Question1: According to the Financial Action Task Force 40 Recommendations, simplified customer due diligence or reduced measures could be acceptable for which of the following types of products or transactions?
1. Life insurance policies where the annual premium is no more than USD/EUR 1,000 or a single premium of no more than USD/EUR 2,500.
2. Insurance policies for pension schemes if there is no surrender clause and the policy cannot be used as collateral.
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4. Trusts where the settlor, trustee and beneficiaries are identified and the shares are in bearer form.
Question2: 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.
Question3: 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.)
Question4: Which trading pattern may be indicative of money laundering in capital markets?
Question5: A financial institution (FI) is conducting a complex investigation of unusual patterns of activity involving multiple businesses, triggered by an automated monitoring system alert.
Which techniques would be most efficient for conducting the investigation? (Select Two.)
Question6: The Wolfsberg Principles for Private Banking list circumstances that would require additional due diligence, including activities that involve which three of these choices?
Question7: Which statement about the extraterritorial reach of U.S. laws and legislation is accurate?
Question8: Which type of sanctions are likely to be used first in order to avoid escalating violent conflicts and/or proliferation of weapons?
Question9: 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?
Question10: 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?
Question11: A country that does not have strong predicate offenses and is lax in prosecuting AML cases could suffer which social/economic consequence?
Question12: What kind of person should perform the independent testing of an institution's anti-money laundering program?
Question13: 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?
Question14: 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?
Question15: 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.)
Question16: What was the topic the Wolfsberg Group's first guidance addressed?
Question17: An AML analyst at a financial institution is examining an alert generated by the automated transaction monitoring system to determine whether the alert should be escalated to the AML unit for further investigation or archived as a false positive.
Which action might be reasonable for the AML analyst to take?
Question18: UN sanctions are the most effective and legitimate non-violent multilateral tools to respond to international security threats when they:
Question19: Which type of formal agreement occurs between countries that wish to aid each other in the investigation and enforcement of criminal laws?
Question20: 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?
Question21: A compliance officer was recently reviewing transactional data for an international charity and found transactions that present a higher risk.
Which reason is cause for terminating the banking relationship?
Question22: 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?
Question23: An anti-money laundering specialist has been hired by an independently-owned community bank to implement an anti-money laundering compliance program. This bank has recently seen a dramatic increase in the number of international electronic fund transfers from its commercial clients. The first thing the anti-money laundering specialist should do is
Question24: Which insurance product is particularly vulnerable to money laundering?
Question25: Which test should be included in a bank's Office of Foreign Assets Control sanctions screening audit program?
Question26: 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?
Question27: According to the European Union Money Laundering Directives, "knowledge, intent or purpose"' required as an element for money laundering may be inferred from
Question28: 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?
Question29: 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.
Question30: When providing reporting of STRs to the board, which of the following should be provided?
Question31: The compliance department receives an internal referral that appears to indicate terrorist financing. What is the first step that should be taken in the investigation process?
Question32: 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?
Question33: When using virtual assets such as Bitcoin to finance terrorism, which tactic may be used to ensure that the virtual assets are not easily seized by law enforcement?
Question34: According to the Basel Committee on Banking Supervision, banks should deal with high-risk customers by:
Question35: 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?
Question36: A client opens a bank account for a multi-level marketing company. The debits and credits of the account are numerous and very involved. Further, there are a lot of international transactions. Also, funds are being tunneled from the company to the client's personal account in another jurisdiction.
Which two steps should law enforcement take in investigating this matter? (Choose two.)
Question37: According to the Financial Action Task Force 40 Recommendations, Designated Non-Financial Businesses and Professions include
Question38: When should new business products to evaluated for AML concerns?
Question39: 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?
Question40: Which situation would require enhanced due diligence be performed on a customer?
Question41: Which factors specific to the securities industry increase the exposure to money laundering risk? (Select Two.)
Question42: 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.)
Question43: Which of the following are risk factors a financial institution should examine when onboarding a new corporate customer? (Select Three.)
Question44: 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?
Question45: 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?
Question46: A country that does not have strong predicate offenses and is lax in prosecuting AML cases could suffer which social/economic consequence?
Question47: What is the importance of a risk-based approach (RBA) and building controls commensurate with risks?
Question48: 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?
Question49: Which of the following statements best describes the role of the Board of Directors in overseeing an institution's AML governance and compliance framework, according to the Basel Committee on Banking Supervision?
Question50: According to the Basel Committee principles, which actions would make a customer identification program at a bank more robust? (Select Two.)
Question51: Which method to launder money through deposit-taking institutions is closely associated with international trade?
Question52: A commission rogatory would be used in which gateway to obtain information from another country?
Question53: 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 QUESTIO N N O:s and left a business card.
What should the compliance officer do?
What should the compliance officer do?
Question54: Under which two circumstances may law enforcement be given access to a financial institution customer's financial records? (Choose two.)
Question55: Which three are the most commonly used risk criteria?
Question56: Which method do terrorist financiers use to move funds without leaving an audit trail?
Question57: A charity has unaudited accounts. Which of the following represents the highest risk factor for terrorist financing?
Question58: a personal banking customer who simultaneously opens several accounts will most likely cause further inquiry in which of the following scenarios?
Question59: A new compliance officer is reviewing the bank's anti-money laundering program and notices that the risk assessment was completed six months ago. Since that time, the bank acquired another financial institution, renamed the internal records group, and streamlined cash handling procedures.
Which factor causes the compliance officer to update the bank's risk assessment?
Question60: The findings of an internal audit discover that a large group of employees do not know how to handle Politically Exposed Persons (PEPs). Which is the next course of action that should be taken?
Question61: 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.)
Question62: Which elements can trigger a review of the existing relationship during the opening of a new account? (Select Two.)
Question63: To understand if the customer operates in line with the firm's risk appetite for a specific industry segment, a financial institution must:
Question64: A compliance officer is reviewing the activity of the wire transfer department for the previous month and identifies an unusual wire transfer from a customer's account.
Which information should be included in the review of the customer's activity?
Question65: What is a primary responsibility of a financial intelligence unit?
Question66: Which section of the USA PATRIOT Act permits the U.S. government to seize funds deposited in a U.S. correspondent account of a foreign bank, creating extraterritorial impact?
Question67: 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?
Question68: 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?
Question69: 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?
Question70: Which red flag is most relevant to money laundering through capital markets?
Question71: 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.)
Question72: A financial institution accepts new on-line customers. After customers have provided acceptable identification, the institution should next
Question73: According to the Financial Action Task Force methodology, which situations would require a financial institution (FI) to consider filing a suspicious activity report?
Question74: An employee in a corporation's finance department hears news of an internal investigation into potential fraud within the company, quits their job, and disappears.
If they had been observed before their resignation, which characteristics of the employee would have been considered red flags? (Select Two.)
Question75: On discovering employees had unintentionally provided assistance to customers who were structuring transactions, an anti-money laundering specialist should recommend
Question76: Which actions should be taken by a financial institution (FI) when it receives a grand jury subpoena regarding a customer?
Question77: 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.)
Question78: What indicates potential money laundering activity by a lawyer?
Question79: What should an effective anti-money laundering training program include?
Question80: Bank A is located in Country A. A wire transfer from Bank B located in Country B is processes by Bank A, where the funds are being moved to a customer at Bank C located in Country C. The wire transfer is deemed suspicious by Bank A.
Who should Bank A file a suspicious transaction report on?
Question81: A credit institution has been served with a preliminary findings report highlighting major deviations from AML obligations in its country and stating that it faces the possibility of withdrawal of its banking license.
Which authorities could have issued the report?
Question82: Gatekeepers, including accountants, can be well-positioned to identify and detect changes in the type of work or the nature of a client's activities.
In order to do so, they need to understand the risks associated with: (Select Two.)
Question83: A bank maintains a relationship with a customer who owns a small bakery business.
Which customer action indicates potential money laundering?
Question84: One area of responsibility for the Board of Directors when implementing a successful AML program is to:
Question85: According to the Basel Committee, customer acceptance, customer due diligence, and record-keeping policies and procedures should be changed as necessary to:
Question86: Potential indicators of money laundering associated with Trust and Company Service Providers include: (Select Two.)
Question87: In addition to monitoring for suspicious activity, what are electronic monitoring systems also valuable for?
Question88: A bank provides trade financing for a company whose primary export is steel.
Which action by the company indicates possible money laundering?
Question89: Which operational situation might indicate that money laundering is occurring at or through a deposit-taking financial institution?
Question90: Which three methods are commonly used by an accountant to launder money? (Choose three.)
Question91: 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?
Question92: 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?
Question93: What is a method of placement that can be used by a money launderer in a deposit taking institution?
Question94: A compliance officer is conducting a review of the automated transaction monitoring system. What would be most likely to result in a change in the monitoring system parameters?
Question95: When should a financial institution (FI) exit a relationship? (Choose two.)
Question96: Upon filing a suspicious transaction report, which of th€ following elements should be the highest anti-money laundering priority in making the decision to keep the account open?
Question97: Which is the first valid step in the Mutual Legal Assistance Treaties international cooperation process?
Question98: Which of the following is a red flag indicating potential money laundering or terrorism financing through dealers of precious metals or high-value items?
Question99: Which activity is most likely to facilitate money laundering through on-line banking systems with inadequate controls?
Question100: 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?
Question101: When may Office of Foreign Assets Control (OFAC) sanctioned-related transactions be allowed that would otherwise be prohibited?
Question102: 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?
Question103: Which statements describe risks that are associated with international business corporations? (Select Two.)
Question104: Based on studies executed by the Organization for Economic Cooperation and Development (OECD), which occupations are particularly vulnerable to the use of false identities and identity theft?
Question105: 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?
Question106: An example of an external factor that will affect an organization's AML risk is:
Question107: 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?
Question108: What is a major economic consequence of money laundering through the use of front companies?
Question109: The main purpose of the US Treasury Department for OFAC's extraterritorial reach is to:
Question110: 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.
Question111: 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?
Question112: Which two methods have terrorist groups used to diversify their revenue stream and to fund their operations?
(Choose two.)
Question113: 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:
Question114: 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?
Question115: Money laundering red flags associated with money service businesses include: (Select Two.)
Question116: Which requirement is included in the Fourth European Union Directive on money laundering?
Question117: 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.)
Question118: Which factors should lead to a reassessment of the current AML program? (Select Two.)
Question119: The Basel Committee on Banking Supervision published guidelines on the "Sound Management of Risks Related to Money Laundering and Financing of Terrorism." With regard to identifying and accepting customers, it recommends that banks: (Select Two.)
Question120: 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?
Question121: According to the Financial Action Task Force (FATF) methodology, which situations would require a financial institution (FI) to consider filing a Suspicious Activity Report (SAR)?
Question122: 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?
Question123: What are the roles of a government Financial Intelligence Unit (FIU)? (Select Three.)
Question124: 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?
Question125: Which three criteria does a shell bank meet according to the Wolfsberg Principles on Correspondent Banking? Choose 3 answers.
Question126: 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?
Question127: In order to demonstrate commitment to AML compliance within a bank, the Board of Directors should:
Question128: 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.)
Question129: According to the Financial Action Task Force, as part of their risk assessment, which are important data and information that a Trust and Company Service Provider must understand when establishing and administering a trust? (Select Two.)
Question130: 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?
Question131: What is the relationship between the EU Anti-Money Laundering Directives (AMLDs) and local AML regulations in European Union (EU) member states? (Select Two.)
Question132: Which unusual or suspicious activity by a financial institution's (FI's) employee requires additional investigation and scrutiny?
Question133: A law enforcement action alleged that, over the course of two months, defendants engaged in a series of copper, gold, crude oil, and natural gas futures transactions on an electronic trading platform.
One defendant repeatedly bought future contracts at low prices from another party and immediately sold them back at higher prices, effectively ensuring that one defendant made profits while the other took losses, even though there was no actual market risk involved.
What is the name of this typology?
Question134: Which is a key reason why a financial institution (FI) conducts an enterprise-wide AML risk assessment?
Question135: 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 QUESTIO N N O :s 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?
Question136: The most effective tool used to detect structured transactions is
Question137: Which changes at a financial institution (FI) should trigger an enterprise-wide reassessment of its inherent AML risk exposure? (Select Three.)
Question138: Why should a financial institution (Fl) require an update of its AML risk assessment?
Question139: What should a financial institution (FI) do in response to a formal law enforcement request to produce documents?
Question140: Which step should financial institutions take when complying with sanctions requirements?
Question141: Which is a red flag for funds transfers?
Question142: According to Basel Committee on Banking Supervision's Customer Due Diligence for Banks, which of the following should provide an evaluation of a bank's policies and procedures independent from its management?
Question143: 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?
Question144: Which is an indicator that there is an attempt to conceal a company's true beneficial ownership?
Question145: What is a tool governments and multi-national bodies can use to prevent the proliferation of weapons of mass destruction?
Question146: 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?
Question147: Which practices should financial institutions (FIs) adopt for the process of terminating customer relationships? (Select Three.)
Question148: What are three potential issues for foreign financial institutions maintaining correspondent accounts with U.S. banks under the Patriot Act? Choose 3 answers
Question149: Which scenario best justifies why a customer's account might be closed by a financial institution?
Question150: What should an employee do after witnessing suspicious activity from a coworker?
Question151: Which action does the Financial Action Task Force (FATF) recommend be taken against jurisdictions that have strategic deficiencies?
Question152: 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?
Question153: Which measure to mitigate risk does the Basel Committee's Customer Due Diligence Principles suggest banks apply when accepting business from non-face-to-face customers?
Question154: A recent anti-money laundering audit revealed several regulatory reporting violations and lapses with the organization's anti-money laundering policy. As a result, the compliance officer has created a follow-up matrix to document progress in correcting the identified deficiencies.
To whom should the compliance officer provide regular updates of corrective action to help ensure the appropriate oversight?
Question155: Which three conduits for moving terrorist-related funds do terrorist financing generally favor? Choose 3 answers
Question156: According to the Financial Action Task Force 40 Recommendations, Designated Non-Financial Businesses and Professionals include which entities?
Question157: What does designing a country as being of "prime money laundering concern" allow the U.S. government to do?
Question158: 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.)
Question159: 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.)
Question160: 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?
Question161: The Office of Foreign Assets Control requirements have an extraterritorial reach because compliance is required by:
Question162: 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?
Question163: Which is a key goal of EU Directives on money laundering?
Question164: 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.
Question165: 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?
Question166: How should a compliance officer respond to law enforcement agencies' request for information on a customer undergoing an investigation?
Question167: A suspicious transaction report filed on a car dealer structuring deposits initiates a criminal investigation. The dealer changes branches and begins placing transactions with a frontline employee to whom the dealer has given numerous gifts.
This employee handles all of the dealer's structured deposits and does not report the suspicious activity internally.
The competent authority has advised the anti-money laundering specialist to avoid tipping off the employee until the investigation is finalized.
What action should the specialist take next?
Question168: Which section of the USA PATRIOT Act permits the U.S. government to seize funds deposited in a U.S. correspondent account of a foreign bank, creating extraterritorial impact?
Question169: A compliance officer identifies a potentially significant risk in a popular financial product. Further investigation reveals there is no mitigating control.
Which course of action should the compliance officer take?
Question170: According to experts, what is the most effective way to prevent money laundering through financial institutions?
Question171: Which payment method for purchasing luxury items is a red flag for potential money laundering?
Question172: According to the Financial Action Task Force, which action must a financial institution take to fulfill customer due diligence obligations?
Question173: A junior account manager within an international private bank in Country A was asked by one of his valued customers, who has held an account for several years in the institution, about depositing a large sum of cash into her account. The junior account manager informed his customer that his bank does not accept cash. The junior account manager later reviewed a customer activity report and noticed a number of smaller dollar wires from banks in neighboring Country B, which has lax currency controls, that totaled about as much as the customer intended to deposit.
What should the junior account manager do?
Question174: 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?
Question175: Which step should financial institutions take when complying with sanctions requirements?
Question176: What does the Egmont Group's support for its members include?
Question177: Which scenario indicates potential money laundering activity by a lawyer?
Question178: 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?
Question179: Which type of sanctions are most likely to be used in order to avoid escalating violent conflicts and/or proliferation of weapons?
Question180: To ensure that an institution's anti-money laundering program is current, which step should be taken?
Question181: 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?
Question182: 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
Question183: Which of the following corporate structures present a higher money laundering risk due to reduced transparency? (Select Three.)
Question184: 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?
Question185: According to FinCEN, which red flags within a bank account may, taken together, be indications of modern slavery, human trafficking, and exploitation? (Select Two.)
Question186: A Financial Intelligence Unit (FIU) in a country receives a SAR involving potential money laundering. The FIU wants to share this information with a foreign FIU.
Which mechanism allows secure information sharing between FIUs?
Question187: According to Basel Committee guidelines, which level of the organization should determine whether or not to enter business relationships with higher risk customers?
Question188: How should a financial institution deter money laundering through new accounts? Choose 3 answers
Question189: During a law enforcement investigative interview regarding potential money laundering, the suspect starts making assertions and statements that the investigator believes are false.
How should the investigator respond?
Question190: Which of the following statements is true regarding the 2012 Financial Action Task Force (FATF) 40 Recommendations and/or 11 Immediate Outcomes?
Question191: When an institution files an STR with regard to a particular account, what steps should the institution take visa account?
Question192: 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.)
Question193: 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?
Question194: Which two factors assist a money laundering investigation that involves multiple countries? (Choose two.)
Question195: When should the anti-money laundering risk assessment be updated?
Question196: A bank received a subpoena regarding one of its clients. The Financial Intelligence Unit (FIU) of the bank should review the subpoena and:
Question197: In which two ways does a government Financial Intelligence Unit interact with public and private sectors?
(Choose two.)
Question198: Which method to finance terrorism involves falsifying transaction-related documents?
Question199: Under requirements for correspondent accounts in the USA PATRIOT Act, the word "certification" refers to a written representation by a
Question200: Why do governments and multi-national bodies impose economic sanctions?
Question201: What is an essential element of Know Your Customer (KYC) standards according to the Basel Committee's Customer Due Diligence for Banks paper?
Question202: 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?
Question203: 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?
Question204: Which of the following customer activities poses the highest risk of money laundering?
Question205: 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.)
Question206: Money laundering can cause which consequences for a financial institution? (Select Two.)
Question207: According to the Second European Union Money Laundering Directive, what may knowledge of criminal conduct be inferred from?
Question208: Which activity would require an update to the first line training program?
Question209: What are two aspects of the Wolfsberg Anti-Money Laundering (AML) Principles for Correspondent Banking? (Choose two.)
Question210: 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.
Question211: What is the primary action a financial institution should take before formulating its anti-money laundering program?
Question212: The regulators of a US financial institution find that the institution has failed to establish and maintain a reasonably designed AML program. Which regulatory actions should be taken? (Select Two.)
Question213: A law enforcement agent is conducting an investigation into a possible money laundering event. During the investigation, the officer will use:
Question214: 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?
Question215: When performing a risk assessment, which factors should be considered when identifying and measuring risk? (Choose two.)
Question216: The bank's Compliance Officer is tasked with designing standards based on Basel's KYC principles. Which essential elements should be included in the program? (Choose two.)
Question217: Who bears the ultimate responsibility for approving a financial institution's relationship with a politically exposed person?
Question218: 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?
Question219: A Trust and Company Service Provider (TCSP) providing services should have policies and procedures in place to identify critical information of the:
Question220: Which of the following is among the Financial Action Task Force criteria defining non-cooperative countries and territories?
Question221: 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.)
Question222: 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.)
Question223: Which key aspect of the Office of Foreign Assets Control's extraterritorial reach specifically relates to prohibited transactions?
Question224: What is an indicator of suspicious activity?
Question225: 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?
Question226: 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)?
Question227: An international bank is headquartered in Madrid, Spain, with an office in New York City (NYC), US. The Madrid office is investigating a transaction originating from a customer of the NYC office and inquires whether the NYC office can share any relevant further information on the individual. Upon further research, the NYC office finds that they have filed a Suspicious Activity Report (SAR) on the individual in the previous year.
Which factors need to be considered before sharing the requested information? (Select Two.)
Question228: A customer living in a high-risk jurisdiction makes frequent, large cash deposits at a bank. The same customer sends small wire transfers to unrelated parties in other high-risk jurisdictions.
What are two red flags that may indicate money laundering? (Choose two.)
Question229: What reputational risk consequence could a financial entity face for violating AML laws?
Question230: Which activities conducted by a lawyer could be a red flag for money laundering? (Select Two.)
Question231: 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?
Question232: 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).
Question233: 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.)
Question234: Which is an extraterritorial function of Office of Foreign Assets Control sanctions?
Question235: Which statement about U.S. Specified Unlawful Activities (SUA) is true?
Question236: Which suspicious activity may be the strongest indicator of money laundering through a casino?
Question237: When an existing customer becomes a politically exposed person (PEP), what should the KYC analyst do during the review/refresh period?
Question238: Which is a valid extraterritorial effect of the USA PATRIOT Act?
Question239: 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?
Question240: What should senior management do in order to promote a culture of anti-money laundering compliance?
Question241: 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?
Question242: Which statement is true regarding the Financial Action Task Force standards for suspicious activity reports (SARs) information sharing within a financial group?
Question243: Why are Money Services Business (MSBs) frequently accused of being high risk for money laundering?
Question244: When an institution receives a document request from law enforcement with regard to an STR that the institution has filed, what should institution do?
Question245: An international bank is investigating a payment requested by one of its correspondent relationships that generated an alert in the automated transaction monitoring system.
The payment originated from a corporation located in Hong Kong, and the final beneficiary is an individual in New York.
Which steps should the bank take first to address the alert? (Select Three.)
Question246: Cybersecurity risk can result in identity theft by:
Question247: 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.)
Question248: FATF recommends the incorporation of some measures in customer due diligence (CDD) programs including:
Question249: What describes the Black Market Peso Exchange money laundering method?
Question250: Section 319(a) of the USA PATRIOT Act:
Question251: 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?
Question252: According to Basel Committee on Banking Supervision guidelines, which of the following statements best describes the relationship between the internal audit function and compliance?
Question253: 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?
Question254: Which principles should be included in a FATF-Style Regional Body (FSRB) update? (Choose two.)
Question255: Under the Egmont Group Principles, information exchange among financial intelligence units (FlUs) should be conducted:
Question256: 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?
Question257: A U.S. bank recently received a regulatory order to remediate its AML programs, which included several violations of law.
What degree of accountability is it possible for the bank's senior management and employees to face?
Question258: What are two requirements for monitoring and reporting suspicious activity for correspondent banking according to the Wolfsberg Principles? (Choose two.)
Question259: Which of the following scenarios warrants enhanced due diligence (EDD)? (Select Three.)
Question260: 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?
Question261: What should a bank do if it suspects one of its employees may be involved in mortgage loan fraud?
Question262: During an ongoing investigation into a client's activities by a competent authority, a compliance officer should
Question263: Which does the USA PATRIOT Act stipulate for foreign banks concerning correspondent banking?
Question264: Which product is considered to be of highest money laundering risk?
Question265: 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
Question266: 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.)
Question267: 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.)
Question268: 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,
Question269: Which risks are involved in a correspondent banking client's ownership and management structure? (Select Two.)
Question270: A key element required to ensure an anti-money laundering compliance program is effectively embedded into an institution's culture is
Question271: A legal instrument executed between two nations governing cross-border information sharing is called a:
Question272: Which of the following activities are considered money laundering red flags when reviewing business operations of a money services business (MSB)? (Select Two.)
Question273: How does the Financial Action Task Force (FAT F) measure the effectiveness of a country's efforts to combat money laundering and terrorist financing?
Question274: How should law enforcement obtain documentation from an institution when suspicious activity was identified? (Choose two.)
Question275: Trusts established in certain offshore jurisdictions make good vehicles to lay under money for which ofthe following reasons?
Question276: A startup virtual currency exchange has registered as a money services business and will commence operations in six months. The company will provide digital wallets to customers to hold their virtual currency after purchase. Customers will have the option to conduct purchases of the virtual currency and transfer the currency to and from the digital wallet. The startup must develop an anti-money laundering compliance program prior to launch.
Which two anti-money laundering responsibilities should be considered before business launch? (Choose two.)
Question277: A financial institution has expanded its scope of services so that it is attracting the business of politically exposed persons (PEPs) who had previously never been part of the customer base.
Which two courses of action should the compliance officer include in the institution's procedures for considering PEPs as customers? (Choose two.)
Question278: Who meets the standard to perform the AML audit? (Select Two.)
Question279: 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.)
Question280: An internal investigation log is primarily intended to:
Question281: Which red flags could indicate increased terror financing and money laundering risks related to cultural objects? (Select Three.)
Question282: 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?
Question283: What is a core function of a Financial Intelligence Unit (FIU) as described in FATF Recommendation 29?
Question284: A Financial Intelligence Unit (FIU) in a country has received a Suspicious Activity Report (SAR) involving significant suspicious fund transfers, both domestically and internationally. The FIU requires additional information from a foreign country to determine whether the matter needs to be referred for prosecution locally.
Which of the following statements is true in this scenario?
Question285: What are the regulatory risks to a bank employee who willfully violates anti-money laundering laws?
Question286: Which statement about a multinational institution's ability to fully investigate unusual activity in all its foreign operations is correct?
Question287: 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.)
Question288: 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?
Question289: Which is the first valid step in the Mutual Legal Assistance Treaties (MLAT) international cooperation process?
Question290: Which reputations risk consequence could a financial entity face for violating AML laws?
Question291: Which three entities does the Third European Union Money Laundering Directive apply to?
Question292: Which is the most severe consequence for a financial institution if the regulator finds it is in breach of AML regulatory obligations?
Question293: 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:
Question294: Which scenario should be escalated as potentially suspicious activity?
Question295: Which primary international authoritative body designates sanctions?
Question296: 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?
Question297: A legal instrument that is executed between two nations and governs cross-border information sharing is known as a:
Question298: 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?
Question299: 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?
Question300: Why is the Mutual Legal Assistance Treaty (MLAT) a gateway for international cooperation?
Question301: The manager of a bank's KYC team discovers that a high-risk customer's activity was not reviewed last quarter as required by the bank's internal compliance schedule.
What should the KYC team manager do?
Question302: The bank's internal financial intelligence unit (FIU) has reviewed activity related to a politically exposed person (PEP); the activity in the account contains a large, round number, one time wire to an obscure organization. Which would not be a sufficient reason to file a SAR/STR?
Question303: What correspondent banking risk factor increases the risk for a Correspondent Bank?
Question304: When a government imposes economic sanctions on a target, the purpose is to:
Question305: Which is a FATF characteristic used to assess a country's effectiveness of its AML regime?
Question306: What is a key objective of the Egmont Group?
Question307: 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?
Question308: A U.S. bank recently received a regulatory order to remediate its AML programs, which included several violations of law.
What degree of accountability is it possible for the bank's senior management and employees to face?
Question309: Which two statements in the Wolfsberg Group's "Suppression of the Financing of Terrorism" define the role financial institutions should play in the fight against terrorism? (Choose two.)
Question310: A bank in the Netherlands has been requested to share information about a series of transactions and related customers with a bank in Italy. Both banks are subject to European Union jurisdiction.
Which factor is the most important to consider before the Dutch bank shares the requested information with the Italian bank?
Question311: Transfers of money over the last 6 months to a corporation in a jurisdiction with strict secrecy laws triggered an alert. Which of the following should cause the most suspicion of money laundering?
Question312: How can a 'free-look provision' as part of a life insurance policy help criminals to launder money?
Question313: What are the rules imposed by the Office of Foreign Assets Control (OFAC) for legal entities and persons related to the US? (Select Two.)
Question314: Which method is used to launder money in casinos?
Question315: What action does the USA PATRIOT Act allow the US government to take regarding financial institutions (FIs) that are based outside of the US?
Question316: What do Financial Action Task Force (FATF)-style regional bodies do for their members to help combat money laundering and terrorist financing?
Question317: The Financial Action Task Force (FATF) routinely publishes a catalog of jurisdictions requiring enhanced monitoring, which is commonly called the:
Question318: Which of the following employee behaviors would not trigger an AML red flag?
Question319: Which are social/economic consequences of money laundering? (Choose two.)
Question320: What are the most effective measures that can be taken to boost risk appetite awareness across an organization after a Risk Appetite Statement (RAS) has been set and a risk appetite framework has been drafted? (Select Three.)
Question321: Sanctions screening requirements include that a financial institution should:
Question322: 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?
Question323: An AML analyst at a bank is investigating cases triggered by transaction monitoring alerts.
Which circumstances might cause the analyst to suspect a case involves terrorist financing? (Select Two.)
Question324: According to recommendations from the Financial Action Task Force, what role does a country's financial intelligence unit play in safeguarding against money laundering?
Question325: A compliance officer for a casino may suspect money laundering if an individual:
Question326: Which information must a United States financial institution retain for having foreign correspondent accounts as part of the USA PATRIOT Act record keeping requirements?
Question327: What is the currency threshold under the European Union Fourth Anti-Money Laundering Directive?
Question328: Which information should be gathered as part of enhanced due diligence (EDD) for a high-risk customer?
Question329: Which of the following is the financial stage of money laundering?
Question330: What action should a bank CEO's assistant take when the bank CEO expenses large sums of money to a charitable organization run by the bank CEO's direct family member?
Question331: Which are red-flag indicators of possible money laundering through online gambling? (Choose two.)
Question332: Which assessments are involved in the processes of mutual evaluation and follow-up by the FATF?
Question333: Which product type is subject to US extra-jurisdictional reach over non-US banks and non-US persons under the USA PATRIOT Act?
Question334: 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?
Question335: 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?
Question336: What is the most effective criterion for determining the beneficial ownership of funds?
Question337: A financial institution recently purchased anti-money laundering software. The software routinely generates more alerts than the anti-money laundering staff can properly analyze as a result of limited staffing. These alerts are generated by default software rules. Which of the following should the individual responsible for setting the anti-money laundering software parameters recommend?
Question338: 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.)
Question339: Which suspicious activity may be the strongest indicator of money laundering through a casino?
Question340: 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.)
Question341: Which of the following best describes the Basel Committee on Banking Supervision's principles on customer due diligence?
Question342: 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.)
Question343: A Financial Intelligence Unit (FIU) in a country has received a SAR involving significant suspicious fund transfers, not only within its jurisdiction but also in a foreign country. Further information is required from the foreign country to determine whether the matter needs to be referred for prosecution locally.
Which of the following statements is true in this scenario?
Question344: 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?
Question345: 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
Question346: An anti-money laundering specialist has just developed and implemented an anti-money laundering program. Which of the following is the best resource to evaluate the effectiveness of the program?
Question347: Which statement is the most accurate in describing who must comply with Office of Foreign Assets Control (OFAC) sanctions?
Question348: 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.
Question349: Which of the following competent authorities should directly receive suspicious or unusual transaction reports?
Question350: 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?
Question351: 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?
Question352: Which action by a prospective customer during the account opening process requires further investigation?
Question353: 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?
Question354: Which accurately describes the social and economic impacts of money laundering?
Question355: Before providing suspicious activity report documentation to an authorized requestor, the institution should first:
Question356: 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?
Question357: An agent of a wealthy individual from a high-risk country (as per the EU's high-risk jurisdictions list) approaches a notary in an EU country to dispose of assets recently acquired at an auction through an offshore company. The agent holds power of attorney from a law firm in another EU country. The transfer price is significantly lower than the auction price, but the agent refuses to explain the discrepancy.
Which red flags should the notary consider? (Select Two.)
Question358: 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.)
Question359: A recruitment manager in the human resources department of a bank has shortlisted a candidate for the position of relationship manager in its private banking division.
The bank's compliance policy requires proper background checks to protect against fraud and money laundering risks.
Which resources would be most useful for identifying potential negative information regarding the shortlisted candidate? (Select Three.)
Question360: 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.)
Question361: Financial Intelligence Units (FIUs) are responsible for:
Question362: Which are red flags indicating potential engagement of a bank employee in money laundering? (Select Two.)
Question363: Under the USA PATRIOT Act, in which scenario would the US not have jurisdiction?
Question364: A financial institution is designing an Enterprise-Wide Risk Assessment (EWRA).
According to the Wolfsberg Group's risk-based approach to AML, an effective EWRA should:
Question365: Which section of the USA PATRIOT Act relates to forfeiture of funds and allows for extraterritorial reach?