development received approval to launch a branded, stored-value card that will be marketed to the diverse, primarily non-resident population that comprises the bank's current customer demographics. The Chief Credit Officer and the Risk Officer have also been involved in the efforts to develop the card. After the card is launched, the anti-money laundering officer is consulted. The anti-money laundering officer should advise the bank that compliance should have been involved

Question36: Which practices are dealers in antiques, precious metals, precious stones, jewelry, and art advised to follow to reduce the element of money laundering risk? Choose 3 answers

Question37: When and how should an institution appraise the AML risk of a newly developed product? Choose 3 answers

Question38: A commission regotorie would be used in which gateway to obtain information from another country?

Question39: Which three areas do FATF's 40 recommendations cover? Choose 3 answers

Question40: What are the attributes of "Cuckoo Smurfing" the money laundering term FATF added in 2005?

Question41: What indicates potential money laundering activity by a lawyer?

Question42: Separating illicit proceeds from their source by a series of complex financial Transactions designed to disguise the audit trail and provide anonymity is an example of what?

Question43: What should a compliance officer do during an ongoing investigation into a client's activities by a competent authority?

Question44: A national Financial Intelligence Unit, which is responsible for receiving, analyzing and disseminating disclosure of financial information, should consider becoming a member of what organization?

Question45: A customer runs an export business for agricultural products. There has been steady growth over the years from sales to the Caribbeanregion. A sudden increase is noted in this customer's account balances during the last month. On what grounds should an anti-money laundering specialist prepare a suspicious transaction report?

Question46: A financial institution files a suspicious transaction report on a customer as the result of a high volume of large currency deposits to pay off a loan.
A law enforcement officer calls the anti-money laundering officer to discuss the suspicious transaction report.
Which of the following is the anti-money laundering officer legally permitted to do?

Question47: An anti-money laundering specialist is employed by a large multi-national bank. The bank is planning to open an international department that will be responsible for expanding services to various countries. The head of the new international department has asked specialist to assess risks associated with the bank's expansion plans. What three set of materials should be included as a reference? Choose 3 answers

Question48: Upon filing a suspicious transaction report, which of the following elements should be the highest anti-money laundering priority in making the decision to keep the account open?

Question49: An anti-money laundering audit identifies a significant weakness in how transaction monitoring alerts are cleared. Audit sampling identified potentially suspicious activity that was cleared as not suspicious.
Management accepts the audit finding and develops a remediation plan.
What is the role of the auditor during the correction phase?

Question50: An institution is about to release a new peer to peer (P2P) funds transfer product to provide much needed remittance services to an under-banked population segment in the country.
The service allows customers to transfer funds through a mobile banking application to individuals worldwide entering only a name and mobile number. The new service charges less than comparable market solutions and offers real time transfer of funds. The customer onboarding process is conducted at branch locations with identity verification.
Which three present the highest anti-money laundering or sanctions risk and will require controls prior to launch? (Choose three.)

Question51: An anti-money laundering specialist is employed by a large multi-national bank. The bank is planning to open an international department that will be responsible for expanding services to various countries. The head of the new international department has asked the specialist to assess risks associated with the bank's expansion plans. Which of the following materials should be included as a reference?
1. USA PATRIOT Act
2. Financial Action Task Force 40 Recommendations
3. Customer Due Diligence for Banks issued by the Basel Committee on Banking Supervision
4. The Egmont Group Statement of Purpose

Question52: What must be materially true regarding transactions for United States (U.S.) sanctions laws to have jurisdiction?

Question53: What three attributes do havens for money laundering and terrorist financing typically have? Choose 3 answers

Question54: How do drug traffickers and other criminals use the fine art industry to disguise illicit proceeds?

Question55: How should a financial institution respond to a verbal request from a law enforcement agency to keep an account open to assist in an investigation?

Question56: Which of the following is considered a shell bank as defined by the USA PATRIOT Act?

Question57: Which two factors assist a money laundering investigation that involves multiple countries? (Choose two.)

Question58: According to the Financial Action Task Force 40 Recommendations, Designated Non-Financial Businesses and Professions include

Question59: A European Union (EU) bank has a correspondent banking relationship with a U.S. bank. Under USA PATRIOT Act Section 311, the U.S. government has enacted special measures against a designated entity that has a payable-through account with the EU bank. Which of the following actions might the U.S. bank be required to take regarding the EU bank's services for the designated entity?

Question60: 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?

Question61: With which of the following should an anti-money laundering officer coordinate when implementing anew hire screening program?

Question62: Which three are best practices for embedding compliance into an institution's culture? Choose 3 answers.

Question63: Which event occurs most frequently in money laundering in the insurance industry?

Question64: Which action does the Financial Action Task Force (FATF) recommend be taken against jurisdictions that have strategic deficiencies?

Question65: 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?

Question66: A new compliance officer is reviewing the bank's anti-money laundering program and notices that the risk assessment was completed six months ago. Since that time, the bank acquired another financial institution, renamed the internal records group, and streamlined cash handling procedures.
Which factor causes the compliance officer to update the bank's risk assessment?

Question67: A bank compliance officer discovers cash deposit activity inconsistent with the expected and historical cash activity within the personal accounts of the chairman of the board. The cash activity appears structured to avoid the local legal filing requirements for large cash transactions, and a suspicious transaction report (STR) was filed.
How should the compliance officer report the filing of the STR to the board of directors without revealing the existence of the filing to the subject?

Question68: The Board of Directors for a small private bank has asked the management to no longer apply the identity requirements for high net worth individuals to protect their privacy. Which of the following Financial Action Task =once 40 Recommendations should cause an anti-money laundering specialist the most concern?

Question69: 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?

Question70: Which activity is most likely to facilitate money laundering through on-line banking systems with inadequate controls?

Question71: To guard against acquisition or control of a financial institution by money launderers or their associates, supervisory agencies should require

Question72: On-line financial technologies are susceptible to money laundering risk because

Question73: An anti-money laundering specialist has been asked to establish a compliance program to detect and prevent money laundering and terrorist financing. Which of the following should the anti-money laundering specialist consider in developing the program?

Question74: Which statement about U.S. Specified Unlawful Activities (SUA) is true?

Question75: 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?

Question76: Once a financial institution has reported suspicious transactions on a valued customer, it should cooperate with competent authorities by

Question77: The most effective tool used to detect structured transactions is

Question78: On who does the ultimate responsibility for an institution's anti-money laundering program rest?

Question79: Which situation is the highest risk fr money laundering and terrorist financing activity?

Question80: A relationship manager in a bank has had a private banking customer for 10 years. The customer has business accounts and investments and seeks advice on the creation of a company overseas. The relationship manager refers the customer to the commercial banking manager and vouches for the customer. Which of the following risk factors is the most important?

Question81: AML cooperation between countries consists of which three official gateways?

Question82: A charity has unaudited accounts. Which of the following represents the highest risk factor for terrorist financing?

Question83: 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?

Question84: Findings from a regulatory examination report states that the job descriptions of personnel outside of the compliance department do not include references to anti-money laundering responsibilities.
Which action should the firm take?

Question85: When an institution files an STR with regard to a particular account, what steps should the institution take via account?

Question86: What is an example of the integration stage of money laundering involving a bank or another deposit-taking institution?

Question87: Which of the following reflect money laundering risk indicators in relation to a securities account?

Question88: What are two requirements of United States financial institutions when conducting business with an international institution as a result of the USA PATRIOT Act? (Choose two.)

Question89: What is one recommendation of the Basel Committee's 2001 paper Customer Due Diligence for Banks"?

Question90: The most important concerns imposed on foreign financial institutions maintaining correspondent accounts with U.S. banks under the USA PATRIOT Act are:
1. Cancellation of correspondent banking relationships.
2. Forfeiture of funds in a U.S. interbank account.
3. Prohibition of correspondent accounts for shell banks.
4. U.S. residents maintaining private banking accounts.

Question91: An anti-money laundering consultant audits a bank's current anti-money laundering policies, procedures and controls. The bank serves high-income, high net-worth clients who include non-residents and offshore businesses. During a review of the customers list, the anti-money laundering consultant determines that he and the bank have mutual clients. The bank's written anti-money laundering program includes a process for the bank to establish the identity of the person with whom they conduct business, but does not address monitoring of customer account activity.
The consultant should recommend the bank:

Question92: Which of the following activities is most likely associated with a lawyer participating in a money laundering scheme?

Question93: Trusts established in certain offshore jurisdictions make good vehicles to lay under money for which ofthe following reasons?

Question94: Which primary international authoritative body designates sanctions?

Question95: A non-U.S. bank asks its U.S. correspondent whether there is risk of having funds seized in their correspondent account if a customer is involved in a predicate offense.The correspondent bank's reply should be,

Question96: An anti-money laundering specialist has been hired by an independently-owned community bank to implement an anti-money laundering compliance program. This bank has recently seen a dramatic increase in the number of international electronic fund transfers from its commercial clients. The first thing the anti-money laundering specialist should do is

Question97: Which of the following is the financial stage of money laundering?

Question98: According to the Financial Action Task Force 40 Recommendations, to fulfill identification requirements concerning legal entities, financial institutions should take measures to verify

Question99: What should countries do to help prevent non-profit organizations from being abused for the financing of terrorism according to the Financial Action Task Force 40 Recommendations?

Question100: What poses the greatest money laundering risk for a financial institution offering on-line services to customers?

Question101: 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?

Question102: Why would a credit card account likely not be used in the placement stage of money laundering?

Question103: The compliance officer at a crowd funding website is in charge of monitoring new crowd funding projects.
Recently, the number of crowd funding projects has significantly increased.
Which red flag indicates the highest anti-money laundering risk?

Question104: An anti-money laundering specialist is employed by a large multi-national bank. The bank is planning to open an international department that will be responsible for expanding services to various countries. The head of the new international department has asked the specialist to assess risks associated with the bank's expansion plans. Which of the following materials should be included as a reference?

Question105: Which precaution will a money launderer take to avoid detection when sending electronic transfers?

Question106: As a result of an audit, a policy exception was identified that had been approved by the compliance officer.
The auditor determined that the policy exception is a violation of a regulatory requirement.
What should the auditor do?

Question107: A bank located in New York has identified suspicious transactions at a correspondent bank in ChinA. For one of the international customers, the correspondent bank is not following agreed upon protocols.
Which factor indicates that the bank should terminate the relationship?

Question108: According to experts, what is the most effective way to prevent money laundering through financial institutions?

Question109: According to the Financial Action Task Force Special Recommendations on Terrorist Financing, which of the following should an anti-money laundering specialist do if the specialist has reasonable grounds to suspect funds are linked or related to terrorist acts?

Question110: A businessman requests a European private bank to open a numbered or alternate name account. According to the Basel Committee on Banking Supervision principles, which of the following is the most important question the banker should ask?

Question111: When creating an anti-money laundering program for a foreign bank with branches in the U.S., which three are included among the four minimum elements required under the USA Bank Secrecy Act? Choose 3 answers

Question112: A bank receives an anonymous tip from an employee about another employee through its confidential hotline.
Which activity warrants further review?

Question113: A financial institution located within the European Union has historically allowed anonymous accounts.
Which of the following is the best method for this institution to use to ensure compliance with the European Union Money LaunderingDirectives?

Question114: Why do government entities around the world believe that a risk-based approach to AML/CFT compliance is a preferable prescriptive measure?

Question115: Which method most likely indicates the placement stage of laundering dirty money in a land based casino?

Question116: Which method to launder money through deposit-taking institutions is closely associated with international trade?

Question117: According to the European Union Money Laundering Directives, "knowledge, intent or purpose"' required as an element for money laundering may be inferred from

Question118: 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?

Question119: When the minimum CDD standards of the home and host countries differ, the offices in the host countries should follow which requirements?

Question120: What are three indicators of money laundering associated with using electronic funds transfers? Choose 3 answers