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NEW QUESTION 58
In the FATF 40 recommendations, the focus of AML efforts has been expanded beyond Financial Institutions. Which three businesses and/or professions are covered? Choose 3 answers
- A. Real estate agents when they are involved in transactions for clients concerning buying andselling properties
- B. Dealers in art, when they engage in any cash transaction with a customer at or above adesignated threshold
- C. Trust and company service providers
- D. casinos, when customers engage in financial transactions equal to or above a designated Threshold
Answer: A,B,C
NEW QUESTION 59
A company service provider in Country A sets up a corporate structure for a client from Country B, which is known for corruption. The corporate structure includes a holding company in Country A with a bank account in one of the international banks located there.
During on-boarding, the client's wealth was estimated at $7 million. Shortly thereafter, the client's father became president of Country B. During a routine client review two years later, it was identified that client's wealth had grown to $510 million.
What are two red flags that indicate money laundering or financial terrorism? (Choose two.)
- A. The holding company is in Country A with a bank account in one of the international banks.
- B. The substantial growth in wealth during a short period of time.
- C. The client is from a country known for corruption.
- D. The client is a family member of a PEP from a country known for corruption.
Answer: B,D
NEW QUESTION 60
A government has instituted a new anti-money laundering laws which require all financial institutions to obtain certain information from its customers.
Which step should an institution located in this jurisdiction take to ensure compliance?
- A. Change systems to ensure the required information is automatically obtained from all customers
- B. Change procedures to require that the necessary information is obtained
- C. Send a notice to customers asking them to provide the necessary information
- D. Change procedures and systems as necessary and provide employee training
Answer: C
NEW QUESTION 61
When a bank performs a risk assessment, what areas should an institution focus on?
- A. The geographic locations where the institution does business
- B. The amount of the money the institution earns prior to taxes
- C. The type and location of the institution's clients
- D. The nature and breadth of the services and products the institution provides
Answer: A,C,D
NEW QUESTION 62
After an institution files an STR with regard to a particular account, a law enforcement agent requests the institution to keep the account open until advised otherwise by law enforcement.
What steps should the institution take?
- A. The institution should close the account in order not to be caught in the middle of a law enforcement investigation
- B. The institution should request a written letter from the law enforcement (agency signed by an appropriate authorized signature)
- C. The institution should keep the account open only if doing so comports with the bank's own AML procedures
- D. The institution should follow the request of the law enforcement agent and keep the account open
Answer: B
NEW QUESTION 63
Which is the first valid step in the Mutual Legal Assistance Treaties (MLAT) international cooperation process?
- A. The central authority of the requesting country sends a commission letter of request to the central authority of the other country.
- B. The central authority that receives the request sends it to a local judicial officer to find out if the information is available.
- C. The investigator may remove the evidence collected without asking permission to do so.
- D. An investigator from the requesting country visits the country where the information is sought and takes statements from the identified witnesses or suspects.
Answer: A
NEW QUESTION 64
In 2004, Consolidated KYC Risk Management was issued by the Basel Committee on Banking Supervision (BCBS). What is a key message in this document?
- A. KYC Risk Management required a yearly consolidation effort
- B. KYC Risk Management means as established decentralized process for promulgating policies and procedures
- C. Consolidated KYC risk management for a group is critical and trumps jurisdictional rules hat limit information sharing
- D. Policies and procedures should be designed not merely to comply strictly with all relevant laws and regulations
Answer: D
NEW QUESTION 65
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?
- A. File a report with the appropriate tax authorities in the jurisdictions of Foreign Bank A and Foreign Bank B
- B. Notify Foreign Bank A of the discovery and seek documentation supporting Foreign Bank A was collusive and a willing partner with Foreign Bank B in the activity
- C. Notify senior management of the money laundering risks by allowing Foreign Bank A to maintain its U.S. dollar correspondent account
- D. Notify other U.S. financial institutions who maintain U.S. dollar correspondent accounts for Foreign Bank A and Foreign Bank B in an effort to shut down the activity
Answer: B
NEW QUESTION 66
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?
- A. Monitor the customer's account.
- B. Contact the institution's legal advisor.
- C. File a suspicious transaction report with the competent authority.
- D. Perform enhanced due diligence.
Answer: D
NEW QUESTION 67
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?
- A. The fact that the account holder is well known to the bank staff
- B. The recent change in the timing of deposits and withdrawals in the account
- C. The fact that the customer has lived in the area and has banked at this bank for 25 years
- D. The customer's work history and the amount of his monthly retirement check
Answer: D
NEW QUESTION 68
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.)
- A. Exchanging information between national law enforcement agencies
- B. Submitting only formal requests for information to a financial intelligence unit
- C. Contacting the potential suspect or their family members to request information
- D. Contacting existing liaison officers in the foreign jurisdiction
Answer: A,D
NEW QUESTION 69
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?
- A. The total credit exposure for non-cooperative countries and territories
- B. Results of related audits and examinations
- C. Notification of management changes in the different major divisions
- D. Details on inquires received from law enforcement
Answer: D
NEW QUESTION 70
What are two sources for maintaining up-to-date sanctions information? (Choose two.)
- A. U.S. Department of the Treasury Office of Foreign Assets Control
- B. U.S. Department of the Treasury - Section 311 - Special Measures
- C. Financial Action Task Force's list of High Risk and Non-Cooperative Jurisdictions
- D. U.S. Federal Bureau of Investigation's National Security Letters
Answer: A,B
NEW QUESTION 71
How can a financial institution verify the nature and purpose of a business and its legitimacy?
- A. By reviewing the company's website
- B. By using an independent information verification process, such as by accessing public and private databases
- C. By reviewing a copy of the corporation's latest audited reports and accounts
- D. By undertaking a company search or other commercial inquires to see that the institution has not been, or is not in the process of being dissolved of terminated
Answer: B
NEW QUESTION 72
What are two reasons physical certificates present a money laundering risk to broker-dealers? (Choose two.)
- A. Physical certificates may be provided to nominees for deposit or settled in off-market transactions
- B. The trade information on a physical certificate can be easily altered
- C. Physical certificates do not expire and may be held by the owner for perpetuity
- D. There is little information readily available to the broker confirming the source of the funds
Answer: A,D
NEW QUESTION 73
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?
- A. Flag filters with no history of generating an alert for removal
- B. Calibrate parameters based on staffing capabilities to clear alerts
- C. Review parameter settings based on the latest risk assessment
- D. Compare settings to organizations within its peer group
Answer: C
NEW QUESTION 74
A national Financial Intelligence Unit, which is responsible for receiving, analyzing and disseminating disclosure of financial information, should consider becoming a member of what organization?
- A. The Basel Committee
- B. The Financial Action Task Force
- C. The Wolfsberg Group
- D. The Egmont Group
Answer: D
NEW QUESTION 75
Which of the following represents the first Financial Action Task Force initiative?
- A. The Special Recommendations on Terrorist Financing
- B. The 40 Recommendations on Money Laundering
- C. The Report on Non-Cooperative Countries and Territories
- D. The Report on Money Laundering Typologies
Answer: A
NEW QUESTION 76
An anti-money laundering officer is conducting employee reviews.
Which employee action warrants enhanced due diligence?
- A. The private banker has recently taken long vacations which caused staff members to fall behind in their work to help cover bank duties.
- B. The branch manager reviews the daily hold report and releases holds on non-cash items once the bank receives credit from the paying bank.
- C. The bank chief executive officer lives in a lavish home and has requested the board to approve a membership payment at an exclusive country club.
- D. The teller reviews customer profiles and makes notations of personal information to reportedly become familiar with bank customers.
Answer: B
NEW QUESTION 77
What are three factors a financial institution should examine with regard to a new customer who is opening up a new account? Choose 3 answers
- A. The legal structure of the customer's business
- B. The country or location where the customer is from or does business
- C. The previous financial institutions where the customer has banked
- D. The type and size of the business the customer runs
Answer: A,C,D
NEW QUESTION 78
In addition to monitoring for suspicious activity, what are electronic monitoring systems also valuable for?
- A. Proving to the Board of Directors that the FIU is doing its job
- B. Highlighting the skills of the system analysts
- C. Meeting mandatory regulatory requirements for system implementation
- D. Identifying how customers are using products
Answer: C
NEW QUESTION 79
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?
- A. The total credit exposure for non-cooperative countries and territories
- B. Notification of management changes in the different major divisions
- C. Details on inquires received from law enforcement
- D. Results of related audits and examinations
Answer: D
NEW QUESTION 80
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