EMT Practice Test

1. Question Content...

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Question1: 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.)

Question2: The new compliance officer has reviewed the bank's anti-money laundering training program. The program consists of online training for all new employees within 30 days of hire date and annual refresher training to all employees. In addition, there is specialized training for areas that deal with higher risk products and customers.
Over the last year, there have been no regulatory changes and no new products or services have been introduced. The compliance officer wants to propose to the board of directors that the annual refresher training is still current and can be delivered unchanged to all employees.
Which two critical pieces of information could be missed by taking this approach? (Choose two.)

Question3: The compliance officer for a private bank has been tasked with writing a policy on how the bank will deal with intermediaries.
Which two aspects should be included in the policy in respect of intermediaries to align it with the Wolfsberg Anti-Money Laundering Principles for Private Banking? (Choose two.)

Question4: How do payable through accounts (PTAs) differ from normal foreign correspondent accounts?

Question5: Which of the following activities conducted at a financial institution is the strongest example of avoiding reporting thresholds?

Question6: 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?

Question7: When should the anti-money laundering risk assessment be updated?

Question8: After evaluating recent changes to international standards, an anti-money laundering specialist should consider enhanced due diligence on accounts held by
1. lawyers.
2. foreign exchange dealers.
3. retail account holders.
4. precious metal dealers.

Question9: A bank sells reloadable open-loop prepaid cards to both customers and non-customers.
What is a red flag associated with these cards that may indicate money laundering?

Question10: A large cash deposit most likely reflects money laundering when it is:

Question11: A compliance officer was recently reviewing transactional data for an international charity and found transactions that present a higher risk.
Which reason is cause for terminating the banking relationship?

Question12: When hiring new employees, what should an institution do to ensure that the prospective employee is properly screened?

Question13: On who does the ultimate responsibility for an institution's anti-money laundering program rest?

Question14: Which step should be taken to understand the types of financial institutions to whom the services are being offered when a correspondent bank permits "nested" relationships according to the Wolfsberg Group?

Question15: A private banker of a major international bank is onboarding a new private investment company. The banker has verified the identity of the two directors, a husband and wife, who are equal shareholders. The funds in the account will be provided solely by the wife.
The banker was later informed by the company that an additional director and shareholder will be added to the company although the new shareholder will not provide funds.
What is the next step for due diligence in respect to the additional director and shareholder according to the Wolfsberg Anti-Money Laundering Principles for Private Banking?

Question16: What is the main role of the Egmont Group in combating money laundering and terrorist financing?

Question17: How does the Financial Acton Task Force (FATF) communicate its findings regarding jurisdictions with strategic anti-money laundering / Counter Financing of Terrorism deficiencies?

Question18: What is a key risk associated with Correspondent Accounts according to the Basel Customer Due Diligence paper?

Question19: 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?

Question20: A junior account manager within an international private bank in Country A noticed that one of his valued customers, who has held an account for several years in the institution, started making cash deposits in batches through various banks in Country B.
The account never received cash deposits and the junior account manager knew that banks in Country B were located very close to each other. What should the junior account manager do?

Question21: An organization's automated surveillance system identifies large fluctuations in customer activity. As a result of an audit, the compliance officer is informed that the system is not generating alerts when activity is consistently abnormal over a long period of time. Currently the organization is evaluating new alert scenarios in an attempt to address this problem.
Which type of scenario is helpful in mitigating this weakness?

Question22: What are three elements of a sound Customer Due Diligence Program?

Question23: A bank located in Arizona is considering a loan application for a new client. The collateral for the loan is a property in Florida.
The loan will be in the name of a limited company (LLC) whose ownership is not disclosed to the bank. The LLC was established by a New York-based attorney.
The loan will be repaid by the LLC in monthly wire transfers of $9,000 which is more than the required monthly payment.
Which aspect indicates the potential for money laundering?

Question24: A suspicious transaction report has been filed on an account owned by the wife of the bank's Chief Executive Officer. Which of the following is the most important consideration when deciding whether to recommend closing the account?

Question25: What are two requirements with respect to supporting documentation that is used to identify potentially suspicious activity, according to Financial Action Task Force? (Choose two.)

Question26: A bank in an offshore jurisdiction approaches an institution about opening a new correspondent banking relationship. Prior to opening the account, the new account representative obtains copies of the offshore bank's anti-money laundering policies and procedures, and all appropriate legal documentation for the bank; ascertains no third parties will be able to access the accounts; and determines the owners of the bank, the bank's primary business activities, and the business address of the bank. Which of the following steps does the Basel Committee on Banking Supervision's Customer Due Diligence for Banks Paper recommend the banker take prior to opening Oils correspondent account?
1. Conduct a site visit and meet all the principals and beneficial owners in person.
2. Verify the bank has a physical presence in the country where it is incorporated.
3. Confirm the bank is subject to regulatory supervision with adequate anti-money laundering laws.
4. Obtain and maintain a complete listing of the correspondent bank's customers, including politically exposed persons.

Question27: 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?

Question28: A compliance officer is tasked with implementing an enterprise-wide anti-money laundering program for a bank, which operates in multiple countries. Not all the bank products and services are available in all countries.
Which three factors should be considered as part of the approach? (Choose three.)

Question29: Bank A is a non-United States (U.S.) bank that has $5 million in a correspondent account at a bank in New York City. The Worldwide Terrorist Syndicate (WTS) has $1 million in its account at a non-US branch of Bank A.
The U.S. government has initiated forfeiture action against the WTS.
Which potential action can the U.S. take under the USA PATRIOT ACT pursuant to the issuance seizure warrant?

Question30: Which function provided by lawyers can be useful to a potential money launderer as documented by FATF in its typology report 2000-2001? Choose 3 answers

Question31: When requested by law enforcement via legal process to provide records or documentation, what should the officers of financial institution do?

Question32: Which aspect of the USA PATRIOT Act impacts foreign financial institutions?

Question33: A popular restaurant in town has begun depositing less cash than it has in prior years. In a review of the customer's accounts, you notice that credit card receipts have increased with no .
The account officer discovers that the restaurant has installed a privately-owned automated teller machine (ATM) onsite and has begun construction on a patio dining area.
Which red flag should trigger additional investigation?

Question34: In many jurisdictions, financial institutions are prohibited from hiring a person who has been convicted of what type of offense?

Question35: Which three conduits for moving terrorist-related funds do terrorist financing generally favor? Choose 3 answers

Question36: What is the result of an increased awareness of the potential for gatekeepers to assist in money laundering in recent years?

Question37: With which person(s) should an anti-money laundering officer coordinate when implementing a new hire screening program?

Question38: An institution has made the decision to exit a client relationship due to anti-money laundering concerns. Prior to starting the close out process, the institution receives a written request from a law enforcement agency to keep the account open. The client is the subject of an ongoing investigation and law enforcement wants the institution to continue to monitor the account and report any suspicious activity.
What is a primary consideration the institution should keep in mind when deciding whether to agree to this request?

Question39: Which of the following is among the Financial Action Task Force criteria defining non-cooperative countries and territories?

Question40: A commission regotorie would be used in which gateway to obtain information from another country?

Question41: What is operational risk?

Question42: Which three areas do FATF's 40 recommendations cover? Choose 3 answers

Question43: A financial institution has expanded its scope of services so that it is attracting the business of politically exposed persons (PEPs) who had previously never been part of the customer base.
Which two courses of action should the compliance officer include in the institution's procedures for considering PEPs as customers? (Choose two.)

Question44: 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.

Question45: According to the Financial Action Task Force 40 Recommendations, to fulfill identification requirements concerning legal entities, financial institutions should take measures to verify

Question46: A personal banking customer who simultaneously opens several accounts will most likely cause further inquiry in which of the following scenarios?

Question47: In which situation can money laundering adversely affect a country's currencies and interest rates due to launderers investing dirty funds?

Question48: Which statement about a multinational institution's ability to fully investigate unusual activity in all its foreign operations is correct?

Question49: 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?

Question50: What are two risks to institutions for violating anti-money laundering laws as demonstrated by the 2012 HSBC settlement with United States authorities? (Choose two.)

Question51: Which of the following competent authorities should directly receive suspicious or unusual transaction reports?

Question52: 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?

Question53: With which of the following should an anti-money laundering officer coordinate when implementing anew hire screening program?

Question54: Which three are principles found in the document "Principles of information Exchange between Financial Intelligence Units (FIUs)"?

Question55: A financial institution's monitoring system triggers an alert and an internal investigation has confirmed the activity as suspicious. Which of the following should an anti-money laundering specialist do before submitting the suspicious transaction report?

Question56: In May 2002, the Wolfsburg 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?

Question57: A client is a wholesale auto business that operates as a used car lot. The client regularly ships vehicles internationally. In a four-month period, the client received wires totaling $ 1,250,000 from a dealer in Benin in West AfricA. All wires originated from Benin and were in increments of $50,000.
Account debits made to the account were payable to various transport companies. All incoming checks reference various vehicles purchased. Dock shipping receipts produced by the client to support account activity identify the vehicles but cannot easily be tied to the wires receives.
What is the suspicious behavior?

Question58: 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?

Question59: Which of the following best describes the Black Market Peso Exchange money laundering method?

Question60: A large cash deposit most likely reflects money laundering when it is:
1. from a customer who has never conducted a transaction in cash before.
2. transacted in segments smaller than the reporting thresholds at various times during the day.
3. followed by an immediate wire transfer to an offshore secrecy haven.
4. by a customer who operates a cash-based business.

Question61: What are the attributes of "Cuckoo Smurfing" the money laundering term FATF added in 2005?

Question62: An institution has made the decision to exit a client relationship due to anti-money laundering concerns. Prior to starting the close out process, the institution receives a written request from a law enforcement agency to keep the account open. The client is the subject of an ongoing investigation and law enforcement wants the institution to continue to monitor the account and report any suspicious activity.
What is primary consideration the institution should keep in mind when deciding whether to agree to this request?

Question63: Which example describes the vulnerability of the securities sector for money laundering?

Question64: During a law enforcement investigative interview regarding potential money laundering, the suspect starts making assertions and statements that the investigator believes are false.
How should the investigator respond?

Question65: Under requirements for correspondent accounts in the USA PATRIOT Act, the word "certification" refers to a written representation by a

Question66: What are the regulatory risks to a bank employee who willfully violates anti-money laundering laws?

Question67: Which three criteria does a shell bank meet according to the Wolfsberg Principles on Correspondent Banking?
Choose 3 answers.

Question68: A branch manager for a small community bank has a new customer who deposits four EUR 50,000 checks into one account. Shortly thereafter, the customer goes to another branch and asks to transfer all but EUR 1,500 to three accounts in different foreign jurisdictions.
Which suspicious activity should be the focus of the suspicious transaction report?

Question69: 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

Question70: Under which two circumstances may law enforcement be given access to a financial institution customer's financial records? (Choose two.)

Question71: Why do governments and multi-national bodies impose economic sanctions?

Question72: Which method do terrorist financiers use to move funds without leaving an audit trail?

Question73: The marketing department presents to an anti-money laundering specialist a business plan targeting individuals holding important public positions. In addition to obtaining the proper identification and basic information from these customers, what else should the anti-money laundering specialist recommend a financial institution do to check the background and conduct enhanced due diligence based on public information?
1. Determine if a client appears on the Basel Committee on Banking Supervision's list of public officials.
2. Investigate the source of funds.
3. Identify people and companies that are clearly related.
4. Identify a person fully, including their political history.

Question74: 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.)

Question75: An anti-money laundering analyst is reviewing a new customer list to confirm potentially high risk customers have been identified and subject to enhanced due diligence.
Which new customer warrants enhanced due diligence?

Question76: To deter money laundering through new accounts, a financial institution should:

Question77: What are some useful tools or methods in conducting an internal AML investigation? Choose 3 answers

Question78: The local manager of a remote mortgage origination department of a financial institution has just discovered that sanctions screening of new customers is not being performed.
Which action should the local manager take in this situation?

Question79: A compliance officer at a large financial institution has been tasked by senior management to lead a team in an internal review and potential revision of the institution's customer onboarding program following a regulatory enforcement action of another institution.
Which step should the compliance officer perform first?

Question80: 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?

Question81: 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?

Question82: According to Basel Committee on Banking Supervision guidelines, which of the following statements best describes the relationship between the internal audit function and compliance?

Question83: Which of the following reflect money laundering risk indicators in relation to a securities account?
1. A high level of activity in that securities account immediately followed by a high volume of securities transactions.
2. Frequent wire transfers into an account immediately followed by debit card transactions.
3. Frequent wire transfers into an account immediately followed by checks (cheques) or other payment instruments drawn on the account.

Question84: A government has instituted new anti-money laundering laws which require all financial institutions to obtain certain information from its customers.
Which step should an institution located in this jurisdiction take to ensure compliance?

Question85: Which information must a United States financial institution retain for having foreign correspondent accounts as part of the USA PATRIOT Act record keeping requirements?

Question86: AML cooperation between countries consists of which three official gateways?

Question87: An internal investigation log is primarily intended to:

Question88: To ensure that an institution's anti-money laundering program is current, which step should be taken?

Question89: On what basis are international sanctions imposed against entities?

Question90: An anti-money laundering specialist notes a significant reduction in suspicious transaction report filings at a particular branch. Which of the following actions is most appropriate?

Question91: Transfers of money over the last 6 months to a corporation in a jurisdiction with strict secrecy laws triggered an alert. Which of the following should cause the most suspicion of money laundering?

Question92: 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?
1. A training program for senior management and staff.
2. An anti-money laundering compliance program, internal audit program, and procedure manual.
3. Basel Committee on Banking Supervision's capital adequacy requirements for the host country.
4. Compliance requirements of host and chartering countries.

Question93: 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?

Question94: Which action should countries take related to the financing of terrorist acts in accordance with the Financial Action Task Force 40 Recommendations?

Question95: A periodic review of the account of a small household goods business reveals multiple shipments of goods to a country classified by the bank as high risk. They were transshipped through another country prior to the final destination. In the past three months, volumes over 25,000 units. The business has been a customer of a bank for 10 years.
Records show previous shipments to destinations primarily in Europe involving quantities of 5,000 units or less. Recent shipments are listed as being received by the same company as the earlier shipments and payments are being received from the same originator, but the unit price of the goods is three times higher than before.
Which two red flags indicate potential trade-based money laundering? (Choose two.)

Question96: What was the topic the Wolfsberg Group's first guidance addressed?

Question97: An organization uses an automated surveillance system that generates a very large volume of anti-money laundering alerts. The monthly volume of alerts has increased over the last year causing the compliance staff to fall significantly behind reviewing the alerts. As a result, the system settings are under review to determine if they are appropriate.
Which action should be included in the evaluation of system settings?

Question98: A bank is preparing for its anti-money laundering independent review, which is performed every two years under the direction of the compliance officer. The bank's corporate audit department will conduct the review. The compliance officer will review the final report before it is released to the Board of Directors.
What is the issue with this situation?

Question99: What can a compliance officer do in the absence of automated software to conduct U.S. Department of the Treasury Office of Foreign Assets Control (OFAC) sanction screens?

Question100: Which of the following is considered a shell bank as defined by the USA PATRIOT Act?

Question101: Why do trusts established in certain offshore jurisdictions make good vehicles to launder money?

Question102: 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?

Question103: Which three are the most commonly used risk criteria?

Question104: Which of the following should an anti-money laundering specialist consider the most serious deficiency when detected during a regulatory audit of the anti-money laundering program?

Question105: An employee hears a colleague on the telephone with a customer giving advice on how to ensure that a suspicious transaction report will not be filed as a result of a future transaction.
What action should the employee take?

Question106: Which event occurs most frequently in money laundering in the insurance industry?

Question107: An institution receives a request for credit from a local company that has been a client for many years. The information provided by the company indicates that its assets have increased substantially with the addition of several new subsidiaries. Further research performed by the institution indicates the new subsidiaries are recently created shell companies.
Could this indicate potential money laundering?

Question108: 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?

Question109: An incoming urgent international wire transfer in U.S. dollars has been identified by the sanctions screening team. The transaction is a large rounded amount and the name of the beneficiary is "North Korean Cigars Company" with an address in an industrial zone in Tianjin, China.
Which action should the sanctions team take?

Question110: Which method to finance terrorism involves falsifying transaction-related documents?

Question111: To ensure compliance with economic sanctions established by governmental authorities in the jurisdictions where it operates, a financial institution requires that all new and existing customers be screened at onboarding and quarterly thereafter.
Is this step sufficient to ensure compliance?

Question112: 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?

Question113: Which of the following customer activities poses the highest risk of money laundering?

Question114: Why would a credit card account likely not be used in the placement stage of money laundering?

Question115: A bank employee reviews wire transactions looking for indications of wire stripping.
Which two actions should the employee take to complete appropriate bank procedures? (Choose two.)

Question116: What should a compliance officer do during an ongoing investigation into a client's activities by a competent authority?

Question117: What are two requirements for monitoring and reporting suspicious activity for correspondent banking according to the Wolfsberg Principles? (Choose two.)

Question118: In which type of banking transaction is price manipulation, as a form of money laundering, a common practice?

Question119: Which primary international authoritative body designates sanctions?

Question120: Which of the following facilitates law enforcement agents obtaining evidence from authorities in a foreign country relating to criminal activity?

Question121: In which two ways does a government Financial Intelligence Unit interact with public and private sectors? (Choose two.)

Question122: To ensure compliance with economic sanctions established by governmental authorities in the jurisdictions where it operates, a financial institution requires that all new and existing customers be screened at onboarding and quarterly thereafter.
Is this step sufficient to ensure compliance?

Question123: What does the Financial Action Task Force 40 Recommendations address on transparency of beneficial ownership?

Question124: What is the currency threshold under the European Union Fourth Anti-Money Laundering Directive?

Question125: The anti-money laundering compliance officer for a small money transmitter has several agent locations in the same geographic area in the United States. The customers are immigrants from Country A and the majority of the funds are remitted to Country A.
In a meeting with one of the agents, it is recently discovered that two new customers have been coming in three times a week and sending funds to the same recipient in Country B.
Each cash transaction always totals exactly $8,000.
What should alert the agent to possible money laundering activity by the two customers?

Question126: How should a financial institution deter money laundering through new accounts? Choose 3 answers

Question127: What might limit a compliance officer's ability to respond to a foreign law enforcement official's request to provide information with regard to an anti-money laundering investigation?

Question128: Which two channels can be utilized during a cross-border money laundering investigation to assist in gathering information according to Financial Action Task Force? (Choose two.)

Question129: 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 isdeemed suspicious by Bank A.

Question130: What does the Egmont Group's support for its members include?

Question131: How can dealers in high-value items be at risk for money laundering?

Question132: According to experts, what is the most effective way to prevent money laundering through financial institutions?

Question133: Which method is used to launder money via wire remittances sent through a bureau de change or money services business?

Question134: Which method is indicative of potential money laundering and terrorist financing activity?

Question135: 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 Officer'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. Which of the following should the specialist do with respect to these internal memos?

Question136: What is a method of placement that can be used by a money launderer in a deposit taking institution?

Question137: Which question about the respondent bank should a bank be able to answer before establishing correspondent accounts?

Question138: Which statement is true according to the FATF?

Question139: Which statement describes the relationship between the internal audit function and compliance?

Question140: A school teacher recently opened a private banking account with a major bank. The customer indicated annual income of EUR 45,000 and listed her source of wealth as a EUR 1.5 million inheritance from relatives. The customer plans to invest EUR 12,000 to 15,000 earned annually from bearer bonds. The relationship manager verified the client's identity and documented all of the above information in the account file before opening the account. During a routine review of the account, several electronic fund transfers in excess of EUR 5 million each were made from a diamond distributor. The relationship manager also noticed that in each instance, the customer immediately transferred the funds to bank accounts in Hong Kong. Which of the following is appropriate for the anti-money laundering specialist to recommend?

Question141: What are some of the shortcomings in using letters regulatory? Choose 3 answers

Question142: 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?

Question143: What are some red flags financial institutions should be aware of when trying to verify the identity of a customer? Choose 3 answers

Question144: What should law enforcement provide when asking an institution to keep an account open?

Question145: 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.
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4. Trusts where the settlor, trustee and beneficiaries are identified and the shares are in bearer form.

Question146: 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?

Question147: Which indicator should be suspicious to a compliance officer at a brokerage firm?

Question148: How does microstructuring differ from structuring?

Question149: Which of the following customers require the most enhanced due diligence?

Question150: How do drug traffickers and other criminals use the fine art industry to disguise illicit proceeds?

Question151: What does the Basel Committee's Customer Due Diligence for Banks paper suggest that a bank needs to have in place when establishing an account for a corporate business entity?

Question152: 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?

Question153: The anti-money laundering specialist of a small bank has identified suspicious activity at a branch located in an area of town where drug dealers are known to operate. An investigation of this activity discloses that the suspicious transactions occurred within the last 3 months and were processed by the same teller (cashier). The teller (cashier) did not file an internal report of unusual activity on these transactions. When checking personnel files, the specialist finds that the teller (cashier) has been a trusted employee for over 15 years, has an impeccable work record, and has participated in several anti-money laundering training sessions. The specialist recently became aware that the employee's daughter has contracted a rare disease and is undergoing a very expensive treatment program. Regarding the teller's (cashier's) failure to report the unusual activity to the institution, the specialist should recommend

Question154: An anti-money laundering specialist is concerned that several suspicious transaction reports will discuss potential illegal activity of bank employees. In this situation, which of the following is the immediate concern for the institution?

Question155: In addition to monitoring for suspicious activity, what are electronic monitoring systems also valuable for?

Question156: 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?

Question157: A bank's anti-money laundering section receives an anonymous tip that a customer might be engaging in possible money laundering.
Which two facts should be considered during the course of an investigation into this matter? (Choose two.)

Question158: Which three characteristics make non-profit organizations vulnerable to misuse for terrorist financing?

Question159: How can violations of anti-money laundering laws be a risk to individuals?

Question160: Which scenario is closest to the definition of money laundering the United Nations Convention against Transnational Organized Crime and Other Protocols provided?

Question161: What is true regarding disclosure to a law enforcement agency by a financial institution of the supporting documentation for a suspicious transaction report?

Question162: Which of the following best describes the Basel Committee on Banking Supervision's principles on customer due diligence?

Question163: When the minimum CDD standards of the home and host countries differ, the offices in the host countries should follow which requirements?

Question164: Which three are examples of best practices terms of ensuring an adequate AML program?

Question165: Which statement is true about banking regulatory agencies having the authority to obtain information from regulated institutions?

Question166: 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 Force 40 Recommendations should cause an anti-money laundering specialist the most concern?

Question167: Which action does the Financial Action Task Force (FATF) recommend be taken against jurisdictions that have strategic deficiencies?

Question168: Which product is considered to be of highest money laundering risk?

Question169: What is most valuable when using the internet as an investigative source?

Question170: Which two mechanisms should be implemented to assist with cross-border money laundering investigations? (Choose two.)

Question171: 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?

Question172: What is the primary action a financial institution should take before formulating its anti-money laundering program?

Question173: 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

Question174: Which three stages of money laundering are on-line banking vulnerable to?

Question175: A politically exposed person (PEP) maintains an account at a bank. Last month a money laundering analyst filed a suspicious transaction report about unusual wire deposits originated by unknown individuals in the home country of the official.
To whom should this situation be escalated?

Question176: 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?

Question177: Which activity is most likely to facilitate money laundering through on-line banking systems with inadequate controls?

Question178: How can a financial institution verify the nature and purpose of a business and its legitimacy?

Question179: What should an institution in their AML policies and procedures?

Question180: How can a 'free-look provision' as part of a life insurance policy help criminals to launder money?

Question181: What is the goal of the Egmont Group in providing a forum for Financial Intelligence Units (FIUs) around the world?

Question182: Upon a routine account review a money laundering investigator identified a number of large round dollar wire transfer deposits into a business account owned by a local auto repair shop. The wire transfers all originated from a country that is a known financial secrecy haven with poor anti-money laundering controls. The investigator concludes there appears to be no legitimate business purpose for the wire transfers and files a suspicious transaction report. The owner of the auto repair shop is popular in the community and is a well-known philanthropist.
To whom should the investigator escalate these concerns?

Question183: Why are Money Services Business (MSBs) frequently accused of being high risk for money laundering?

Question184: 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, had totaled about as much as the customer intended to deposit. What should the junior account manager do?

Question185: What are some of the methods for sharing information and cooperating on an international basis? Choose 3 answers

Question186: An internal investigation log is primarily intended to:

Question187: Which of the following are the most suspicious transaction indicators related to casino activities?

Question188: Under the Wolfsburg AML Principles on Private Banking when establishing a relationship with a trust a financial institution should perform due diligence on which three parties? Choose 3 answers

Question189: Following a recent exercise which explained how a correspondent banking operation could be used by money launderers, an anti-money laundering specialist decided to re-write the due diligence procedures for entering into agreements with foreign financial institutions. Which of the following information should be included to establish a rigorous "Know Your Respondent" procedure?