ACAMS TEST REVIEW (100% CORRECT) QUESTIONS & ANSWERS
Identify the seven topics of international incorporated into the FATF 40 recommendations in 2012? - A... [Show More] ML/CFT policies & procedures.
Money Laundering & confiscation.
Terrorist financing & financing of proliferation.
Financial & non-financial institution preventative measures.
Transparency & beneficial ownership of legal persons & arrangements.
Powers & responsibilities of competent authorities & other institutional measures.
International cooperation.
According to the Egmont Group, What is the definition of a Financial Intelligence Unit (FIU)? - A central, national agency responsible for receiving & permitted, requesting, analyzing & disseminating to the competent authorities, disclosures of financial information, Concerning suspected proceeds of crime & potential financing of terrorism, Required by national legislation or regulation in order to combat money laundering & terrorism financing.
According to the Wolfberg Anti-Money Laundering Principles for Private Banking in 2000, what are situations for private banking that require further due diligence? - Public official, including individuals holding, or having held, positions of public trust, as well as their families and close associates. High Risk Countries, including countries "identified by credible sources as having inadequate Anti-Money Laundering standards or representing high-risk for crime and corruption". High Risk Activities, involving clients and beneficial owners whose source of wealth "emanates from activities known to be susceptible to Money Laundering.
Describe 4 types of risk associated with money laundering faced by a financial institution? - Reputational Risk, is the potential that adverse publicity regarding an organizations business practices and associations, weather accurate or not, will cause a loss of public confidence in the integrity of the organization. Operational Risk is 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.
Describe the elements that should be addressed in a global approach to KYC identified in the Basel Committee's October 2004 paper called "Consolidated KYC Risk Management? - Risk Management.
Customer acceptance & identification policies.
Ongoing monitoring of higher risk accounts.
Identify, in general, who should approve policies and procedure? - In writing, & must be approved by appropriate levels of management. In general, institution-level policies should be approved by the board, while business unit procedures can be approved by business unit management.
Where does the ultimate responsibility for the AML compliance program rest with? - The board of directors. Members must set the tone from the top by openly voicing their commitment to the program, ensuring that their commitment flows through all service areas and lines of business, and holding responsible parties accountable for compliance.
Why is the Risk-Based approach more preferable then a prescriptive approach in the area of Anti-Money Laundering and Counter-Terrorism Financing? - Flexible, as Money Laundering & terrorist financing risk vary across jurisdictions, customers, products & delivery channels, & over time.
Effective, as companies are better equipped than legislators to effectively assess & mitigate the particular Money Laundering & terrorist financing risks they face.
Proportionate, because a risk=based approach promotes common sense & intelligent approach to fighting Money Laundering & terrorist financing as opposed to a "check the box" approach. It also allows firms to minimize the adverse impact of Anti-Money Laundering procedures on their Low-Risk customers.
What are the basic elements of financial institution's Anti-Money Laundering program? [Show Less]
