ACAMS Certification Questions and Answers 2023.
Describe the three phases of money laundering. - Correct answer-• Placement is the
physical disposal ... [Show More] of cash or other assets derived
from criminal activity.
• Layering is the separation of illicit proceeds from their source by
layers of financial transactions intended to conceal the origin of the
proceeds.
• Integration is supplying apparent legitimacy to illicit wealth
through the re‐entry of the funds into the economy in what appears
to be normal business or personal transactions.
What are the two main reasons correspondent
banking is vulnerable to money laundering? - Correct answer-• By their nature,
correspondent banking relationships create a
situation in which a financial institution carries out financial
transactions on behalf of customers of another institution. This
indirect relationship means that the correspondent bank provides
services for individuals or entities for which it has neither verified
the identities nor obtained any first‐hand knowledge, and
• The amount of money that flows through correspondent accounts
can pose a significant threat to financial institutions, as they process
large volumes of transactions for their customers' customers. This
makes it more difficult to identify the suspect transactions, as the
financial institution generally does not have the information on the
actual parties conducting the transaction to know whether they are
unusual.
Describe four types of risk associated with
money laundering faced by a financial institution. - Correct answer-• Reputational risk is
described as the potential that adverse publicity
regarding an organization's business practices and associations, whether
accurate or not, will cause a loss of public confidence in the integrity of the
organization.
• Operational risk is described as the potential for loss resulting from
inadequate internal processes, personnel or systems or from external
events.
• Legal risk is the potential for lawsuits, adverse judgments, unenforceable
contracts, fines and penalties generating losses, increased expenses for an
organization, or even the closure
of the organization.
• Concentration risk is the potential for loss resulting from
too much credit or loan exposure to one borrower or
group of borrowers.
Identify and describe the three sections of the USA Patriot
Act concerning due diligence U.S. financial institutions need
to perform for relationships with foreign correspondent
banking customers. - Correct answer-Section 312 requires institutions must set up risk
based due
diligence to mitigate the money laundering risks posed by foreign
financial institutions.
Section 313, which prohibits U.S. financial institutions from opening
or maintaining correspondent accounts for foreign shell banks and
requires them to take "reasonable steps" to ensure that a
correspondent account of a foreign bank is not being used indirectly
to provide banking services to a shell bank.
Section 319, which requires U.S. financial institutions to maintain
records with the names and address of the owners of foreign banks
for which they maintain correspondent accounts.
What are the economic effects of money laundering? - Correct answer-• Loss of control
of, or mistakes in, decisions regarding economic
policy,
• Economic distortion and instability,
• Loss of tax revenue,
• Risks to privatization efforts,
• Reputation risk for the country, and
• Social costs.
What is a concentration account? - Correct answer-Concentration accounts are internal
accounts established to
facilitate the processing and settlement of multiple or individual
customer transactions within the bank, usually on the same day.
These accounts are also known as special‐use, omnibus, settlement,
suspense, intraday, sweep or collection accounts. Concentration
accounts are frequently used to facilitate transactions for private
banking, trust and custody accounts, funds transfers and
international affiliates.
What is one of the most important aspects of
due diligence for a bank when establishing a
relationship with a money remitter? - Correct answer-Ensuring the money remitter is
properly licensed. [Show Less]
