EMT Practice Test

1. Question Content...

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Question1: A customer of a bank is an established art dealer. Within the KYC due diligence processes, which constitutes a triggering event that requires ongoing due diligence on this client?

Question2: The Head of Compliance was informed by external auditors of a finding that indicates an element of AML policy failed to comply with the regulatory requirement. Which action should the Head of Compliance take next?

Question3: Which of the following is the best action to take regarding a particular account once suspicious activity is reported by the institution?

Question4: 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?

Question5: Which of the following customer transactions with a securities dealer would indicate the highest suspicion of money laundering?

Question6: Which two aspects of precious metals pose the highest risk of money laundering? (Choose two.)

Question7: 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?

Question8: Which two methods have terrorist groups used to diversify their revenue stream and to fund their operations?
(Choose two.)

Question9: In many jurisdictions, financial institutions are prohibited from hiring a person who has been convicted of what type of offense?

Question10: Why is the Mutual Legal Assistance Treaty (MLAT) a gateway for international cooperation?

Question11: A compliance officer for a casino may suspect money laundering if an individual:

Question12: A compliance officer at a small community bank has been asked to review existing customer onboarding policies and procedures to ensure they adequately address anti-money laundering risks.
How should customer due diligence be implemented?

Question13: Which situations would require a financial institution (FI) to update its ML/TF risk assessment? (Choose two.)

Question14: A foreign bank's compliance officer receives a request for information from a US bank, alerting the foreign bank to the possibility that it may have transferred funds on behalf of an Office of Foreign Assets Control (OFAC>-sanctioned person, who holds an account with the foreign bank. Which statements are true with respect to said funds and the information in relation to the transaction under scrutiny? (Select Two.)

Question15: Who has the day-to-day responsibility of communicating and reinforcing the established anti-money laundering compliance culture and program?

Question16: When an institution files an STR with regard to a particular account, what steps should the institution take visa account?

Question17: 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.

Question18: Based on studies executed by the Organization for Economic Cooperation and Development (OECD), which occupations are particularly vulnerable to the use of false identities and identity theft?

Question19: Which information should be gathered as part of enhanced due diligence (EDD) for a high-risk customer?

Question20: To understand if the customer operates in line with the firm's risk appetite for a specific industry segment, a financial institution must:

Question21: Which type of sanctions are likely to be used first in order to avoid escalating violent conflicts and/or proliferation of weapons?

Question22: What are the rules imposed by the Office of Foreign Assets Control (OFAC) for legal entities and persons related to the US? (Select Two.)

Question23: What should a financial institution (FI) do in response to a formal law enforcement request to produce documents?

Question24: A precious metals dealer opens a new account with a bank. Which requires a referral to AML investigations for further review?

Question25: A retail bank prepares a yearly AML risk assessment. Which inherent risk factor is likely the most relevant?

Question26: According to Basel Committee on Banking Supervision guidelines, which of the following statements best describes the relationship between the internal audit function and compliance?

Question27: During the course of work on behalf of a client, a lawyer participated in the movement of money. If the lawyer suspects an act of money laundering, which of the following should the lawyer do according to European Union Money Laundering Directives?

Question28: Cybersecurity risk can result in identity theft by:

Question29: 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.

Question30: Which three criteria does a shell bank meet according to the Wolfsberg Principles on Correspondent Banking?
Choose 3 answers.

Question31: Normal account-opening procedures reveal a customer who contacted a financial institution to open a bank account is the brother of a prominent member of a foreign judiciary. Which of the following actions should the anti-money laundering specialist recommend immediately?

Question32: 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.

Question33: A suspicious transaction report has been filed on an account owned by the wife of the bank's ChiefExecutive Officer. Which of the following is the most important consideration when deciding whether to recommend closing the account?

Question34: Which should authorities do to safeguard AML information exchanged with other countries?

Question35: A client opens a bank account for a multi-level marketing company. The debits and credits of the account are numerous and very involved. Further, there are a lot of international transactions. Also, funds are being tunneled from the company to the client's personal account in another jurisdiction.
Which two steps should law enforcement take in investigating this matter? (Choose two.)

Question36: A client has retained a lawyer to create a financial holding company. The lawyer resides in Europe. The client provides all requested documentation to the lawyer. However, the lawyer becomes suspicious that the customer is engaged in criminal activity and intends to use the financial holding company for money laundering purposes. Which of the following should an anti-money laundering specialist recommend according to the European Union Money Laundering Directives?

Question37: How can violations of anti-money laundering laws be a risk to individuals?

Question38: A prospective client walks into an accounting firm wanting to incorporate a company. The accountant feels uncomfortable after the meeting. Which two of the accountant's observations warrant escalation to the compliance officer? (Select Two.)

Question39: Why do governments and multi-national bodies impose economic sanctions?

Question40: A new business opened an account at a bank. After a month of activity, the account is referred to AML Investigations for potential human trafficking activity. Which red flags most likely triggered the referral?
(Select Two.)

Question41: 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?

Question42: An anti-money laundering specialist has just developed and implemented an anti-money laundering program.
Which of the following is the best resource to evaluate the effectiveness of the program?

Question43: A SAR/STR should be filed when the accountable institution identifies that:

Question44: Who bears the ultimate responsibility for approving a financial institution's relationship with a politically exposed person?

Question45: When a regulatory body requires international assistance in a money laundering inquiry, such assistance is typically obtained by

Question46: Which action should an FIU consider taking when it has information that might be useful to another FIU?

Question47: One key aspect of promoting an enterprise-wide compliance culture within a financial institution (FI) is that the:

Question48: Before providing suspicious activity report documentation to an authorized requestor, the institution should first:

Question49: What is the most effective criterion for determining the beneficial ownership of funds?

Question50: 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?

Question51: One of the red flags of microstructuring is:

Question52: Which information must a United States financial institution retain for having foreign correspondent accounts as part of the USA PATRIOT Act record keeping requirements?

Question53: What are two red flags that indicate possible money laundering or terrorist financing? (Choose two.)

Question54: Which does the USA PATRIOT Act stipulate for foreign banks concerning correspondent banking?

Question55: Money laundering can cause which consequences for a financial institution? (Select Two.)

Question56: Which of the following customer activities poses the highest risk of money laundering?

Question57: 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.)

Question58: Which statement is true regarding the FATF standards for SARs/STRs information sharing within a financial group?

Question59: Customers of a telecommunications firm received an email explaining an issue with their last order. The customers were directed to the company website via a link in the email to provide personal information. Both the email and website were fake. What type of cybercrime has been committed?

Question60: On who does the ultimate responsibility for an institution's anti-money laundering program rest?

Question61: Which two actions should Financial Intelligence Units (FIUs) take when submitting a request to another FIU?
(Choose two.)

Question62: 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?

Question63: Law enforcement is conducting an investigation of a financial institution (FI) and has submitted an overly broad and unduly intrusive request. Which is a Fl's most appropriate response?

Question64: A close relative of a privately-owned bank's senior manager requests to open an account. Because of this relationship, the staff expedites the opening of the account without following established account-opening procedures. Applying the Basel Committee on Banking Supervision principles, which of the following poses the highest operational risk?

Question65: 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?

Question66: Client A is flagged for a high volume of outgoing transfers. Further investigation reveals Client A has a potentially key role in a network linked to human trafficking. After filing a suspicious activity report, what step should the investigator take next?

Question67: A bank maintains a relationship with a customer who owns a small bakery business.
Which customer action indicates potential money laundering?

Question68: How does the Asian/Pacific Financial Action Task Force <FATF>-Style Regional Body help its members implement recommendations from the FATF? (Select Two.)

Question69: Which action indicates possible Penza scheme activity?

Question70: Which primary international authoritative body designates sanctions?

Question71: 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?

Question72: 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?

Question73: What kind of person should perform the independent testing of an institution's anti-money laundering program?

Question74: 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.)

Question75: 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?

Question76: 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?

Question77: A customer has borrowed the cash surrender value of their life insurance policies. Which requires a further investigation and filing of the suspicious activity report?

Question78: Which type of sanctions are most likely to be used in order to avoid escalating violent conflicts and/or proliferation of weapons?

Question79: Which red flag should a compliance officer prioritize first for investigation?

Question80: 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

Question81: 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?

Question82: Which activity would require an update to the first line training program?

Question83: 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.)

Question84: 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?

Question85: Which of the following provides anti-money laundering specialists information related to money laundering trends?
1. Egmont Group's 100 Cases
2. Financial Action Task Force Typologies
3. FinCEN's SAR Activity Review
4. The Wolfsberg Principles

Question86: What poses the greatest money laundering risk for a financial institution offering on-line services to customers?

Question87: When performing a risk assessment, which factors should be considered when identifying and measuring risk?
(Choose two.)

Question88: A customer has borrowed the cash surrender value of their life insurance policies. Which requires a further investigation and filing of the suspicious activity report?

Question89: 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?

Question90: An anti-money laundering specialist has just developed and implemented an anti-money laundering program.
What is the most effective resource to evaluate the effectiveness of the program?

Question91: The Office of Foreign Assets Control requirements have an extraterritorial reach because compliance is required by:

Question92: When an institution receives a document request from law enforcement with regard to an STR that the institution has filed, what should institution do?

Question93: Which situation would require enhanced due diligence be performed on a customer?

Question94: Which of the following activities conducted at a financial institution is the strongest example of avoiding reporting thresholds?

Question95: 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?

Question96: Which two steps should a financial institution take when it receives a law enforcement request to keep an account open that may be associated with suspicious or criminal activity? (Choose two.)

Question97: A customer has borrowed the cash surrender value of their life insurance policies. Which requires a further investigation and filing of the suspicious activity report?

Question98: In addition to monitoring for suspicious activity, what are electronic monitoring systems also valuable for?

Question99: 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?

Question100: A U.K. real estate agent has three foreign clients interested in purchasing an apartment building, valued at £30 million, in the outskirts of London as an investment property. The clients are not willing to have their names provided to the bank. The clients want to purchase to be made in the names of three private companies for privacy reasons. The plan is to wire the funds into an account held in the name of another private company at a bank in London.
Which red flag should stop the agent from discussing this potential purchase further?

Question101:

Question102: To what extent should senior management and the Board of Directors be involved in the filing of any STR?

Question103: A bank has maintained an account for a European charity for several years. The charity provides clothing to persons in need in various countries with active terrorists' cells.
Which action by the charity indicates possible terrorist financing?

Question104: Which transaction should result in a suspicious activity report filing?

Question105: A new accounts representative recently opened an account for individual whose stated employment is tutoring students.
Which customer action indicates possible money laundering?

Question106: A compliance officer of a financial institution is reviewing a payment for sanctions compliance between two parties in Europe and Asia. The payment is in Euros and involves the provision of services to a company located in a jurisdiction subject to Office of Foreign Assets Control secondary sanctions. Which factor is most important in determining the compliance officer's response?

Question107: A compliance officer at a financial institution (FI) received an investigation request for a customer from a local law enforcement agency. Which action should be taken by the FI?

Question108: 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?

Question109: An anti-money laundering specialist at a large institution is responsible for information senior management about the status of the anti-money laundering program across the organization.
Which report is the most useful?

Question110: Which elements can trigger a review of the existing relationship during the opening of a new account? (Select Two.)

Question111: According to the Financial Action Task Force, financial institutions should exit the relationship with a client in which case?

Question112: What action does the USA PATRIOT Act allow the US government to take regarding financial institutions (Fls) that are based outside of the US?

Question113: Which response represents a high-level principle for FATF-Style Regional Bodies (FSRB)?

Question114: Based on the AML principles outlined by the Wolfsberg Group, what do private and correspondent banks have in common when monitoring for terrorist financing?

Question115: A US casino customer has won 55,518 USD. The customer goes to the casino cashier cage to execute some transactions. Which ^transactions are an indicator of money laundering? (Select Two.)

Question116: An individual opened an account with a minimal cash deposit at a financial institution. He presented a foreign passport and stated he would be working locally for a few months. He also requested information about making electronic fund transfers. The institution was subsequently unable to verify the employment or residence information provided by the individual. Soon after this, a large transfer was sent to the customer's account. Which of the following is the course of action recommended by the Basel Committee on Banking Supervision's Customer Due Diligence for Banks?

Question117: A bank receives an anonymous tip from an employee about another employee through its confidential hotline.
Which activity warrants further review?

Question118: What is the primary action a financial institution should take before formulating its anti-money laundering program?

Question119: A typical red flag regarding potential money laundering in connection with an art purchase occurs when a customer:

Question120: Which factors should lead to a reassessment of the current AML program? (Select Two.)

Question121: A customer has borrowed the cash surrender value of their life insurance policies. Which requires a further investigation and filing of the suspicious activity report?

Question122: Which two factors assist a money laundering investigation that involves multiple countries? (Choose two.)

Question123: 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?

Question124: 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?

Question125: Based on the USA PATRIOT Act, what action might the US take to demonstrate extraterritorial reach?

Question126: Which is an emerging risk associated with cyber-enabled fraud?

Question127: Which action should a financial institution take when it receives a grand-jury subpoena regarding a customer?

Question128: The branch manager calls the compliance officer and informs her that a law enforcement officer has just left the branch and was asking a lot of questions and left a business card.
What should the compliance officer do?

Question129: Which assessments are involved in the processes of mutual evaluation and follow-up by the FATF?

Question130: A quarterly review is conducted on a retail customers account at a bank located in a jurisdiction with currency reporting thresholds. A number of large deposits of financial instruments drawn on other institutions in amounts under thresholds were noted. This activity did not fit the accounts historical profile. A suspicious transaction report will most likely be filed if what also occurred?

Question131: A financial institution recently purchased anti-money laundering software. The software routinely generates more alerts than the anti-money laundering staff can properly analyze as a result of limited staffing. These alerts are generated by default software rules. Which of the following should the individual responsible for setting the anti-money laundering software parameters recommend?

Question132: What action does the USA PATRIOT Act allow the US government to take regarding financial institutions (FIs) that are based outside of the US?

Question133: A UK national has accounts with a bank in Belgium, who maintains a branch in New York. The UK national has been recently added and screened against the Office of Foreign Assets Control (OFAC) Specially Designated Nationals and Blocked Persons List. Which action should the Belgian bank take?

Question134: Which methods are typically used to launder money using insurance companies? (Choose two.)

Question135: What are three potential issues for foreign financial institutions maintaining correspondent accounts with U.S.
banks under the Patriot Act? Choose 3 answers

Question136: Why should a financial institution (Fl) require an update of its AML risk assessment?

Question137: The findings of an internal audit discover that a large group of employees do not know how to handle Politically Exposed Persons (PEPs). Which is the next course of action that should be taken?

Question138: A high volume of incoming wire transfers generates an alert about a client. The funds are immediately debited by cash withdrawals and outgoing wire transfers. Which information should be reviewed first to investigate this alert/case?

Question139: Which three stages of money laundering are on-line banking vulnerable to?

Question140: A client opens a bank account for a multi-level marketing company. The debits and credits of the account are numerous and very involved. Further, there are a lot of international transactions. Also, funds are being tunneled from the company to the client's personal account in another jurisdiction.
Which two steps should law enforcement take in investigating this matter? (Choose two.)

Question141: A compliance analyst has recently investigated an account where money was deposited in amounts below the reporting limit and almost entirely withdrawn in a foreign country. Which type of money laundering is the compliance analyst potentially identifying?

Question142: Which three statements are true about on-line banking offering a significant money laundering risk to a financial institution?

Question143: Which of the following is considered a shell bank as defined by the USA PATRIOT Act?

Question144: Which factor should a financial institution (FI) consider prior to sharing customer records within the same jurisdiction?

Question145: A profitable commercial customer who operates an import-export business has multiple accounts with the same institution at branches m different locations. The customer receives funds from a jurisdiction perceived as highly corrupt according to Transparency International ratings. The customer makes frequent transfers among the accounts and prefers to manage the accounts separately. What should the institution do to mitigate the risk associated with these accounts?

Question146: Which trading pattern may be indicative of money laundering in capital markets?

Question147: 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.)

Question148: Which principle about safeguarding privacy and data should an auditor adhere to when performing an AML investigation?

Question149: 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?

Question150: Which activity is most likely to facilitate money laundering through on-line banking systems with inadequate controls?

Question151: 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.

Question152: Which is a valid extraterritorial effect of the USA PATRIOT Act?

Question153: Which insurance product is particularly vulnerable to money laundering?

Question154: A foreign bank operating under an offshore license wants to open a correspondent account with a United States (U.S.) bank. The foreign bank plans to provide payable through account services to some of its customers.
What must the foreign bank provide to the U.S. bank under the USA PATRIOT Act?

Question155: 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?

Question156: Which method do terrorist financiers use to move funds without leaving an audit trail?

Question157: How does the Financial Acton Task Force (FATF) communicate its findings regarding jurisdictions with strategic anti-money laundering / Counter Financing of Terrorism deficiencies?

Question158: In which two ways does a government Financial Intelligence Unit interact with public and private sectors?
(Choose two.)

Question159: A client opens a bank account for a multi-level marketing company. The debits and credits of the account are numerous and very involved. Further, there are a lot of international transactions. Also, funds are being tunneled from the company to the client's personal account in another jurisdiction.
Which two steps should law enforcement take in investigating this matter? (Choose two.)

Question160: According to the Financial Action Task Force, financial institutions should be required to implement:

Question161: Which transaction monitoring processes would alert a bank for red flag activity?

Question162: 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?

Question163: What does the Egmont Group's support for its members include?

Question164: Private investment companies are potentially vulnerable to money laundering because:

Question165: Which type of sanctions are most likely to be used in order to avoid escalating violent conflicts and/or proliferation of weapons?

Question166: 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.)

Question167: Which type of sanctions are most likely to be used in order to avoid escalating violent conflicts and/or proliferation of weapons?

Question168: A client who owns a swimming pool company requests to open 19 accounts at a bank, each with a debit card for its swimming pool technicians. When asked about the purpose of each account, the client explains that each technician needs a separate checking account to purchase pool chemicals.
Which available source could be used in the bank's internal investigation on this client's activities?

Question169: Which is a FATF characteristic used to assess a country's effectiveness of its AML regime?

Question170: Under which two circumstances may law enforcement be given access to a financial institution customer's financial records? (Choose two.)

Question171: A bank teller receives a written request from a police officer to review a previous customer's account on a pre-populated form with the officer's official letterhead. The officer suspects the previous customer is engaging in smurfing. Which action should the bank teller perform?

Question172: When an institution files an STR with regard to a particular account, what steps should the institution take visa account?

Question173: Which method to finance terrorism involves falsifying transaction-related documents?

Question174: When a financial institution is requested to provide data and information to a law enforcement agency for matters related to financing of terrorism, assistance:

Question175: 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?

Question176: What do the Financial Action Task Force (FATF) mutual evaluations of each member assess?

Question177: Which payment method for purchasing luxury items is a red flag for potential money laundering?

Question178: A bank provides trade financing for a company whose primary export is steel.
Which action by the company indicates possible money laundering?

Question179: Which of the following is among the Financial Action Task Force criteria defining non-cooperative countries and territories?

Question180: In its paper. Customer Due Diligence for Banks, the Basel Committee on Banking Supervision identified which risks on banking institutions as a result of an inadequate KYC program?

Question181: What indicates potential money laundering activity by a lawyer?

Question182: A compliance officer provides an overview of the bank's anti-money laundering program to a group of new tellers during employee orientation.
Which training element should be delivered to this audience?

Question183: A bank maintains a number of United States (U.S.) dollar correspondent accounts for foreign financial institutions. Upon a routine review of a U.S. dollar correspondent account owned by Foreign Bank A, a number of transactions appear to have been originated by Foreign Bank B outside the expected activity for this account. These transactions appear suspicious and a suspicious transaction report was filed by the compliance officer.
Which step should the compliance officer take?

Question184: 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?

Question185: An individual opens an e-account in an off-shore gambling website using non-documentary verification and creates an e-wallet on a mobile device. In order to add funds to the account, the individual uses a credit card, wire transfers, cryptocurrency, and a money service business. Which source of money represents more risk of money laundering?

Question186: A company contracts a life insurance policy with a savings feature of 100,000 USD for an individual in a high-risk country. The policy receives monthly cash deposits from unknown third parties. A minimal part of the deposit is invested and the rest is withdrawn by the end of the month. Which are the circumstances to consider as a risk for money laundering? (Select Two.)

Question187: Which principles of the Egmont Group of Financial Intelligence Units (Fills) are aimed at maximizing cooperation between FlUs to more effectively combat money laundering? (Select Two.)

Question188: The compliance officer for a bank is reviewing on-boarding documents for a new business account for a domestic corporation. The officer is unable to verify the identity of the beneficial owners of the company.
Only
information on the nominee owners was provided, and none of the listed addresses are local. The purpose of the business and future expected activity were disclosed to include cash letters, money orders and international remittance transfers.
Which red flag identifies a heightened money laundering risk?

Question189: 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?

Question190: What should an effective anti-money laundering training program include?

Question191: 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?

Question192: Which is a key aspect of the first EU Directive on Money Laundering?

Question193: A country that does not have strong predicate offenses and is lax in prosecuting AML cases could suffer which social/economic consequence?

Question194: What core objective does the Egmont Group suggest would lead to an effective national Financial Intelligence Unit (FIU)?

Question195: 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.

Question196: 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.

Question197: 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?

Question198: 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?

Question199: 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

Question200: An AML training program should include which requirement?

Question201: A bank operates in multiple countries and offers a variety of products and services. The compliance officer recently joined the bank and wants to better understand the inherent level of anti-money laundering risk across the entire organization.
Which two factors should be considered? (Choose two.)

Question202: The regulators of a US financial institution find that the institution has failed to establish and maintain a reasonably designed AML program. Which regulatory actions should be taken? (Select Two.)

Question203: 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.)

Question204: What does the Egmont Group's support for its members include?

Question205: 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?

Question206: 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?

Question207: Which action does the Financial Action Task Force call on member countries to take in the most serious cases when countries have significant strategic AML deficiencies?

Question208: 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?

Question209: Who meets the standard to perform the AML audit? (Select Two.)

Question210: Which statement about a multinational institution's ability to fully investigate unusual activity in all its foreign operations is correct?

Question211: What does the Financial Action Task Force 40 Recommendations address on transparency of beneficial ownership?

Question212: Which two statements are true regarding the European Union Money Laundering Directives? (Choose two.)

Question213: Which principles should be included in a FATF-Style Regional Body (FSRB) update? (Choose two.)

Question214: The training department is conducting awareness training for unusual customer identification scenarios. Which two indicators should be included? (Select Two.)

Question215: When an institution files an STR with regard to a particular account, what steps should the institution take visa account?

Question216: Which principles should be included in a FATF-Style Regional Body (FSRB) update? (Choose two.)

Question217: The most effective tool used to detect structured transactions is

Question218: According to the Financial Action Task Force 40 Recommendations, Designated Non-Financial Businesses and Professionals include which entities?

Question219: Which of the following facilitates law enforcement agents obtaining evidence from authorities in a foreign country relating to criminal activity?

Question220: What action should a bank CEO's assistant take when the bank CEO expenses large sums of money to a charitable organization run by the bank CEO's direct family member?

Question221: What is a tool governments and multi-national bodies can use to prevent the proliferation of weapons of mass destruction?

Question222: Since its last regulatory examination, a financial institution has aggressively grown by adding profitable new products and services. The institution has not historically received regulatory criticism regarding its anti-money laundering compliance program. However, a recent regulatory examination cited significant deficiencies in the anti-money laundering program that were attributed primarily to the lack of oversight by the institution's leadership in implementing adequate controls over the new products and services.
Which area of international control should leadership first address to correct the weaknesses in the program?

Question223: 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?

Question224: A non-US bank is implementing a sanctions compliance program. Which extraterritorial reach of Office of Foreign Assets Control (OFAC) regulations would matter the most to the foreign bank?

Question225: A non-U.S. bank wants to open an account at Bank A, which is a U.S.-based bank.
Which information must Bank A obtain under the USA PATRIOT Act?

Question226: With which person(s) should an anti-money laundering officer coordinate when implementing a new hire screening program?

Question227: A precious metals dealer opens a new account with a bank. Which requires a referral to AML Investigations for further review?

Question228: According to the Second European Union Money Laundering Directive, what may knowledge of criminal conduct be inferred from?

Question229: An internal review of anti-money laundering training documentation revealed only new agents employed by a financial institution that sells life insurance products were trained. Additionally, it typically took the institution
8 months to begin training for new actuaries. The compliance officer explained training was limited to actuaries because they perform the only high-risk function. The institution relied on e-learning techniques without follow-up assessment.
Which of the following issues would the internal review most likely recommend?

Question230: 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.)

Question231: A money transmitter's nation-wide agent network remits funds to a country in Africa on behalf of an immigrant community based in the United States. A terrorist group is known to operate openly in this African country. In reviewing transaction records, the compliance officer detects a pattern where two customers together visit the same agent each week and remit the same amount of funds, $2,500, to the same recipient in the country in Africa.
What should alert the compliance officer to possible money laundering or terrorist financing activity by the two customers?

Question232: 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?

Question233: A compliance officer at a small local bank reads in the newspaper that a high ranking local public official, who is a long-standing account holder, is being investigated by the competent authorities for accepting bribes from a well-known construction company with offices in the town. The compliance officer immediately checks the official's account and other recently opened accounts at the bank. The official opened a new account at the bank a few weeks ago. The compliance officer's investigation of these accounts discloses that the official's longstanding account had no unusual activity and the recently opened account had no activity since it was opened. Which of the following should the compliance officer do next?

Question234: Once a financial institution has reported suspicious transactions on a valued customer, it should cooperate with competent authorities by

Question235: According to the European Union Money Laundering Directives, "knowledge, intent or purpose"' required as an element for money laundering may be inferred from

Question236: Which requirement is included in the Fourth European Union Directive on money laundering?

Question237: 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.

Question238: 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

Question239: How does the Financial Action Task Force (FATF) measure the effectiveness of a country's efforts to combat money laundering and terrorist financing?

Question240: After a FATF mutual evaluation process, which are resulting actions for jurisdictions that are determined to have strategic deficiencies in their regimes to counter money laundering, terrorist financing, and proliferation financing? (Choose two.)

Question241: What are the European Union Directives on Money Laundering?

Question242: Which red flags should be considered prior to establishing a relationship with a third party? (Select Two.)

Question243: When a bank performs a risk assessment, what areas should an institution focus on?

Question244: What is an aspect of the USA PATRIOT Act that has extraterritorial reach?

Question245: Which is true about Financial Action Task Force (FATF)-Style Regional Bodies (FSRBs)?

Question246: A compliance analyst is reviewing recent activity between a publicly traded company and a company in a high risk jurisdiction. Which detail suggests that escalation is warranted?

Question247: According to experts, what is the most effective way to prevent money laundering through financial institutions?

Question248: Which should be provided to the board of directors or designated specialized committee when preparing suspicious activity reports (SARs)?

Question249: What are four key elements that a KYC program should contain according to the Basel Committee requirements?

Question250: 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.)

Question251: According to the Basel Committee on Banking Supervision, banks should deal with high-risk customers by:

Question252: A customer comes into the bank and appears to be ill-at-ease waiting in the teller line. When the customer gets to the teller, he become exceedingly nervous and asks for a large cashier's check to be cashed and disbursed to him in $100 bills.
What should the teller do after completing the transaction?

Question253: 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?

Question254: 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?