EMT Practice Test

1. Question Content...

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Question1: Under the Wolfsberg Correspondent Banking Principles, which action is considered an enhanced due diligence obligation to correspondent banking clients that present greater risks?

Question2: 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?

Question3: 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?

Question4: Which two actions should Financial Intelligence Units (FIUs) take when submitting a request to another FIU?
(Choose two.)

Question5: Which two aspects of precious metals pose the highest risk of money laundering? (Choose two.)

Question6: 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

Question7: What three attributes do havens for money laundering and terrorist financing typically have? Choose 3 answers

Question8: 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.)

Question9: 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?

Question10: An offshore company is owned by four equal partners that reside in separate jurisdictions. One partner presents an authenticated power of attorney apparently executed by the remaining three partners in his favor and requests that a bank account be opened on behalf of all partners. He needs this done quickly because there is a large deposit pending. The account-opening officer contacts the bank's anti-money laundering officer for advice. Which of the following should the anti-money laundering officer advise as an initial step?

Question11: Which economic and social factors could create a dependency on illicit activities and money laundering?
(Select Two.)

Question12: 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.)

Question13: In addition to monitoring for suspicious activity, what are electronic monitoring systems also valuable for?

Question14: What are two reasons physical certificates present a money laundering risk to broker-dealers? (Choose two.)

Question15: Which red flag should a compliance officer prioritize first for investigation?

Question16: Which are the two most common controls a financial institution (FI) uses to identify suspicious money-laundering activity? (Choose two.)

Question17: Which factor should a bank consider before sharing information about a customer with its broker-dealer affiliate in the case of an investigation?

Question18: Which safeguard is in place for Financial Intelligence Units (FIUs) to share information securely according to Egmont?

Question19: The Office of Foreign Assets Control requirements have an extraterritorial reach because compliance is required by:

Question20: A law enforcement agency submits several requests to a financial institution. Which request is legitimate and requires the bank to respond?

Question21: An AML compliance officer receives notice of government update including the names of the latest terrorists sanctioned by the United Nations Security Council. Which would be the most appropriate step to take?

Question22: Which aspect of the USA PATRIOT Act impacts foreign financial institutions?

Question23: 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.)

Question24: When implementing a risk-based approach related to casinos, which risks are related to the customer as an individual? (Choose two.)

Question25: 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

Question26: Which of the following activities is most likely associated with a lawyer participating in a money laundering scheme?

Question27: Which trading pattern may be indicative of money laundering in capital markets?

Question28: After several months of research, the Director of Marketing and the Managing Director of Business Development received approval to launch a branded, stored-value card that will be marketed to the diverse, primarily non-resident population that comprises the bank's current customer demographics. The Chief Credit Officer and the Risk Officer have also been involved in the efforts to develop the card. After the card is launched, the anti-money laundering officer is consulted. The anti-money laundering officer should advise the bank that compliance should have been involved

Question29: 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.)

Question30: Which is an objective of the Financial Action Task Force (FATF)-Style Regional Bodies (FSRBs)?

Question31: Which is often an indirect consequence of non-compliance with AML laws?

Question32: 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?

Question33: Which step should financial institutions take when complying with sanctions requirements?

Question34: 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?

Question35: 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?

Question36: When may Office of Foreign Assets Control (OFAC) sanctioned-related transactions be allowed that would otherwise be prohibited?

Question37: In which situation can money laundering adversely affect a country's currencies and interest rates due to launderers investing dirty funds?

Question38: In accordance with Financial Action Task Force (FATF) standards, when the minimum AML requirements of the host country where a financial institution (Fl) operates are less strict than those of the Fl's home country, the Fl:

Question39: A high-profile, successful entrepreneur has been a client of a Swiss private bank for more than a decade.
Recently, the entrepreneur launched a political career, with rather extremist political views. On which grounds can the bank terminate the client's bank relationship? (Select Two.)

Question40: When should a financial institution (FI) exit a relationship? (Choose two.)

Question41: Which approach ensures the successful implementation of a transaction monitoring system?

Question42: Which key aspect of the Office of Foreign Assets Control's extraterritorial reach specifically relates to prohibited transactions?

Question43: Which is a FATF characteristic used to assess a country's effectiveness of its AML regime?

Question44: A bank employee recently opened an account for a new restaurant. Daily cash deposits over a three-month period are close to $9,500.
What are two red flags that indicate possible money laundering or terrorist financing? (Choose two.)

Question45: In order for a terrorist organization to move funds from Cyprus to England through trade-based money laundering, which technique would be used?

Question46: What correspondent banking risk factor increases the risk for a Correspondent Bank?

Question47: Which three do the Office of Foreign Asset Control regulations cover? Choose 3 answers

Question48: Based on the USA PATRIOT Act, what action might the US take to demonstrate extraterritorial reach?

Question49: Which private banking situation requires due diligence actions to be implemented according to the AML principles of the Wolfsberg group?

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

Question51: A precious metals dealer opens a new account with a bank. Which requires a referral to AML Investigations for further review?

Question52: According to the Financial Action Task Force 40 Recommendations, Designated Non-Financial Businesses and Professionals include which entities?

Question53: Which principle about safeguarding privacy and data should an auditor adhere to when performing an AML investigation?

Question54: 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.)

Question55: Which action indicates possible Penza scheme activity?

Question56: 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?

Question57: 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?

Question58: Money laundering red flags associated with money service businesses include: (Select Two.)

Question59: The branch manager notices that a number of customers come in weekly and always use the same teller to process their deposits. The manager notices that the customers and the teller, who are from the same ethnic group, are speaking in a foreign language and every once in a while the customers from local ethnic restaurants will bring the teller lunch. The commercial customers that visit the teller generally deposit the same amount of cash each time they come in.
How should the branch manager respond to this activity?

Question60: What are the regulatory risks to a bank employee who willfully violates anti-money laundering laws?

Question61: 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?

Question62: 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?

Question63: What action does the USA PATRIOT Act allow the US government to take regarding financial institutions (FIs) that are based outside of the US?

Question64: 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.)

Question65: The AML investigator is reviewing the transaction monitoring alerts and the customer's historical profile for the past two years. A review of the negative news search from a blog indicates that the customer was previously part of a terrorist group. Which activities warrant further escalation? (Select Two.)

Question66: The USA PATRIOT Act requires United States (U.S.) financial institutions to collect certain information from non-U.S. banks that hold a correspondent account.
Which two pieces of information must a non-U.S. bank provide to its U.S. correspondent to enable them to comply with this requirement? (Choose two.)

Question67: 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.)

Question68: How can a financial institution verify the nature and purpose of a business and its legitimacy?

Question69: 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?

Question70: What should a bank do if it suspects one of its employees may be involved in mortgage loan fraud?

Question71: What action does the USA PATRIOT Act allow the US government to take regarding financial institutions (Fls) that are based outside of the US?

Question72: Which three are the most commonly used risk criteria?

Question73: 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?

Question74: Which of the following activities conducted at a financial institution is the strongest example of avoiding reporting thresholds?

Question75: What is the term for trading through multiple accounts, where an individual generates offsetting profits and losses and transfers of positions through accounts that do not appear to be commonly controlled?

Question76: A well-developed anti-money laundering compliance program is unlikely to achieve institutional goals without

Question77: The Wolfsberg Principles for Private Banking list circumstances that would require additional due diligence, including activities that involve which three of these choices?

Question78: 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?

Question79: 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?

Question80: The compliance officer for a private bank has been tasked with writing a policy on how the bank will deal with intermediaries.
Which two aspects should be included in the policy in respect of intermediaries to align it with the Wolfsberg Anti-Money Laundering Principles for Private Banking? (Choose two.)

Question81: Which action should countries take related to the financing of terrorist acts in accordance with the Financial Action Task Force 40 Recommendations?

Question82: What should an employee do after witnessing suspicious activity from a coworker?

Question83: Which principles should be included in a FATF-Style Regional Body (FSRB) update? (Choose two.)

Question84: A financial institution accepts new on-line customers. After customers have provided acceptable identification, the institution should next

Question85: Money laundering can cause which consequences for a financial institution? (Select Two.)

Question86: Which should a financial institution implement in order to identify and investigate money laundering activity from their clients? (Select Two.)

Question87: What should a financial institution (FI) do in response to a formal law enforcement request to produce documents?

Question88: Which are essential elements of a KYC program identified by the Basel Committee on Banking Supervision?
(Select Two.)

Question89: 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?

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

Question91: 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?

Question92: Why are Money Services Business (MSBs) frequently accused of being high risk for money laundering?

Question93: A bank provides trade financing for a company whose primary export is steel.
Which action by the company indicates possible money laundering?

Question94: Which of the following activities is most likely associated with a lawyer participating in a money laundering scheme?

Question95: Which method to launder money through deposit-taking institutions is closely associated with international trade?

Question96: 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.)

Question97: 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.)

Question98: An AML training program should include which requirement?

Question99: A charity has unaudited accounts. Which of the following represents the highest risk factor for terrorist financing?

Question100: 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?

Question101: 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?

Question102: What is a primary responsibility of a financial intelligence unit?

Question103: What core objective does the Egmont Group suggest would lead to an effective national Financial Intelligence Unit (FIU)?

Question104: 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?

Question105: Which of the following employee behaviors would not trigger an AML red flag?

Question106: 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?

Question107: 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?

Question108: 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?

Question109: When considering sharing information across the institution or within the same jurisdiction, what is the key legal issue that poses challenges to sharing customer-related information?

Question110: 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?

Question111: 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.)

Question112: Which should a financial institution implement in order to identify and investigate money laundering activity from their clients? (Select Two.)

Question113: Which is true about Financial Action Task Force (FATF)-Style Regional Bodies (FSRBs)?

Question114: Which of the following reflect money laundering risk indicators in relation to a securities account?
1. A high level of activity in that securities account immediately followed by a high volume of securities transactions.
2. Frequent wire transfers into an account immediately followed by debit card transactions.
3. Frequent wire transfers into an account immediately followed by checks (cheques) or other payment instruments drawn on the account.

Question115: Which of the following activities is most likely associated with a lawyer participating in a money laundering scheme?

Question116: Which regulatory bodies cooperate when dealing with cross-border suspicious or unusual financial activity investigations?

Question117: 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.)

Question118: Once a financial institution has reported suspicious transactions on a valued customer, it should cooperate with competent authorities by

Question119: When assessing and managing money laundering risks while operating in foreign jurisdictions different from that of the head office, an effective AML monitoring program should:

Question120: What are two aspects of the Wolfsberg Anti-Money Laundering (AML) Principles for Correspondent Banking? (Choose two.)

Question121: 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 7.52 million USD. Shortly thereafter, the client's father became president of Country B During a routine client review two years later, it was identified that the client's wealth had grown to 510 million USD. Which are two red flags that indicate money laundering or financial terrorism? (Select Two.)

Question122: 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.

Question123: Which type of sanctions are likely to be used first in order to avoid escalating violent conflicts and/or proliferation of weapons?

Question124: An institution is about to release a new peer to peer (P2P) funds transfer product to provide much needed remittance services to an under-banked population segment in the country.
The service allows customers to transfer funds through a mobile banking application to individuals worldwide entering only a name and mobile number. The new service charges less than comparable market solutions and offers real time transfer of funds. The customer onboarding process is conducted at branch locations with identity verification.
Which three present the highest anti-money laundering or sanctions risk and will require controls prior to launch? (Choose three.)

Question125: 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?

Question126: A foreign politically exposed person (PEP) requests to add a beneficiary to a file insurance policy.
How should the request be processed to mitigate risk?

Question127: According to the USA PATRIOT Act, under which condition would US financial institutions (Fls) maintain correspondent accounts for foreign shell banks?

Question128: The Wolfsberg Group has issued a number of documents since its inception aiming to:

Question129: What are three potential issues for foreign financial institutions maintaining correspondent accounts with U.S.
banks under the Patriot Act? Choose 3 answers

Question130: When a bank performs a risk assessment, what areas should an institution focus on?

Question131: 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.

Question132: Cybersecurity risk can result in identity theft by:

Question133: 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?

Question134: A local law enforcement officer notifies the bank compliance officer that he is working on an insurance fraud scheme that appears to be running transactions using the account of a bank employee. The law enforcement officer refers to a kiting suspicious transaction report filed by the compliance officer and requests further information.
What action should the compliance officer take?

Question135: Which of the following is among the Financial Action Task Force criteria defining non-cooperative countries and territories?

Question136: When a regulatory body requires international assistance in a money laundering inquiry, such assistance is typically obtained by

Question137: Which step should be taken to understand the types of financial institutions to whom the services are being offered when a correspondent bank permits "nested" relationships according to the Wolfsberg Group?

Question138: 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?

Question139: Three individuals enter a casino and use cash to purchase chips worth 20,000 USD. The trio uses 200 USD in chips to play games and then combine their funds to request a casino cheque. What is the potential red flag that alludes to money laundering?

Question140: Trusts established in certain offshore jurisdictions make good vehicles to lay under money for which ofthe following reasons?

Question141: OFAC-issued regulations apply to which entities? (Choose two.)

Question142: 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?

Question143: 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?

Question144: Which red flags should be considered prior to establishing a relationship with a third party? (Select Two.)

Question145: 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?

Question146: A bank compliance officer discovers cash deposit activity inconsistent with the expected and historical cash activity within the personal accounts of the chairman of the board. The cash activity appears structured to avoid the local legal filing requirements for large cash transactions, and a suspicious transaction report (STR) was filed.
How should the compliance officer report the filing of the STR to the board of directors without revealing the existence of the filing to the subject?

Question147: A bank maintains a relationship with a customer who owns a small bakery business.
Which customer action indicates potential money laundering?

Question148: A customer brings $15,000 worth of chips into a casino and plays various games. The customer redeems all the remaining chips and requests a wire transfer of the proceeds to an unrelated third party.
What are two red flags that indicate money laundering? (Choose two.)

Question149: Which assessments are involved in the processes of mutual evaluation and follow-up by the FATF?

Question150: What is a tool governments and multi-national bodies can use to prevent the proliferation of weapons of mass destruction?

Question151: The anti-money laundering compliance officer for a small money transmitter has several agent locations in the same geographic area in the United States. The customers are immigrants from Country A and the majority of the funds are remitted to Country A.
In a meeting with one of the agents, it is recently discovered that two new customers have been coming in three times a week and sending funds to the same recipient in Country B. Each cash transaction always totals exactly $8,000.
What should alert the agent to possible money laundering activity by the two customers?

Question152: While conducting a review of a medium-risk customer, an analyst noted that a newly added authorized signatory is a foreign politically exposed person (PEP). Which is the appropriate next step for the analyst to take?

Question153: What are two requirements for monitoring and reporting suspicious activity for correspondent banking according to the Wolfsberg Principles? (Choose two.)

Question154: 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

Question155: 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?

Question156: Which three actions should employees be instructed to do during an internal investigation?

Question157: 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?

Question158: 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.)

Question159: A compliance officer learns from an Information Technology (IT) source of a potential new financial service being discussed by the new product approval committee.
What is the correct next course of action?

Question160: On who does the ultimate responsibility for an institution's anti-money laundering program rest?

Question161: Which test should be included in a bank's Office of Foreign Assets Control sanctions screening audit program?

Question162: 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?

Question163: 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?

Question164: How should a financial institution respond to a verbal request from a law enforcement agency to keep an account open to assist in an investigation?

Question165: 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?

Question166: Under which two circumstances may law enforcement be given access to a financial institution customer's financial records? (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: According to the European Union Money Laundering Directives, "knowledge, intent or purpose"' required as an element for money laundering may be inferred from

Question170: What is an example of a legal risk a financial institution (FI) could face if it is sanctioned for failure to report suspected fraud activity?

Question171: Which of the following best describes the Basel Committee on Banking Supervision's principles on customer due diligence?

Question172: 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.

Question173: A compliance officer is developing an anti-money laundering program for a financial institution located in a Financial Action Task Force member country. The institution conducts business with customers located in countries/jurisdictions that are not members of Financia Action Task Force. Which of the following issues should be addressed in the program?
1. The requirement to identify the beneficial owners of accounts.
2. The requirement for customer identification for the opening of new accounts.
3. The financial institution's obligation to report suspicious transactions.
4. The obligation to freeze funds involved in suspicious transactions.

Question174: A bank received a subpoena regarding one of its clients. The financial intelligence unit of the bank should review the subpoena and:

Question175: Which regulatory bodies cooperate when dealing with cross-border suspicious or unusual financial activity investigations?

Question176: According to recommendations from the Financial Action Task Force, what role does a country's financial intelligence unit play in safeguarding against money laundering?

Question177: 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?

Question178: 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?

Question179: A customer's registered business activity is a domestic carpet cleaning company. Besides domestic receipts, there are incoming weekly transactions from an international reputable auction house starting at 15,000 USD and averaging 30,000 USD. The matching cash outgoings amount to
90% of the incoming deposits to non-related individuals. Which is most
concerning for potential money laundering?

Question180: Which three procedures should a compliance officer looking to revise an institution's CTF efforts include in accordance with the Wolfsberg Group's Statement on the Suppression of the Financing of Terrorism?

Question181: An anti-money laundering consultant audits a bank's current anti-money laundering policies, procedures and controls. The bank serves high-income, high net-worth clients who include non-residents and offshore businesses. During a review of the custom list, the anti-money laundering consultant determines that he and the bank have mutual clients. The bank's written anti-money laundering program includes a process for the bank to establish the identity of the person with whom they conduct business, but does not address monitoring of customer account activity.
The consultant should recommend the bank:

Question182: To understand if the customer operates in line with the firm's risk appetite for a specific industry segment, a financial institution must:

Question183: 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?

Question184: Which product type is subject to US extra-jurisdictional reach over non-US banks and non-US persons under the USA PATRIOT Act?

Question185: 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?

Question186: 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?

Question187: A director of a financial institution was convicted of laundering money as part of a Ponzi scheme and terminated. As a result of an internal investigation evidence proved that an employee assisted in the illegal activity.
Which action should the institution take?

Question188: Which should a financial institution implement in order to identify and investigate money laundering activity from their clients? (Select Two.)

Question189: In many jurisdictions, financial institutions are prohibited from hiring a person who has been convicted of what type of offense?

Question190: Which should a financial institution implement in order to identify and investigate money laundering activity from their clients? (Select Two.)

Question191: A popular restaurant in town has begun depositing less cash than it has in prior years. In a review of the customer's accounts, you notice that credit card receipts have increased with no .
The account officer discovers that the restaurant has installed a privately-owned automated teller machine (ATM) onsite and has begun construction on a patio dining area.
Which red flag should trigger additional investigation?

Question192: Which method is indicative of potential money laundering and terrorist financing activity?

Question193: 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,

Question194: Which of the following customer transactions with a securities dealer would indicate the highest suspicion of money laundering?

Question195: Law enforcement is confidentially investigating 20 individuals suspected of belonging to a criminal network allegedly involved in laundering tens of millions of euros for cybercriminals. Which actions need to be taken by the AML Specialist at a bank upon learning the alert? (Select Two.)

Question196: 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?

Question197: 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?

Question198: 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?

Question199: 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.

Question200: Why is the Mutual Legal Assistance Treaty (MLAT) a gateway for international cooperation?

Question201: According to the Financial Action Task Force, financial institutions should exit the relationship with a client in which case?

Question202: Which activity associated with new or developing technologies does the Financial Action Task Force recommend financial institutions pay special attention to?

Question203: Which of the following poses the greatest money laundering risk for a financial institution offering on-line services to customers?

Question204: The AML compliance officer of a financial institution (Fl) has been advised that the institution is being investigated by the country's financial intelligence unit (FIU). What should the AML compliance officer do?
(Select Two.)

Question205: A bank employee reviews wire transactions looking for indications of wire stripping.
Which two actions should the employee take to complete appropriate bank procedures? (Choose two.)

Question206: 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

Question207: 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.)

Question208: With which person(s) should an anti-money laundering officer coordinate when implementing a new hire screening program?

Question209: A company is endorsing the execution of terrorism through different activities, such as developing content for pro-terrorist television messages, encouraging the support of terrorist activities via the web, advertising the use of cryptocurrencies, and paying producers and reporters for television and web messaging. What specific action should be considered financing of terrorism?

Question210: A bank located in Arizona is considering a loan application for a new client. The collateral for the loan is a property in Florida.
The loan will be in the name of a limited company (LLC) whose ownership is not disclosed to the bank. The LLC was established by a New York-based attorney.
The loan will be repaid by the LLC in monthly wire transfers of $9,000 which is more than the required monthly payment.
Which aspect indicates potential for money laundering?

Question211: 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?

Question212: 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?

Question213: A new customer has just been onboarded in a securities firm. After a few weeks, there are unusual trading patterns that are being flagged. Which pattern is most concerning to the compliance officer?

Question214: 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?

Question215: What is the most effective criterion for determining the beneficial ownership of funds?

Question216: What is a major economic consequence of money laundering through the use of front companies?

Question217: Historically, which of the following vehicles is most often used to hide beneficial ownership?

Question218: A bank's anti-money laundering section receives an anonymous tip that a customer might be engaging in possible money laundering.
Which two facts should be considered during the course of an investigation into this matter? (Choose two.)

Question219: 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?

Question220: In performing a risk analysis, which factor(s) should a financial institution review?

Question221: At a small community bank, the compliance officer identifies unusual activity on a customer, who with his personal and company accounts, is the bank's largest depositor. The customer's companies have significant balances on their outstanding loans. The compliance officer notices that there is a lot of unusual movements of money between the customer's individual and business accounts. After filing a suspicious transaction report (STR), the compliance officer gets a call from law enforcement indicating that they want the bank to keep the account open while they conduct an investigation into the customer.
How should the compliance officer escalate this information to the board of directors?

Question222: 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?

Question223: A government has instituted a new anti-money laundering laws which require all financial institutions to obtain certain information from its customers.
Which step should an institution located in this jurisdiction take to ensure compliance?

Question224: Which activities conducted by a lawyer could be a red flag for money laundering? (Select Two.)

Question225: What is a key objective of the Egmont Group?

Question226: With which of the following should an anti-money laundering officer coordinate when implementing anew hire screening program?

Question227: A potential client calls a broker-dealer wishing to purchase securities. The client does not appear to be concerned with any fees associated with the account or price of the securities. Further information provided by the potential client indicates the individual may have relatives working for a company in which the potential client wants to invest. Which type of activity is the potential client attempting to commit?

Question228: 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?

Question229: Which are key objectives of the Egmont Group? (Select Two.)

Question230: A customer opens a corporate account with a broker-dealer on behalf of several beneficial owners, with a stated long-term investment goal. The customer deposits $25.5 million into the account and three days later transfers $5 million to an overseas bank. Shortly thereafter, the customer begins making numerous purchases of pesos. The compliance officer receives a query regarding the movement of funds. Within a month of account opening, the customer depletes the account.
Which two red flags should prompt the firm's compliance officer to take action? (Choose two.)

Question231: An oil exploration company based in France does business with oil refineries in Iran, which is subject to comprehensive Office of Foreign Assets Control (OFAC) sanctions. What type of OFAC sanctions should be imposed against the French company?

Question232: An internal investigation log is primarily intended to:

Question233: FATF recommends the incorporation of some measures in customer due diligence (CDD) programs including:

Question234: What describes the Black Market Peso Exchange money laundering method?

Question235: a personal banking customer who simultaneously opens several accounts will most likely cause further inquiry in which of the following scenarios?

Question236: 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?

Question237: To what extent should senior management and the Board of Directors be involved in the filing of any STR?

Question238: 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?

Question239: Which of the following is considered a shell bank as defined by the USA PATRIOT Act?

Question240: Which factors should lead to a reassessment of the current AML program? (Select Two.)

Question241: 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?

Question242: How should a compliance program respond to an AML audit finding?

Question243: A bank's transaction surveillance system triggers an alert for a deposit of 250.000 USO into a client's account.
According to the bank's KYC information, the client works for a financial advisory firm, and earns approximately 100,000 USD per year. Which actions should be taken? (Select Three.) File the suspicious transaction immediately to the financial intelligence unit.

Question244: Which of the following is the main reason Internet gambling is an ideal web-based money laundering method?

Question245: The Financial Action Task Force recommends the incorporation of some measures in customer due diligence programs including:

Question246: When providing reporting of STRs to the board, which of the following should be provided?

Question247: Which two methods have terrorist groups used to diversify their revenue stream and to fund their operations?
(Choose two.)

Question248: 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.)

Question249: 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.)

Question250: Which is the most severe consequence for a financial institution if the regulator finds it is in breach of AML regulatory obligations?

Question251: Which of the following customer activities poses the highest risk of money laundering?

Question252: Which of the following is the best action to take regarding a particular account once suspicious activity is reported by the institution?

Question253: An immigrant residing in the United States opens a bank account that includes a debit card. Several months later, the transactional monitoring system identifies small deposits into the account followed by corresponding ATM withdrawals from a country bordering a conflict zone.
How should the bank respond?

Question254: A new accounts representative recently opened an account for individual whose stated employment is tutoring students.
Which customer action indicates possible money laundering?

Question255: Which three conduits for moving terrorist-related funds do terrorist financing generally favor? Choose 3 answers

Question256: What should an effective anti-money laundering training program include?

Question257: Which transaction should result in a suspicious activity report filing?

Question258: When an existing customer becomes a politically exposed person (PEP), what should the KYC analyst do during the review/refresh period?

Question259: Which transaction monitoring processes would alert a bank for red flag activity?

Question260: A law enforcement agent is conducting an investigation into a possible money laundering event. During the investigation, the officer will use:

Question261: Historically, which vehicle is most often used to hide beneficial ownership?

Question262: 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?

Question263: Which action should financial institutions with cross border correspondent banking activity be required to perform according to the Financial Action Task Force 40 Recommendations?

Question264: 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?

Question265: Which three elements should be considered in an institution's enhanced due diligence process to assure itself that it has secured sufficient understanding of its higher risk respondent bank customers according to the Wolfsberg Principles on Correspondent Banking?

Question266: AML training programs should extend beyond basic concepts to deliver targeted training by:

Question267: 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?

Question268: A benefit of using bearer shares in corporate formations is that bearer shares are:

Question269: 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?

Question270: Release of the EU's Fourth AML Directive resulted in what change to member state*s procedures? (Select Two.)

Question271: Which response represents a high-level principle for FATF-Style Regional Bodies (FSRB)?

Question272: What kind of person should perform the independent testing of an institution's anti-money laundering program?

Question273: What is the appropriate compliance control for identifying politically exposed persons (PEPs) according to the Basel Committee's paper on Customer Due Diligence for Banks?

Question274: 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.)

Question275: How does the Financial Action Task Force (FATF) measure the effectiveness of a country's efforts to combat money laundering and terrorist financing?

Question276: A national Financial Intelligence Unit, which is responsible for receiving, analyzing and disseminating disclosure of financial information, should consider becoming a member of what organization?

Question277: 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?

Question278: A bank has opened a new account for a well-known attorney to manage client funds. During the first six months, bank staff observe the account receives multiple deposits via wire transfer. They also observe that the attorney withdraws cash, makes payments to various people, and transfers funds to the law firm's account online.
What is considered a red flag for potential money laundering in this situation?

Question279: 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?

Question280: 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

Question281: 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?

Question282: Which information must a United States financial institution retain for having foreign correspondent accounts as part of the USA PATRIOT Act record keeping requirements?

Question283: Which three methods are commonly used by an accountant to launder money? (Choose three.)

Question284: 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?

Question285: A typical red flag regarding potential money laundering in connection with an art purchase occurs when a customer:

Question286: 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?

Question287: 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?

Question288: A country that does not have strong predicate offenses and is lax in prosecuting AML cases could suffer which social/economic consequence?

Question289: Which three entities does the Third European Union Money Laundering Directive apply to?

Question290: 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?

Question291: Which element is generally required of all anti-money laundering programs?

Question292: When an institution files an STR with regard to a particular account, what steps should the institution take visa account?

Question293: To ensure that an institution's anti-money laundering program is current, which step should be taken?

Question294: What is an indicator of suspicious activity?