EMT Practice Test

1. Question Content...

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Question1: What is the intentional evasion of a reporting or recordkeeping requirement?

Question2: A new accounts representative recently opened an account for individual whose stated employment is tutoring students.
Which customer action indicates possible money laundering?

Question3: A money remittance business will most likely attract money launderers because it
1.deals primarily in cash transactions.
2.engages in international transactions.
3. conducts transactions for walk-in customers.
4.does not have to comply with transaction reporting.

Question4: When must a United States (U.S.) bank block or reject an international funds transfer when there is an Office of Foreign Assets Control designated party to the transaction?

Question5: A startup virtual currency exchange has registered as a money services business and will commence operations in six months. The company will provide digital wallets to customers to hold their virtual currency after purchase. Customers will have the option to conduct purchases of the virtual currency and transfer the currency to and from the digital wallet. The startup must develop an anti-money laundering compliance program prior to launch.
Which two anti-money laundering responsibilities should be considered before business launch? (Choose two.)

Question6: A compliance officer learns from an Information Technology (IT) source of a potential new financial service being discussed by the new product approval committee.
What is the correct next course of action?

Question7: In reviewing recent activity, a compliance officer for a money transmitter that several customers are each remitting the same amount of money but much more frequently.
How should the institution respond?

Question8: With which of the following should an anti-money laundering officer coordinate when implementing anew hire screening program?

Question9: The ultimate goal of economic sanctions is to:

Question10: 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.)

Question11: What must be materially true regarding transactions for United States (U.S.) sanctions laws to have jurisdiction?

Question12: 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?
1.Respondent's management, nature of license, and major business activity.
2. Computer equipment and software capability.
3. The quality of supervision in the home country.
4. Respondent's location, in particular the existence of a real physical presence.

Question13: A customer has held an account at a bank and has lived locally for over 25 years. Historically he has come into the bank monthly to deposit a $1,500 retirement check from the company where he worked. He is well known at the bank and often brings the staff cookies. Over the past four months, he has come into the bank every Monday, Wednesday, and Thursday to make $3,000 cash deposits into his account. A review of his account shows that an $8,500 check made out to cash clears his account each week. The bank has decided to file a suspicious transaction report (STR).
What is the important fact to include in the STR?

Question14: Which two statements in the Wolfsberg Group's "Suppression of the Financing of Terrorism" define the role financial institutions should play in the fight against terrorism? (Choose two.)

Question15: What is the primary action a financial institution should take before formulating its anti-money laundering program?

Question16: According to the European Union Money Laundering Directives, "knowledge, intent or purpose"' required as an element for money laundering may be inferred from

Question17: 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.)

Question18: Which of the following customers require the most enhanced due diligence?

Question19: An internal investigation log is primarily intended to:

Question20: 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?

Question21: 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?

Question22: Which two methods have terrorist groups used to diversify their revenue stream and to fund their operations?
(Choose two.)

Question23: Why do governments and multi-national bodies impose economic sanctions?

Question24: Outgoing foreign transactions of similar amounts trigger a monitoring alert for a customer's accounts. During the evaluation of the accounts, the bank discovers the wire transfers were very small amounts and occurred within the last 3 months following a long period of inactivity. The wire transfers appear to originate from legal sources. To assess the potential of terrorist financing, the institution must ensure the

Question25: 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?

Question26: 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?

Question27: When creating an anti-money laundering program for a foreign bank with branches in the United States, which of the following are included among the four minimum elements required under the USA PATRIOT Act?
1. The development of a Know Your Customer program.
2. An ongoing employee training program.
3. The designation of a compliance officer.
4. An independent audit function to test the program.

Question28: In which two ways does a government Financial Intelligence Unit interact with public and private sectors?
(Choose two.)

Question29: Which three circumstances are indicators for defining a customer as required additional diligence according to the Wolfsberg Principles on Private Banking? Choose 3 answers

Question30: Which key aspect of the Office of Foreign Assets Control's extraterritorial reach specifically relates to prohibited transactions?

Question31: What do the Financial Action Task Force (FATF) mutual evaluations of each member assess?

Question32: 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?

Question33: A banker in the credit department wants to assess the risk of all customers, and contacts the compliance officer to request a list of customers with suspicious transaction report filings.
What should be done to protect suspicious transaction report information?

Question34: Which requirement is included in the Fourth European Union Directive on money laundering?

Question35: Which method is indicative of potential money laundering and terrorist financing activity?

Question36: A compliance officer is reviewing the activity of the wire transfer department for the previous month and identifies an unusual wire transfer from a customer's account.
Which information should be included in the review of the customer's activity?

Question37: A customer brings $15,000 worth of chips into a casino and plays various games. The customer redeems all the remaining chips and requests a wire transfer of the proceeds to an unrelated third party.
What are two red flags that indicate money laundering? (Choose two.)

Question38: 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?

Question39: Under the USA PATRIOT Act, in which scenario would the US not have jurisdiction?

Question40: 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?

Question41: Which factor should a bank consider before sharing information about a customer with its broker-dealer affiliate in the case of an investigation?

Question42: What is a tool governments and multi-national bodies can use to prevent the proliferation of weapons of mass destruction?

Question43: Which element is generally required of all anti-money laundering programs?

Question44: 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?
1. Discuss any aspects of the reported activity.
2. Provide copies of the customer's loan documents.
3. Explain the customer's loan payment history.
4. Send the deposit documents referenced in the suspicious transaction report.

Question45: According to the Financial Action Task Force 40 Recommendations, Designated Non-Financial Businesses and Professions include

Question46: 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?

Question47: What kind of person should perform the independent testing of an institution's anti-money laundering program?

Question48: A retail bank has just acquired a credit card business. The bank's anti-money laundering policy requires that new employees are trained within 30 days of their hire date and refresher training is delivered to all employees on an annual basis.
Is the bank's existing anti-money laundering training adequate to be delivered to employee of the newly acquired credit card business?

Question49: Which scenario is closest to the definition of money laundering the United Nations Convention against Transnational Organized Crime and Other Protocols provided?

Question50: An automotive parts company in South America sends multiple $500,000 wire transfers per week to ABC Holdings Ltd. in Asia referencing payment for silk flower shipments. Research reveals Sunrise Holdings, Ltd is registered in the British Virgin Islands with no available ownership information.
What are two red flags that indicate how trade-based money laundering could be occurring in this instance?
(Choose two.)

Question51: A law enforcement agency is reviewing a suspicious transaction report (STR) filed by a financial institution for suspicious activity on a client's account.
Subsequently, the agency requests further information.
Which supporting documentation might the law enforcement agency request from the institution to facilitate its investigation?

Question52: Which three areas do FATF's 40 recommendations cover? Choose 3 answers

Question53: Which action does the Financial Action Task Force (FATF) recommend be taken against jurisdictions that have strategic deficiencies?

Question54: The line of business is responsible for creating, implementing and maintaining policies and procedures, as well as communicating these to all personnel. It must also establish processes for screening employees to ensure high ethical and professional standards and deliver appropriate training on AML policies and procedures based on roles and functions performed so employees aware of their responsibilities. To facilitate this, employees should be trained as soon as possible after being hired, with refresher training as appropriate.
To guard against acquisition or control of a financial institution by money launderers or their associates, what should supervisory agencies require?

Question55: 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?

Question56: What is a key risk associated with Correspondent Accounts according to the Basel Customer Due Diligence paper?

Question57: How should a financial institution deter money laundering through new accounts? Choose 3 answers

Question58: OFAC-issued regulations apply to which entities? (Choose two.)

Question59: 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?

Question60: 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?

Question61: Which method to launder money through deposit-taking institutions is closely associated with international trade?

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 primary international authoritative body designates sanctions?

Question64: Law enforcement submitted a request to a bank for information regarding one of its customers.
How should the bank respond according to Financial Action Task Force Guidance?

Question65: According to the Financial Action Task Force 40 Recommendations, Designated Non-Financial Businesses and Professionals include which entities?

Question66: 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

Question67: 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.)

Question68: 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.)

Question69: A bank account is established for a new business customer. The business was established five years ago with an address in another state. The business website contains few details other than stating it is a real estate business.
One principal has an international telephone number and appears to be living in another country. The other principal works out of a recreational vehicle.
What warrants enhanced due diligence in this scenario?

Question70: A commission rogatory would be used in which gateway to obtain information from another country?

Question71: 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?

Question72: When a bank performs a risk assessment, what areas should an institution focus on?

Question73: Which two statements are true regarding the European Union Money Laundering Directives? (Choose two.)

Question74: Which of the following is the financial stage of money laundering?

Question75: Why is the Mutual Legal Assistance Treaty (MLAT) a gateway for international cooperation?

Question76: The compliance officer for a private bank has been tasked with reviewing the procedure for authorized signatories on customer accounts to ensure it is in line with relevant Wolfsberg Anti-Money Laundering Principles for Private Banking.
Which three statements from the procedure are in line with Wolfsberg? (Choose three.)

Question77: 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.)

Question78: Which action should an FIU consider taking when it has information that might be useful to another FIU?

Question79: Which action should financial institutions with cross border correspondent banking activity be required to perform according to the Financial Action Task Force 40 Recommendations?

Question80: A corporate services provider in a European Union (EU) country has a prospect from an African country who deals in oil and gas. The prospect intends to develop an oil terminal in his home country with a $75 million dollar loan secured by a third party, which is a trust formed in a Caribbean island with a holding company based in a European secrecy haven. A young lady is presented as an ultimate beneficial owner who has gained her wealth through a fitness studio in her home country.
What are two red flags that could indicate money laundering or financing terrorism? (Choose two.)

Question81: What is an example of the integration stage of money laundering involving a bank or another deposit-taking institution?

Question82: What was the topic the Wolfsberg Group's first guidance addressed?

Question83: In many jurisdictions, financial institutions are prohibited from hiring a person who has been convicted of what type of offense?

Question84: 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?

Question85: Under which two circumstances may law enforcement be given access to a financial institution customer's financial records? (Choose two.)

Question86: In establishing procedures for the review of suspicious transactions and filling of STRs, what thing should an institution focus on?

Question87: 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?

Question88: What are two aspects of the Wolfsberg Anti-Money Laundering (AML) Principles for Correspondent Banking? (Choose two.)

Question89: 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.)

Question90: What does the Egmont Group's support for its members include?

Question91: 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.)

Question92: A United States (U.S.) bank was recently alerted by law enforcement of an increase in sale of large denomination U.S. bank notes to casas de cambio. They suspect that a Mexican syndicate is operating a money laundering scheme in the bank's jurisdiction.
Which two steps should be taken to trace funds through the bank to assist law enforcement in their investigation? (Choose two.)

Question93: What does the Financial Action Task Force (FATF) urge its members and all other jurisdictions to do when a jurisdiction is identified as having lax anti-money laundering / counter financing of terrorism controls?

Question94: A high-volume dealer of precious metals and stones in a high-risk jurisdiction is approached by a new customer interested in selling gold worth $200,000. The customer was referred by a longtime family friend of the dealer and provides no indication of background or business purpose for the sale. The dealer agrees to make the purchase based solely on the reference.
What is the money laundering red flag?

Question95: Which action indicates possible Penza scheme activity?

Question96: 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

Question97: 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?

Question98: 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?

Question99: To what extent should senior management and the Board of Directors be involved in the filing of any STR?

Question100: The Basel Committee on Banking Supervision issued a paper in October 2001 in which it presented a Know Your Customer framework and recommended standards applicable to

Question101: 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?

Question102: 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?

Question103: What types of things should an institution incorporate in it AML policies and procedures? Choose 3 answers

Question104: A director of a financial institution was convicted of laundering money as part of a Ponzi scheme and terminated. As a result of an internal investigation evidence proved that an employee assisted in the illegal activity.
Which action should the institution take?

Question105: What is an indicator of suspicious activity?

Question106: Which unusual or suspicious activity by a financial institution's (FI's) employee requires additional investigation and scrutiny?

Question107: What is a method of placement that can be used by a money launderer in a deposit taking institution?

Question108: A suspicious transaction report filed on a car dealer structuring deposits initiates a criminal investigation. The dealer changes branches and begins placing transactions with a frontline employee to whom the dealer has given numerous gifts.
This employee handles all of the dealer's structured deposits and does not report the suspicious activity internally.
The competent authority has advised the anti-money laundering specialist to avoid tipping off the employee until the investigation is finalized.
What action should the specialist take next?

Question109: An auction house dealing in fine art and antiques sells a well-known painting at a price of $12 million to an agent bidding for a group of local investors. The same painting sold ten years prior at auction for $5 million.
The auction house receives payment for the painting via wire transfer from an account maintained in an offshore jurisdiction by the investor group. No beneficial ownership information is available for the account.
What are the two money laundering red flags? (Choose two.)

Question110: 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?

Question111: What was cited by the Wolfsberg Group in its Statement on the Suppression of the Financing of Terrorism as being vulnerable to terrorist financing?

Question112: 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.)

Question113: 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?

Question114: When an institution files an STR with regard to a particular account, what steps should the institution take visa account?

Question115: The vice president of the foreign correspondent banking department at a large United States bank has been notified that a foreign bank with an offshore license wants to open a correspondent account.
Which two things must the vice president acquire under the USA PATRIOT Act? (Choose two.)

Question116: A bank employee recently opened an account for a new restaurant. Daily cash deposits over a three-month period are close to $9,500.
What are two red flags that indicate possible money laundering or terrorist financing? (Choose two.)

Question117: Which aspect of the USA PATRIOT Act impacts foreign financial institutions?

Question118: According to experts, what is the most effective way to prevent money laundering through financial institutions?

Question119: 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.)

Question120: The branch manager notices that a number of customers come in weekly and always use the same teller to process their deposits. The manager notices that the customers and the teller, who are from the same ethnic group, are speaking in a foreign language and every once in a while the customers from local ethnic restaurants will bring the teller lunch. The commercial customers that visit the teller generally deposit the same amount of cash each time they come in.
How should the branch manager respond to this activity?