ACAMS Test Review 202 Questions with Verified Answers
Identify the seven topics of international incorporated into the FATF 40 recommendations in
... [Show More] 2012? - CORRECT ANSWER AML/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)? - CORRECT ANSWER 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? - CORRECT ANSWER 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? - CORRECT ANSWER 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? - CORRECT ANSWER Risk Management.
Customer acceptance & identification policies.
Ongoing monitoring of higher risk accounts.
Identify, in general, who should approve policies and procedure? - CORRECT ANSWER 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? - CORRECT ANSWER 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? - CORRECT ANSWER 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? - CORRECT ANSWER A system of internal policies, procedures & controls.
A designated Compliance Officer with day-t0-day oversight over the AML Program.
An ongoing employee training program.
An independent audit function to test the AML Program.
How does the scope of the European Union's 3rd Money Laundering Directive differ from the 2nd Money Laundering Directive? - CORRECT ANSWER It specifically includes the category of trust and company service providers.
It covers all dealers trading in good trade in cash over 15,000 Euros.
The definition of financial institution includes certain insurance intermediaries.
How did the European Union's 2nd Directive on Prevention on the Use of the Financial System for the purpose of Money Laundering 2001 expand the scope of the 1st Directive? - CORRECT ANSWER Beyond Drug-Related crime. The definition of "Criminal Activity" was expanded to cover not just drug trafficking, but all serious crimes, including corruption & fraud against the financial interest of the European Community.
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.
Section 319- Which requires U.S. Financial institutions to maintain records with the names & address of the owners of foreign banks for which they maintain Correspondent Accounts.
According to the Basel Committee on Banking Supervision's paper entitled "Compliance and the Compliance Function in banks," What are the responsibilities of the Board Of Directors for Compliance? - CORRECT ANSWER Approve the Bank's Compliance Policy, including a formal document establishing a permanent & effective compliance function. At least once a year, the board or a committee of the board should assess the extent to which the bank is managing it's compliance risk effectively.
According to the Egmont Group's "Principle for information Exchange Between Financial Intelligence Units for Money Laundering and Terrorism Financing Cases," What are the permitted uses of information? - CORRECT ANSWER May be used only for the specific purpose for which the information was sought or provided. The requesting FIU may not transfer information shared by a disclosing FIU to a 3rd party, nor make use of the information in an administrative, investigative, prosecutorial, or judicial purpose without the prior consent of the FIU that disclosed the information.
According to the Wolfsberg Statement on AML Screening, Monitoring, ad Searching (2009), what are the most appropriate and effective overall monitoring frameworks? - CORRECT ANSWER A dedicated automated transaction monitoring system. System, generated exception reports. Manual "line of business" incident reports. Scheduled periodic reviews/sampling. Event, driven reviews (e.g., following issuance of new typologies)
According to the Basel Committee on Banking Supervision's paper entitled "Customer Due Diligence for Banks." How are sound KYC procedures relevant to the safely and soundness of banks? - CORRECT ANSWER They help to protect banks' reputation and the integrity of banking systems by reducing the likelihood of banks becoming a vehicle for a victim of financial crime and suffering consequential reputational damage. They constitute an essential part of Sound Risk Management. (e.g. by providing the basis for identifying, limiting and controlling risk exposures in assets and liabilities, including assets under management)
What is a country's extraterritorial reach? - CORRECT ANSWER The extension of one country's policies and laws to the citizens & institutions of another. U.S. Money Laundering laws contain several provisions that extend its prohibitions & sanctions into other countries. Ex., can apply to a Non-U.S. Citizen if the "conduct" occurs "in part" in the U.S.
Describe a Financial Intelligence Unit FIU? - CORRECT ANSWER A central governmental office that obtains information from financial reports, processes it & then discloses it to an appropriate government authority, include receiving, analyzing & disseminating information &, sometimes, investigating violations & prosecuting individuals indicated in the disclosures.
In 2009, FATF began to publicly identify high risk jurisdictions. What made the named jurisdictions high risk? - CORRECT ANSWER The named countries had strategic deficiencies in their AML/CFT regimes.
Identify several situations that may require a financial institution to initiate internal investigation? - CORRECT ANSWER A report of examination from the regulator. Information from 3rd parties, such as customers. Information derived from surveillance or monitoring systems. Information from employees or a company hotline. Receipt of a governmental subpoena or search warrant. Government investigators are asking questions of institution employees, business associates, customers or even competitors. The filing of a civil lawsuit against the institution or a customer of the institution.
According to the 1999 U.S. Customs "trade advisory" titled "The Black Market Peso Exchange," What are the 3 red flags as indicators of BMPE? - CORRECT ANSWER Payment made in cash by 3rd party with no connection to transaction. Payment made by wire transfers from 3rd parties unconnected to transaction. Payment made with checks, bank drafts or money order not drawn on the account of the purchaser.
How should a financial institution monitor the receipt of a subpoena, summons, or other government request? - CORRECT ANSWER Institution should do more than just produce the records of information being sought. Ensure that is reviewed by senior management, an investigations group or counsel to determine how best to respond to the inquiry and to determine if the inquiry or the underlying activity might pose a risk to the institution. This will also assist with regard to the institution's own internal investigation
What is a concentration account? - CORRECT ANSWER Internal account established to facilitate the processing and settlements of multiple or individual customer transactions within the bank, usually on the same day. (Special-Use, Omnibus, Settlement, Suspense, Intraday, Sweep or Collection Accounts.) Are frequently used to facilitate transactions for private banking, trust & custody accounts, funds transfers & international affiliates.
What characteristics of the charities or Non-Profit Organizations make them particularly vulnerable to misuse for terrorist financing? - CORRECT ANSWER Enjoying the public trust. Having access to considerable sources of funds. Being Cash-Intensive. Frequently having a global presence, exposed to terrorist activity. Little or no regulations and/or having few obstacles to their creation.
How does having a lawyer as a trustee on an account at a financial institutions create vulnerabilities to Money Laundering at an institution? - CORRECT ANSWER This enables lawyers to conduct transactions & to administer the affairs of a client. Sometimes, the illicit money is placed in a law firm's general trust account in a file set up in the same of the client, a nominee, or a company controlled by the client.
What is the significance of a trust account, whether offshore or onshore, in the context of Money Laundering? - CORRECT ANSWER Cannot be understated: It can be used as part of the 1st step in converting illicit cash into less suspicious assets, it can help hid criminal ownership of funds or other assets; and it is often an essential link between different Money Laundering vehicles and techniques, such as real estate, shell and active companies, nominees and the deposit & transfer of criminal proceeds.
How can are and antiques dealers and auctioneers mitigate their Money Laundering risks? - CORRECT ANSWER Require all art vendors to provide names & addresses. Ask that they sign form. Verify the identities and addresses. If there is believe an item might be stole, contact the Art Loss Register private database of stolen art. Look critically when a customer asks to pay in cash. Be aware of Money Laundering regulations. Appoint a senior staff member to whom employees can report suspicious activities.
Describe a Ponzi Scheme? - CORRECT ANSWER A Money Laundering system named after Charles Ponzi, and Italian immigrant who spent 10 years in jail in the U.S. for a scheme that defrauded 40,000 people out of $15,000,000. The use of new investors' money to pay off prior investors. Involve fake, Non-Existent investment schemes in which the investors are tricked into investing on the promise of unusually attractive returns.
What is the broad objective of the UNODC model legislation on Money Laundering and financing of terrorism? - CORRECT ANSWER Global Programme is to strengthen the ability of Member States to implement Measures against Money-Laundering and the financing of terrorism and to assist them in detecting, seizing and confiscating illicit proceeds, as required pursuant to United Nations instruments and other globally accepted standards, by providing relevant and appropriate technical assistance upon request
What are the 7 elements of a Sound Customer Due Diligence CDD program? - CORRECT ANSWER Full ID of customer and business entities, Including source of funds. Development of transaction & activity profiles of each customer's anticipated activity. Definition & acceptance of the customer in the context of specific products & services. Assessment & transaction monitoring based on the risks presented. Investigation & examination of unusual customer or account activity. Documentation of findings
What steps should the independent audit take to evaluate the bank's ability to identify unusual activity? - CORRECT ANSWER Reviewing policies, procedures, and processes for suspicious activity monitoring. Evaluating the system's methodology for activity or filtering criteria. Evaluating the system's to generate monitoring reports. Determining whether the system's filtering criteria are reasonable
How can senior management show its commitment to compliance with Anti-Money Laundering laws and regulations? - CORRECT ANSWER Establishing a strong compliance plan that is approved by board of directors & and is fully implemented.
Insisting that it be kept informed of compliance efforts, audit reports & any compliance failures, with corrective measures instituted.
Communicating compliance expectations to the institution personnel.
Including regulatory compliance within the job descriptions and job performance evaluations of institution personnel.
Implementing procedures, processes & controls to ensure compliance with the AML program. Conditioning employment on regulatory compliance
Identify the factors a prosecutor many consider when determining whether or not to bring a case against an institution involving Money Laundering-Related Charges? - CORRECT ANSWER The institution has a criminal history.
The institution has cooperated with the investigation.
The institution discovered & self-reported the Money Laundering-related issues.
The institution has had a comprehensive & effective AML program.
The institution has taken timely and effective remedial action.
There are civil remedies available that can serve as punishment.
Deterring wrongdoing by others is need and will be served by prosecution.
Identify several types of internal reports financial institutions may use to discover Money-Laundering and terrorist financing? - CORRECT ANSWER Daily cash activity in excess of the country's reporting threshold.
Daily cash activity just below the country's reporting threshold.
Cash activity aggregate over a period of time (e.g., individual transactions over a certain amount, or totaling more than a certain amount over a 30 day period) to identify possible structuring.
Wire transfer reports/logs (with filters using amount and geographical factors)
Money instrument logs/reports
Check kiting/ drawing on uncollected funds (significant debit/credit flows).
Significant change reports.
New account activity reports.
How can the early redemption method on insurance policies be used to launder money? - CORRECT ANSWER Policyholder is more interested in the cancellation terms of a policy than the benefits of the policy. The launderer buys a policy with illicit money & then tells the insurance company that he has changed his mind & does not need the policy. After paying a penalty, the launderer redeems the policy & receives a clean check from a respected insurer
What is 1 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
What factors may contribute to the vulnerabilities of Private Banking with regard to Money Laundering? - CORRECT ANSWER Perceived High Profitability.
Intense competition.
Powerful clientele.
The high level of confidentiality associated with Private Banking.
The close relationship of trust developed between relationship managers & their clients.
Commission-Based Compensation for relationship managers.
A culture of secrecy & discretion developed by the relationship managers for their clients.
The relationship managers becoming client advocates to protect their clients.
What are the 2 main reasons Correspondent Banking is vulnerable to Money Laundering? - CORRECT ANSWER Correspondent Banking relationships create a situation in which a financial institution catties 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.
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 the 3 phases of Money Laundering? - CORRECT ANSWER Placement- The physical disposal of cash or other assets derived form criminal activity.
Layering- Separation of illicit proceeds from their source by layers of financial transactions intended to conceal the origin of the proceeds.
Integration- Re-Entry of the funds into the economy in what appears to be normal business or personal transactions.
If an institutions decides to file an STR, What should they do as soon as possible? - CORRECT ANSWER Notify the investigators or prosecutors
What type of documents would a financial institution have could assist a financial investigator in tracking money movements? - CORRECT ANSWER Through a bank, a broker-dealer, Money Services Business or Casino. Ex. banks maintain signature cards, which are collected a t eh opening of an account, account statements, deposit tickets, checks and withdrawal items & credit & debit memorandums. Banks also keep records on loans, cashier's checks, certified checks, traveler's checks & money orders. They exchange currency, cash 3rd-Party checks, & conduct wire transfers, as do most Money Service Businesses. Banks also keep safe deposit boxes & issue credit cards
Describe a typical suspicious or unusual transaction reporting process within a financial institution? - CORRECT ANSWER Procedures to identify potential suspicious transactions.
A formal evaluation of each instance, & continuation of unusual transactions.
Documentation of the suspicious transaction reporting decision, whether or not filed with the authorities.
Procedures to periodically notify senior management or the board of directors of suspicious transaction filings.
Employee training on detecting suspicious transactions.
ABC Bank was served with a subpoena compelling the production of certain documents on a personal checking account. Describe the steps the bank should consider taking upon receipt of the subpoena? - CORRECT ANSWER The institution should have its senior management and/or counsel review the summons or subpoena. If there are no grounds for contesting the summons or subpoena, the institution should take all appropriate measures to comply with the summons or subpoena on a timely & complete basis. Failure to do so can result in adverse action & penalties for the institution. Also, the financial institution should not notify the customer who is being investigated. If the government asks the bank to keep certain accounts open, such a request should be obtained in writing under proper letterhead & authority form the government
Identify the 4 ways that good technology can equip organizations with improved defenses in the fight against financial crime? - CORRECT ANSWER Transaction Monitoring- Scanning & analyzing data for potential Money Laundering activity.
Watch list filtering- Screening new accounts, existing customers, beneficiaries & transaction counterparties against terrorist, criminal & other blocked persons watch lists.
Automation of regulatory reporting- Filing Suspicious Transaction Reports STR's, Currency Transaction Reports CTR's, or other regulatory reports with the government.
A detailed audit trail- Demonstrates compliance efforts to regulators.
Identify the 3 GateWays that assist with the AML cooperation between countries? - CORRECT ANSWER Mutual Legal Assistance Treaties
Financial Intelligence Units FIU
The Supervisory Channel
What is Memorandum Of Understanding MOU? - CORRECT ANSWER An agreement between 2 parties establishing a set of principles that govern their relationship on a particular matter. Is often used by counties to govern their sharing of assets in international asset-forfeiture cases or to set our their respective duties in Anti-Money Laundering initiatives. Financial Intelligence Units FIU's with the task of receiving & analyzing Suspicious Transaction Reports STR's on an ongoing basis & maintaining close links with police & customs authorities, share information among themselves informally in the context of investigations, usually on the basis of MOU. The Egmont Group of FIU's has established a model for such MOU's. Unlike the Mutual Legal Assistance Treaty, tis gateway is ordinarily used not for obtaining evidence, but for obtaining intelligence that might lead to evidence
Describe Know Your Customer KYC? - CORRECT ANSWER Refers to Anti-Money Laundering policies & procedures used to determine the true identity of a customer & the type of activity that is "normal & expected", & to detect activity that is "unusual" for a particular customer. Many experts believe that a sound KYC program is 1 of the best tools in an effective Anti-Money Laundering program
What is a Mutual legal Assistance Treaty MLAT? - CORRECT ANSWER An agreement among countries allowing the Mutual Assistance in legal proceedings & access to documents & witnesses & other legal & judicial resources in the respective countries, in private & public sectors, for use in official investigations & prosecutions
What is an International Business Company IBC? - CORRECT ANSWER A variety of offshore corporate structures, alternated called "Exempt Companies," Which are dedicated to business use outside the incorporating jurisdiction, rapid formation, secrecy, broad powers, low cost, low to zero taxation, & minimal filing & reporting requirements
Describe a Cross-Border Transfer? - CORRECT ANSWER Any Wire Transfer in which the originator & beneficiary institutions are located in different jurisdictions. Also refers to any chain of wire transfers that has a leas 1 Cross-Border element
In maintaining & auditing your compliance program, each formal assessment should consider which of the following? - CORRECT ANSWER Are employees being trained adequately?
Do the internal compliance procedures match those required in your jurisdiction?
Are employees using the procedures as required?
Are the proper procedures in place?
According to FATF Recommendations, countries should? - CORRECT ANSWER Render Mutual Legal Assistance, Notwithstanding the absence of dual criminality.
Where dual criminality is required consider the required, consider the requirement satisfied for all like categorized & denominated offenses.
Provisions of the Patriot Act include? - CORRECT ANSWER US Institution cannot maintain correspondent accounts with foreign shell banks.
Foreign banks file rigorous information disclosure duties to their US correspondents.
US institutions must review "certificate" information for completeness and accuracy.
US institutions take "reasonable steps" to ensure that correspondent accounts provided to foreign banks are not being used to provide banking services indirectly for foreign shell banks.
US institutions maintain the name and address of an agent in the US designated to accept service of legal process for the foreign bank's records regarding the correspondent account.
US Secretary and Attorney General have the authority to issue a summons or subpoena to any foreign bank that maintains a corresponded account in the US and the request records relating to that account even if maintained outside US borders.
Money Laundering red flags include? - CORRECT ANSWER Unusually high monthly balances in comparison to know sources of income.
Multiple deposits made under reportable thresholds.
The timing of deposits.
Unusually large deposits, deposits in round numbers, or deposits in repeated amounts that are not attributable to legitimate sources on income.
A lack of account activity.
Checks written in unusually large amounts (in relation to the suspect's known practice)
Due to hard lessons learned in recent years, which of the following would be appropriate in guarding against "the enemy within? - CORRECT ANSWER Periodic fingerprint employee.
Background check for promotion.
Background screening for new hire.
Credit checks.
Check terrorist "watch list".
Verification of SSN, education and employment.
Which of the following can be components of Enhanced Due Diligence? - CORRECT ANSWER Business operations; financial statements major customers & suppliers.
Location of business.
Anticipated transaction activity.
Purpose of the account, owners, occupation, source of funds, source of wealth.
According to the FATF Recommendations, countries should? - CORRECT ANSWER Render mutual legal assistance, notwithstanding the absence of dual criminality.
Where dual criminality is required consider the required, consider the requirement satisfied for all like categorized & denominated offenses.
A "Payable-Through Account" PTA is a master correspondent account established at a domestic bank by a foreign bank. The Home-Country Customers of the foreign bank, which is called the "Master Accountholder" are permitted to conduct a wide range of banking transactions through the PTA typically those customers, called "sub-accountholders", can write checks make deposits & withdrawals, & wire funds through the PTA almost as if they were direct, local customers of the US bank. The sub-accountholders, who can number in the hundreds & who rarely have direct contact with the domestic US banks, are given checks by which to draw funds on the PTA. In 1 US case the regulator found that the domestic bank had failed to adequately supervise the PTAs. To implement effective internal control & operating systems concerning PTAs, to establish "Know Your Customer" procedures for Sub-Accountholders & to maintain adequate staffing. The regulator ordered the bank to take 15 "affirmative action" steps before it could accept any new PTAs Among those steps were? - CORRECT ANSWER Preparing a "Risk Assessment" about each PTA.
Obtaining a signed document from each Sub-Accountholder subjecting the subaccount to state & federal laws & regulations in spite of any banking secrecy laws of any other jurisdiction.
Preparing a "PTA Action Plan" that examiners the adequacy of its capabilities to monitor PTAs & plans to improve them.
Obtaining detailed information from the master account holder about the way it is supervised by its home country agencies.
Conducting periodic verification of the information provided by the foreign bank.
Developing a policy regarding termination of PRA accounts where information it receives is materially inaccurate or incomplete.
To assure that you AML compliance program provides adequate training, what types of training & to which groups should it be available? - CORRECT ANSWER Investigation & monitoring staff.
Senior management, including the Board of Directors.
Remedially, as needed.
Audit & compliance staff.
New hire training.
Routine refresher training.
New hires.
One of the steps in developing an AML programs is the assessing of risk. Which of the following banking functions are considered high risk? - CORRECT ANSWER Letter of Credit.
Payable-Through Accounts PTAs.
Official Bank Checks.
Private Banking.
Wire Transfer Services.
Check Cashing for Non-Customers.
Which of the following is true about FIUs? - CORRECT ANSWER FIU's offer an official gateway for communication between themselves & other bodies set up the fight Money Laundering & other financial crimes.
FIU are authorized to investigate Money Laundering crime.
FIU share information amongst themselves informally in the context of investigations, usually on the basis of Memoranda Of Understanding MOU.
FIU have the task of receiving & analyzing suspicious transaction reports & maintaining close links with police & customs officials.
This gateway is not normally used to obtaining evidence, but for obtaining intelligence that might lead to evidence.
Based on the section as it originally appears in the USA Patriot Act, the purpose of the Section 314 is to? - CORRECT ANSWER Encourage regulatory & law enforcement authorities to share with & inquire of financial institutions information regarding individuals, entities, & organizations engaged in, or reasonable suspected based on credible evidence, of engaging in terrorist acts or Money Laundering activities.
Elements of a sound KYC program include? - CORRECT ANSWER Investigation & examination of unusual customer or account activity.
Staff training.
Definition & acceptance of customer in context of institutions' products & services.
Assessment & grading of risk that the customer or account presents.
Appropriate internal & external reporting.
Documentation of findings.
Full identification & verification of customer & business entities.
Development of transaction & activity profiles of the customer's anticipated activity.
Account & transaction & activity profiles of the customer's anticipated activity.
Auditing of the KYC program.
Full identification & verification & verification of sources of funds & wealth.
Directive 2001/97/EC broadened the? - CORRECT ANSWER Definition of financial institutions to include insurance companies, money transmitters, currency exchanges & investment firms.
Definition of Money Laundering & the associated predicate offenses.
Coverage of the directive to include real estate real estate agents, external auditors, accountants & tax advisors, & lawyers when planning or executing real estate transactions or money movement on behalf of their clients.
Coverage of the Directive to include art dealers, auctioneers & other dealers in High-Value goods when payment in cash exceeds 15,000 Euros.
IBC stands for "International Business Company" -a term used to define a variety of offshore corporate structures, also exempt companies. Which of the following are common characteristics of IBCs? - CORRECT ANSWER Dedication to business use outside the incorporation jurisdiction.
Rapid formation & low cost.
Minimal filing & reporting requirements.
Examples of Ponzi schemes include? - CORRECT ANSWER The prime bank guaranty program.
High yield promises.
Bank debenture program.
Roll program.
There are many online banking products & features that make them attractive to the Money Launderer. Among them which of the following? - CORRECT ANSWER The speed, security & anonymity of internet payment systems.
Lack of clear policies for record retention in the E-Commerce environment.
The volume of electronic payment in E-Space.
The Cross-Border nature of the internet.
Money Laundering laws rely on a geographic presence for jurisdiction.
In E-Space, there are no clear supervisory, regulatory, enforcement or prosecutorial powers.
Difficulties in KYC Enhanced Due Diligence EDD, customer & 3rd-Party identification.
Which of the following would be true in an AML program? - CORRECT ANSWER The Board has the ultimate responsibility of the program, must openly voice their commitment to the program, & ensure their commitment flows through the entire organization.
The Board Should be responsible for the oversight of the program.
The Board should routinely converse with regulators & auditors about their commitment to the program, their understanding of the law, & knowledge of how their institution operates.
The Board is responsible for ensuring that corrective action is taken for all program shortcomings identified by regulator or auditor examination.
Which of the following is the most common method of laundering money through a legal money services business? - CORRECT ANSWER Purchasing structured money instruments.
In general, the 3 phases of Money Laundering are said to be? - CORRECT ANSWER Placement
Layering
Integration
What is Bust-Out Schemes? - CORRECT ANSWER Are popular in creating large bankruptcy frauds where businesses secure increasing loans in excess of the actual value of the company or property & then run with the money. Leaving the lender to foreclose & take a substantial loss.
Which 2 activities are typically associated with the Black Markey Peso Exchange BMPE Money Laundering system? - CORRECT ANSWER Converting illicit drug proceeds from dollars or Euros to Colombian Pesos.
Facilitating purchases by Colombian importers of goods manufactured in the US or Europe through peso brokers.
What is the Right of Reciprocity in the field of in the field of international cooperation against Money Laundering? - CORRECT ANSWER A rule in the law of a country allowing its authorities to cooperate with authorities of other countries to the degree that their law allows them to do the same.
The greatest risk for Money Laundering is for casinos that? - CORRECT ANSWER Allow customers with credit balances to withdraw funds by check in another jurisdiction.
Which statement is true regarding the risk of Politically Exposed Persons PEPs? - CORRECT ANSWER PEP's have significantly greater exposure to the politically corrupt funds, including accepting bribes or misappropriating government funds.
Dirty money, derived from criminal activities of Belgian Criminal A, is sent to a foreign bank account of Corporation B. Then in Belgium, a new investment Company C is incorporated. Criminal A is appointed as a director of Company C. Company C borrows money from the foreign Company B & buys real estate in Belgium. The real estate is rented to 3rd Parties. Director (Criminal) A also rents an apartment in the building. With the funds generated by the rent, Company C pays off the loan to Corporation B, & the salary of Director A. Criminal A now converted his dirty money in legal funds. This Laundering method is commonly referred to as what? - CORRECT ANSWER Loan Bank
A new customer approaches a bank to open a commercial account. The customer provides an address for the account located across the City from the branch. When asked by the account representative if the customer requires any additional banking services, the customer responds she is also interested in opening a personal investment account. The account representative refers the customer to their broke-dealer. The customer tells the firm representative she has never had a brokerage account before & has a few questions about how an investment account works. The customers asks how deposits can be made into her account, if there are any reporting requirements, & how to go about moving balances out of the account using wire transfers. No questions are asked about fees associated with these transactions. Which 3 items would be considered suspicious? - CORRECT ANSWER The Customer asks many questions about the brokerage account, but non of them are related to investing.
The address of the account holder & the branch where the customer came to open the account are not close to each other.
That the customer appears unconcerned about the fees.
International trade in goods & services can be used as either a cover for Money Laundering or as the Laundering mechanism itself. What is MOST important for the launderer when engaging in this method? the ability? - CORRECT ANSWER To Over-Or Under-Invoice the goods.
Which of the following statements is true? Correspondent Banking is MOST vulnerable to Money Laundering when the correspondent account is? - CORRECT ANSWER Maintained for a foreign bank that does not have a physical presence in any country. [Show Less]