EMT Practice Test

1. Question Content...

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Question1: What is the primary action a financial institution should take before formulating its anti-money laundering program?

Question2: In which two ways does a government Financial Intelligence Unit interact with public and private sectors?
(Choose two.)

Question3: Which transaction should result in a suspicious activity report filing?

Question4: Which are the two most common controls a financial institution (FI) uses to identify suspicious money-laundering activity? (Choose two.)

Question5: 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 A minimal part of the deposit is invested and the rest is withdrawn by the end of the month.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.)

Question6: 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?

Question7: How does the Financial Acton Task Force (FATF) communicate its findings regarding jurisdictions with strategic anti-money laundering / Counter Financing of Terrorism deficiencies?

Question8: A bank maintains a relationship with a customer who owns a small bakery business.
Which customer action indicates potential money laundering?

Question9: Which action does the Financial Action Task Force (FATF) recommend be taken against jurisdictions that have strategic deficiencies?

Question10: Financial Action Task Force (FATF)-style regional bodies are created and obliged to understand the inherent money laundering and terrorist financing risks in the region of the world they serve.
What is one of the methods they use to understand these risks?

Question11: A customer puts high-denomination cash notes into a poker machine at a casino. Without placing any bets, the customer collected winnings in the form of a check from the casino.
Which money laundering threats could result from the customer's activities?

Question12: An anti-money laundering expert is hired by a new Internet bank to assess the money laundering threat to the bank. Because it is an o line bank the most important recommendation for the expert to make is that the bank

Question13: Which of the following competent authorities should directly receive suspicious or unusual transaction reports?

Question14: When an institution receives a document request from law enforcement with regard to an STR that the institution has filed, what should institution do?

Question15: When an existing customer becomes a politically exposed person (PEP), what should the KYC analyst do during the review/refresh period?

Question16: 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?

Question17: Which is a valid extraterritorial effect of the USA PATRIOT Act?

Question18: 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.

Question19: 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?
1. Monthly statements and transaction activities for that individual since 2004.
2. All wire transfers for that individual since 2004.
3.Signature cards from accounts opened by that individual since 2004.
4. All security trading activities for that individual since 2004.

Question20: Which three measures are contained in Financial Action Task Force 40 Recommendations for reporting suspicious activity? (Choose three.)

Question21: According to the European Union Money Laundering Directives, "knowledge, intent or purpose"' required as an element for money laundering may be inferred from

Question22: Which activity associated with new or developing technologies does the Financial Action Task Force recommend financial institutions pay special attention to?

Question23: 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?

Question24: 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.)

Question25: 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?

Question26: 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.)

Question27: 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?

Question28: Which of the following represents the first Financial Action Task Force initiative?

Question29: How can a financial institution verify the nature and purpose of a business and its legitimacy?

Question30: Why should a financial institution (Fl) require an update of its AML risk assessment?

Question31: 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.

Question32: Which insurance product is particularly vulnerable to money laundering?

Question33: An audit completed the previous week revealed that a private banking customer submitted incomplete documents when establishing an account earlier in 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. Which of the following should the anti-money laundering officer do first?

Question34: The owner of a real estate investment company deposits multiple cashier's checks that were bought using cash over a three-month period, from the sale of two apartments. This account also receives several electronic transfers from other financial institutions for 10.000 USD each. What activity is considered suspicious of money laundering?

Question35: Which two individuals are ordinarily beneficial owners of a private banking account according to the Wolfsberg Anti-Money Laundering Principles for Private Banking? (Choose two.)

Question36: 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?

Question37: Which action should financial institutions with cross border correspondent banking activity be required to perform according to the Financial Action Task Force 40 Recommendations?

Question38: According to the Basel Committee's principles on customer due diligence, a bank should:

Question39: A bank received a subpoena regarding one of its clients. The financial intelligence unit of the bank should review the subpoena and:

Question40: Which methods are typically used to launder money using insurance companies? (Choose two.)

Question41: Which elements can trigger a review of the existing relationship during the opening of a new account? (Select Two.)

Question42: What kind of person should perform the independent testing of an institution's anti-money laundering program?

Question43: Which three are the most commonly used risk criteria?

Question44: Which of the following facilitates law enforcement agents obtaining evidence from authorities in a foreign country relating to criminal activity?

Question45: Which activities conducted by a lawyer could be a red flag for money laundering? (Select Two.)

Question46: Which is the main objective when a financial institution (FI) conducts an investigation?

Question47: What are the European Union Directives on Money Laundering?

Question48: Which are key objectives of the Egmont Group? (Select Two.)

Question49: Which two methods have terrorist groups used to diversify their revenue stream and to fund their operations?
(Choose two.)

Question50: Which is the first valid step in the Mutual Legal Assistance Treaties (MLAT) international cooperation process?

Question51: An accounting firm opened an account at a bank that is intended to be used as the operational account for the business. After a few months, a comprehensive review of the account was triggered due to unusual activity on the account. Which most likely triggered the review?

Question52: 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?

Question53: How does the Financial Action Task Force (FATF) measure the effectiveness of a country's efforts to combat money laundering and terrorist financing?

Question54: 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?

Question55: Release of the EU's Fourth AML Directive resulted in what change to member state*s procedures? (Select Two.)

Question56: What are two reasons physical certificates present a money laundering risk to broker-dealers? (Choose two.)

Question57: In performing a risk analysis, which factor(s) should a financial institution review?

Question58: A bank compliance officer has implemented enhanced monitoring rules that have identified some unusual activity that may be indicative of human trafficking.
Which red flag should prompt additional transactional review?

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: 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?

Question61: 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?

Question62: What should a financial institution (FI) do in response to a formal law enforcement request to produce documents?

Question63: 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?

Question64: A financial institution (FI) has decided to revamp its compliance program to be more risk-based. Which option should the FI use as part of the new risk-based compliance program?

Question65: Which is a purpose of imposing sanctions?

Question66: 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?

Question67: 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?

Question68: 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?

Question69: To ensure that an institution's anti-money laundering program is current, which step should be taken?

Question70: 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?

Question71: Which scenario best justifies why a customer's account might be closed by a financial institution?

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

Question73: A professional dealer in precious metals and stones in an EU country plans to implement measures to reduce the risk of being misused for money laundering purposes. Which measures are most relevant for achieving this goal? (Select Two.)

Question74: Which payment method for purchasing luxury items is a red flag for potential money laundering?

Question75: Which response represents a high-level principle for FATF-Style Regional Bodies (FSRB)?

Question76: What are three elements of a sound Customer Due Diligence Program?

Question77: 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?

Question78: 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?

Question79: 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?

Question80: 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?

Question81: 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?

Question82: A long-term client of an insurance company makes changes to a policy that require payment of an additional lump sum. The amount payable is high, though within the client's means based on the KYC information collected. The payment is made via a company in another jurisdiction that is known to have lax AML controls.
Which indicator of suspicious activity is present?

Question83: 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?

Question84: 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?

Question85: Which are the requirements of the Filth AML Directive of the EU? {Select Two.)

Question86: On who does the ultimate responsibility for an institution's anti-money laundering program rest?

Question87: Which practices are dealers in antiques, precious metals, precious stones, jewelry, and art advised to follow to reduce the element of money laundering risk? Choose 3 answers

Question88: One key aspect of promoting an enterprise-wide compliance culture within a financial institution (FI) is that the:

Question89: Which method to launder money through deposit-taking institutions is closely associated with international trade?

Question90: A precious metals dealer opens a new account with a bank. Which requires a referral to AML Investigations for further review?

Question91: 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?

Question92: A law enforcement agent is conducting an investigation into a possible money laundering event. During the investigation, the officer will use:

Question93: What core objective does the Egmont Group suggest would lead to an effective national Financial Intelligence Unit (FIU)?

Question94: What action does the USA PATRIOT Act allow the US government to take regarding financial institutions (FIs) that are based outside of the US?

Question95: Pursuant to the Third European Union Money Laundering Directive, how long after being out of prominent office should a person NOT be considered to be a Politically Exposed Person (PEP)?

Question96: Which situation is the highest risk for money laundering and terrorist financing activity?

Question97: Which three conduits for moving terrorist-related funds do terrorist financing generally favor? Choose 3 answers

Question98: 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?

Question99: A key element required to ensure an anti-money laundering compliance program is effectively embedded into an institution's culture is

Question100: Which safeguard is in place for Financial Intelligence Units (FIUs) to share information securely according to Egmont?

Question101: A local law enforcement officer, who is conducting a criminal investigation, requests information about a customer.
Which two actions should the bank take? (Choose two.)

Question102: Which statements relate to the mandate, roles, and responsibilities of the Financial Action Task Force (FATF) and the FATF-Style Regional Bodies (FSRBs)? (Select Two).

Question103: Which action indicates possible Penza scheme activity?

Question104: When deficiencies are identified in the Financial Action Task Force (FATF) mutual evaluation report, the assessed country needs to:

Question105: The Chief Compliance Officer (CCO) of a financial institution has been asked by a manufacturing customer reliant upon imported raw materials if there will be repercussions to his business following the weak assessment of the recent publicly issued Financial Action Task Force (FATF) Mutual Evaluation Report (MER). How should the CCO respond?

Question106: 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

Question107: A commission rogatory would be used in which gateway to obtain information from another country?

Question108: 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?

Question109: A compliance officer is looking to update an institutions private bank procedures. What should be included as recommended by the Wolfsberg AML Principles on Private Banking?

Question110: A new AML Officer for a US-based money service business (MSB) is drafting procedures around types of activity that require further review. Which should be included? (Choose two.)

Question111: A charity has unaudited accounts. Which of the following represents the highest risk factor for terrorist financing?

Question112: A law enforcement agency is conducting an investigation of a financial institution (Fl). How should the Fl respond to the law enforcement agency's requests?

Question113: A large financial institution (Fl) is considering expanding business to an area of the world with weak AML laws. The risk-based assessment indicates that the location will increase the Fl's risk appetite beyond the stated acceptable amount. Which risk factors should be used to identify the priority of the Fl?

Question114: 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?

Question115: Which three stages of money laundering are on-line banking vulnerable to?

Question116: Which activity is most likely to facilitate money laundering through on-line banking systems with inadequate controls?

Question117: Which regulatory bodies cooperate when dealing with cross-border suspicious or unusual financial activity investigations?

Question118: The board of directors receives notice from the primary regulator of the bank that potentially suspicious activity has been identified and the bank president appears to be involved. The Board asks the compliance officer for advice.
Which action should the compliance officer take when informed?

Question119: A bank receives a request for a subpoena (or a client who has been the subject of monitoring for several months. The bank wishes to close the account in order to mitigate any additional risk. However, the government requires that the account remain open. What document must be provided to the bank to keep the account open?

Question120: AML training programs should extend beyond basic concepts to deliver targeted training by:

Question121: Which three areas do FATF's 40 recommendations cover? Choose 3 answers

Question122: What are three indicators of money laundering associated with using electronic funds transfers? Choose 3 answers

Question123: 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?

Question124: 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?

Question125: 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?

Question126: What should an employee do after witnessing suspicious activity from a coworker?

Question127: When a financial institution is requested to provide data and information to a law enforcement agency for matters related to financing of terrorism, assistance:

Question128: What is a tool governments and multi-national bodies can use to prevent the proliferation of weapons of mass destruction?

Question129: Which transaction should result in a SAR/STR filing?

Question130: A law enforcement agency submits several requests to a financial institution. Which request is legitimate and requires the bank to respond?

Question131: Which factors should lead to a reassessment of the current AML program? (Select Two.)

Question132: Who has the day-to-day responsibility of communicating and reinforcing the established anti-money laundering compliance culture and program?

Question133: An anti-money laundering specialist is employed by a large multi-national bank. The bank is planning to open an international department that will be responsible for expanding services to various countries. The head of the new international department has asked the specialist to assess risks associated with the bank's expansion plans. Which of the following materials should be included as a reference?
1. USA PATRIOT Act
2. Financial Action Task Force 40 Recommendations
3. Customer Due Diligence for Banks issued by the Basel Committee on Banking Supervision
4. The Egmont Group Statement of Purpose

Question134: Which is a goal of Financial Action Task Force Regional-Style Bodies?

Question135: How should a financial institution deter money laundering through new accounts? Choose 3 answers

Question136: Which of the following are the most suspicious transaction indicators related to casino activities?
1. A client requests a winnings check (cheque) in a third party's name.
2. Acquaintances bet against each other in even-money games and it appears they are intentionally losing to one of the parties.
3. A new client who is a large volume player asks the casino operator about the ability to transfer the funds to other locations in the same country.
4. A client requests the transfer of winnings to the bank account of a third party in a country without an effective anti-money laundering regime.

Question137: Which of the following is the main reason Internet gambling is an ideal web-based money laundering method?

Question138: Which event occurs most frequently in money laundering in the insurance industry?

Question139: Which situation would require enhanced due diligence be performed on a customer?

Question140: Which are essential elements of a KYC program identified by the Basel Committee on Banking Supervision?
(Select Two.)

Question141: What are the three basic functions of a national financial intelligence unit?

Question142: 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?

Question143: 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?

Question144: 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?

Question145: 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?

Question146: In May 2002, the Wolfsberg Principles on Private Banking were revised and included a section that prohibits the use of internal non-client accounts in a manner that would prevent officials from appropriate monitoring movements of funds or keep clients from being linked to the movement of funds on their behalf.
What is another name for these internal, non-client accounts?

Question147: 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?

Question148: Which private banking situation requires due diligence actions to be implemented according to the AML principles of the Wolfsberg group?

Question149: 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.)

Question150: A company service provider in Country A sets up a corporate structure for a client from Country B, which is known for corruption. The corporate structure includes a holding company in Country A with a bank account in one of the international banks located there.
During on-boarding, the client's wealth was estimated at $7 million. Shortly thereafter, the client's father became president of Country B. During a routine client review two years later, it was identified that client's wealth had grown to $510 million.
What are two red flags that indicate money laundering or financial terrorism? (Choose two.)

Question151: 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?

Question152: 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?

Question153: 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?

Question154: 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?

Question155: 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?

Question156: 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?

Question157: 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.)

Question158: 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?

Question159: The compliance officer at a crowd funding website is in charge of monitoring new crowd funding projects.
Recently, the number of crowd funding projects has significantly increased.
Which red flag indicates the highest anti-money laundering risk?

Question160: 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?

Question161: 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?

Question162: One key aspect of the Office of Foreign Assets Control's extraterritorial reach includes the blocking of certain non-United States initiated transactions for or through the United States (U.S.) for benefit of a restricted person or entity.
Under which three circumstances are U.S. banks required to block transactions? (Choose three.)

Question163: What should an effective anti-money laundering training program include?

Question164: 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 letter head. The officer suspects the previous customer is engaging in smurfing. Which action should the bank teller perform?

Question165: 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?

Question166: During an ongoing investigation into a client's activities by a competent authority, a compliance officer should

Question167: 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.)

Question168: Which of the following is the most likely reason for the Financial Action Task Force to remove a jurisdiction from the Non-Cooperative Countries and Territories list?

Question169: 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.

Question170: 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?

Question171: Which are primary purposes of Financial Action Task Force {FATF)-Style Regional Bodies? (Select Two.)

Question172: 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?

Question173: Which should authorities do to safeguard AML information exchanged with other countries?

Question174: In establishing procedures for the review of suspicious transactions and filling of STRs, what thing should an institution focus on?

Question175: A compliance officer for a casino may suspect money laundering if an individual:

Question176: An AML specialist at a financial institution is presented with a search warrant. Which actions should be taken to comply with the search? (Select Two.)

Question177: What should countries do to help prevent non-profit organizations from being abused for the financing of terrorism according to the Financial Action Task Force 40 Recommendations?

Question178: Which method to finance terrorism involves falsifying transaction-related documents?

Question179: Which of the following employee behaviors would not trigger an AML red flag?

Question180: According to the Financial Action Task Force methodology, which situations would require a financial institution (FI) to consider filing a suspicious activity report?

Question181: Money laundering can cause which consequences for a financial institution? (Select Two.)

Question182: Which statement identifies one of the duties of a government Financial Intelligence Unit?

Question183: A retail bank prepares a yearly AML risk assessment. Which inherent risk factor is likely the most relevant?

Question184: What is a key risk associated with Correspondent Accounts according to the Basel Customer Due Diligence paper?

Question185: 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?

Question186: 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?

Question187: To what extent should senior management and the Board of Directors be involved in the filing of any STR?

Question188: Who has the ultimate responsibility within a bank for ensuring that the bank has a comprehensive and effective Bank Secrecy Act / anti-money laundering (BSA/AML) program and oversight framework that is reasonably designed to ensure compliance with applicable regulations?

Question189: The Egmont Group is a world wide organization of

Question190: Which is an extraterritorial function of Office of Foreign Assets Control sanctions?

Question191: 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.)

Question192: 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?

Question193: Which aspect of the USA PATRIOT Act impacts foreign financial institutions?

Question194: 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.)

Question195: The Board of Directors for a small private bank has asked the management to no longer apply the identity requirements for high net worth individuals to protect their privacy. Which of the following Financial Action Task =once 40 Recommendations should cause an anti-money laundering specialist the most concern?

Question196: What was the topic the Wolfsberg Group's first guidance addressed?

Question197: Which statement is true about when an institute becomes aware that a particular employee is under investigation by law enforcement as a result of a subpoena or warrant?

Question198: On discovering employees had unintentionally provided assistance to customers who were structuring transactions, an anti-money laundering specialist should recommend

Question199: 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?

Question200: Based on the AML principles outlined by the Wolfsberg Group, what do private and correspondent banks have in common when monitoring for terrorist financing?

Question201: A financial institution accepts new on-line customers. After customers have provided acceptable identification, the institution should next

Question202: When performing an investigation, which key steps should be taken to maintain and secure supporting documentation used to perform an investigation of a suspicious activity?

Question203: A financial institution opens a mortgage loan for a customer. During a subsequent internal review of the loan, it was noted that the appraisal used to support the loan was performed by an appraiser who was not on the institution's approved appraiser list. This exception was approved by the senior loan underwriter. The reviewer, who had examined other loans from the same general area, noted that the value on the loan appeared significantly higher than on other comparable properties. Which of the following should the anti-money laundering specialist recommend next?

Question204: 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.)

Question205: What is the currency threshold under the European Union Fourth Anti-Money Laundering Directive?

Question206: A benefit of using bearer shares in corporate formations is that bearer shares are:

Question207: Which element is generally required of all anti-money laundering programs?

Question208: What are two aspects of the Wolfsberg Anti-Money Laundering (AML) Principles for Correspondent Banking? (Choose two.)

Question209: According to the Financial Action Task Force, financial institutions should exit the relationship with a client in which case?

Question210: A financial institution's (Fl's) policy is to apply enhanced due diligence (EDD) for every new client to ensure the effectiveness of the program. How should a consultant advise the Fl's management team?

Question211: 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?

Question212: The most important anti-money laundering issue associated with on-line banking is accurately

Question213: A Trust and Company Service Provider (TCSP) providing services should have policies and procedures in place to identify critical information of the:

Question214: A new accounts representative recently opened an account for individual whose stated employment is tutoring students.
Which customer action indicates possible money laundering?

Question215: A compliance officer is reviewing transactions related to a company suspected of being involved in wildlife trafficking. Which of activities below are common in wildlife trafficking schemes? (Select Two.)

Question216: What are two sources for maintaining up-to-date sanctions information? (Choose two.)

Question217: 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?

Question218: According to the Financial Action Task Force, which action must a financial institution take to fulfill customer due diligence obligations?

Question219: After review of the financial institution's enterprise-wide anti-money laundering risk assessment, the new compliance officer identifies several deficiencies that need attention.
Which deficiency could lead to the highest potential for unmitigated risk?

Question220: Which three entities does the Third European Union Money Laundering Directive apply to?

Question221: Who has the day-to-day responsibility of communicating and reinforcing the established anti-money laundering compliance culture and program?

Question222: 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 wellknown philanthropist.
To whom should the investigator escalate these concerns?

Question223: 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?

Question224: Cybersecurity risk can result in identity theft by:

Question225: An anti-money laundering specialist has been asked to create internal anti-money laundering policies, procedures and controls for a recently chartered offshore financial institution.
Which three should be included? Choose 3 answers

Question226: An EU Trust and Company Service Provider (TCSP) analyst notices some unusual activity while looking through a customer's financial statements and detailed general ledger. The customer is in the business of importing and exporting machineries. Which transaction indicator warrants further escalation to the compliance officer?

Question227: Which assessments are involved in the processes of mutual evaluation and follow-up by the FATF?

Question228: 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.

Question229: What should senior management do in order to promote a culture of anti-money laundering compliance?

Question230: 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?

Question231: Who bears the ultimate responsibility for approving a financial institution's relationship with a politically exposed person?

Question232: 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?

Question233: Which of the following is the best action to take regarding a particular account once suspicious activity is reported by the institution?

Question234: 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

Question235: What is a method of placement that can be used by a money launderer in a deposit taking institution?

Question236: Which regulatory bodies cooperate when dealing with cross-border suspicious or unusual financial activity investigations?

Question237: A foreign bank maintains a correspondent account in the US. According to an investigation carried out by US authorities, the specific correspondent account seems to have facilitated a transaction involving tainted funds.
Which allows the US authorities to seize the funds of the foreign bank held with the US bank?

Question238: 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?

Question239: Which is an example of structuring with regards to money laundering?

Question240: Which regulatory bodies cooperate when dealing with cross-border suspicious or unusual financial activity investigations?

Question241: A compliance analyst is reviewing the account activity of a customer that they suspect may be indicative of money laundering activity. Which is difficult to determine solely from the customer's account activity and KYC file?

Question242: According to the Basel Committee, customer acceptance, customer due diligence, and record-keeping policies and procedures should be changed as necessary to:

Question243: The Office of Foreign Assets Control requirements have an extraterritorial reach because compliance is required by:

Question244: A non-U.S. bank asks its U.S. correspondent whether there is risk of having funds seized in their correspondent account if a customer is involved in a predicate offense.The correspondent bank's reply should be,

Question245: 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?

Question246: When may Office of Foreign Assets Control (OFAC) sanctioned-related transactions be allowed that would otherwise be prohibited?

Question247: Which statement is true regarding the FATF standards for SARs/STRs information sharing within a financial group?

Question248: Which is a key reason why a financial institution (FI) conducts an enterprise-wide AML risk assessment?

Question249: A compliance officer at an insurance company has been reviewing the transaction activity of several clients.
Which transaction is considered a red flag for potential money laundering?

Question250: 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.)

Question251: Financial Intelligence Units (FIUs) are responsible for:

Question252: 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?

Question253: A branch manager for a small community bank has a new customer who deposits for 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?

Question254: 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.)

Question255: An existing customer has changed its business scope and jurisdictions it deals with. Which are the steps the bank needs to take to manage sanctions compliance risk for this customer?

Question256: Which does the USA PATRIOT Act stipulate for foreign banks concerning correspondent banking?

Question257: 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.)

Question258: Which is a key characteristic of the Financial Action Task Force (FATF) Regional Style Bodies for combatting money laundering/terrorist financing?

Question259: 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

Question260: FATF recommends the incorporation of some measures in customer due diligence (CDD) programs including:

Question261: The owner of a local retail store makes multiple deposits daily at a bank. When the owner makes these deposits, it is noted that he goes to different tellers (cashiers). The deposits consist of cash in amounts less than the currency reporting threshold. Which of the following best describes this activity?

Question262: 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?

Question263: The Wolfsberg Principles for Private Banking list circumstances that would require additional due diligence, including activities that involve which three of these choices?

Question264: 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?

Question265: Which should a financial institution implement in order to identify and investigate money laundering activity from their clients? (Select Two.)

Question266: The Wolfsberg Anti-Money Laundering Principles for Private Banking require new clients to be approved by whom?

Question267: 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?

Question268: A foreign bank maintains a correspondent account in the US. According to an investigation carried out by US authorities, the specific correspondent account seems to have facilitated a transaction involving tainted funds.
Which allows the US authorities to seize the funds of the foreign bank held with the US bank?

Question269: 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.

Question270: 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?

Question271: What is an example of the integration stage of money laundering involving a bank or another deposit-taking institution?

Question272: Which is true about Financial Action Task Force (FATF)-Style Regional Bodies (FSRBs)?

Question273: What are the regulatory risks to a bank employee who willfully violates anti-money laundering laws?

Question274: OFAC-issued regulations apply to which entities? (Choose two.)

Question275: How should a compliance officer respond to law enforcement agencies' request for information on a customer undergoing an investigation?

Question276: Suspicious activity triggered a suspicious transaction report filing on a company that holds an account at a large commercial bank. Investigations revealed that a member of the bank's Board of Directors is the major shareholder of the company. Further review revealed the bank had no reasonable explanation for the activity, but could not confirm if criminal activity occurred. Which of the following is the next best course of action for the compliance officer?

Question277: Using the customer profile and expected activity information, a financial institution should be able to identify transactions that are difficult to:

Question278: A country that does not have strong predicate offenses and is lax in prosecuting AML cases could suffer which social/economic consequence?

Question279: 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.)

Question280: In order to demonstrate commitment to AML compliance within a bank, the Board of Directors should:

Question281: 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?