A financial institution receives a regulatory enforcement action because of deficiencies in its anti-money
Which action should the board of directors take?
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?
Under which two circumstances may law enforcement be given access to a financial institution customer’s
financial records? (Choose two.)
On who does the ultimate responsibility for an institution’s anti-money laundering program rest?
Which three circumstances are indicators for defining a customer as required additional diligence according to the Wolfsberg Principles on Private Banking? Choose 3 answers
With which person(s) should an anti-money laundering officer coordinate when implementing a new hire screening program?
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.)
What are the European Union Directives on Money Laundering?
"The first European Union Directive, “Prevention of the Use of the Financial System for the Purpose of Money Laundering (Directive 91/308/EEC),” was adopted by the Council of the European Communities in June 1991. Like all directives adopted by the Council, it required member states to achieve (by amending national law, if necessary) the specified results. This First Directive required the members to enact legislation to prevent their domestic financial systems from being used for money laundering"
Which information must a United States financial institution retain for having foreign correspondent accounts as part of the USA PATRIOT Act record keeping requirements?
Which insurance product is particularly vulnerable to money laundering?
The Wolfsberg Principles for Private Banking list circumstances that would require additional due diligence, including activities that involve which three of these choices?
A suspicious transaction report has been filed on an account owned by the wife of the bank's Chief Executive Officer. Which of the following is the most important consideration when deciding whether to recommend closing the account?
What does designing a country as being of “prime money laundering concern” allow the U.S. government to do?
A financial institution files a suspicious transaction report on a customer as the result of a high volume of large currency deposits to pay off a loan. A law enforcement officer calls the anti-money laundering officer to discuss the suspicious transaction report. Which of the following is the anti-money laundering officer legally permitted to do?
1. Discuss any aspects of the reported activity.
2. Provide copies of the customer's loan documents.
3. Explain the customer's loan payment history.
4. Send the deposit documents referenced in the suspicious transaction report.
What indicates potential money laundering activity by a lawyer?
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?
Which factor should a financial institution (FI) consider prior to sharing customer records within the same jurisdiction?
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?
What is a key risk associated with Correspondent Accounts according to the Basel Customer Due Diligence paper?
https://www.bis.org/publ/bcbs85.pdf - page 12
Banks should gather sufficient information about their respondent banks to understand fully the nature of the respondent’s business. Factors to consider include: information about the respondent bank’s management, major business activities, where they are located and its money-laundering prevention and detection efforts; the purpose of the account; the identity of any third party entities that will use the correspondent banking services; and the condition of bank regulation and supervision in the respondent’s country. Banks should only establish correspondent relationships with foreign banks that are effectively supervised by the relevant authorities. For their part, respondent banks should have effective customer acceptance and KYC policies.
To what extent should senior management and the Board of Directors be involved in the filing of any STR?
How should a financial institution deter money laundering through new accounts? Choose 3 answers
A bank is preparing for its anti-money laundering independent review, which is performed every two years
under the direction of the compliance officer. The bank’s corporate audit department will conduct the review.
The compliance officer will review the final report before it is released to the Board of Directors.
What is the issue with this situation?
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?
Review of any AML/CFT program begins with the Risk Based Approached. It should first check the internal system to identify risk factors and design program accordingly.
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?
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?
The decision of whether or not to file a suspicious transaction report (also known as a suspicious activity report or SAR in the United States) often involves weighing the aggravating and mitigating factors arising from the research conducted during the investigative process. The final decision should be documented and supported by the reasoning that was used to make the determination. The transaction has already been investigated which led to the requesting of the document. The document checked out and the question did not specify the document was suspicious, therefore we can conclude an STR does not need to be completed and thus should move to document the reason why an STR wasn't completed.
The ultimate goal of economic sanctions is to:
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?
To ensure that an institution’s anti-money laundering program is current, which step should be taken?
"Provide for periodic review as well as timely updates to implement changes in regulations this should be done at least on an annual basis" (Pag 153)
An anti-money laundering specialist has been asked to establish a compliance program to detect and prevent money laundering and terrorist financing. Which of the following should the anti-money laundering specialist consider in developing the program?
1. Funds for money laundering and terrorist financing are derived from illegal sources.
2. Related practices are used to conceal the nature of the funds.
3. The source and disposition of funds are similar.
4. Similar techniques are used to move funds.
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?
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)?
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.)
What was cited by the Wolfsberg Group in its Statement on the Suppression of the Financing of Terrorism as being vulnerable to terrorist financing?
What is the currency threshold under the European Union Fourth Anti-Money Laundering Directive?
Why do organized crime groups often use front companies? (Choose two).
A bank maintains a number of United States (U.S.) dollar correspondent accounts for foreign financial institutions. Upon a routine review of a U.S. dollar correspondent account owned by Foreign Bank A, a number of transactions appear to have been originated by Foreign Bank B outside the expected activity for this account. These transactions appear suspicious and a suspicious transaction report was filed by the compliance officer.
Which step should the compliance officer take?
What poses the greatest money laundering risk for a financial institution offering on-line services to customers?
Which two methods have terrorist groups used to diversify their revenue stream and to fund their operations?
Art and Antiquities: Conduits for Money Laundering and Terrorist Financing
Why Fight the Antiquities Trade?
More recently, groups like Daesh (Islamic State [IS]), al-Qaida, the Taliban and their affiliates have been engaged in ****cultural racketeering and terrorism in Iraq, Syria, Yemen, Afghanistan and elsewhere, converting patrimony into cash for weapons and troops****.
As Terrorists Diversify Fundraising Tactics, Greater Efforts Needed to Shut Down Illicit Channels, Secretary-General Tells Finance Ministers’ Meeting
Terrorists continue to adapt their tactics and diversify their funding sources. Today, Da’esh runs a multi-million-dollar economy in territories under its control. Da’esh terrorists raise money through the oil trade, extortion, undetected cash couriers, kidnapping for ransom, trafficking of humans and arms and racketeering. They loot and sell precious cultural property, shamelessly profiting from the destruction of humanity’s common heritage.
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?
How can violations of anti-money laundering laws be a risk to individuals?
Which unusual or suspicious activity by a financial institution's (FI's) employee requires additional investigation and scrutiny?
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?
"'Wash trading' through multiple accounts generates offsetting profits and losses and transfers of positions between accounts that do not appear to be commonly controlled"
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?
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
What is a method of placement that can be used by a money launderer in a deposit taking institution?
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?
An organization’s automated surveillance system identifies large fluctuations in customer activity. As a result of
an audit, the compliance officer is informed that the system is not generating alerts when activity is
consistently abnormal over a long period of time. Currently the organization is evaluating new alert scenarios
in an attempt to address this problem.
Which type of scenario is helpful in mitigating this weakness?
Outgoing foreign transactions of similar amounts trigger a monitoring alert for a customer's accounts. During the evaluation of the accounts, the bank discovers the wire transfers were very small amounts and occurred within the last 3 months following a long period of inactivity. The wire transfers appear to originate from legal sources. To assess the potential of terrorist financing, the institution must ensure the