Adverse Consequences of Money Laundering

<p>Operational Risk (B)</p> Signup and view all the answers

<p>The closure of the organization (B)</p> Signup and view all the answers

<p>Withdrawing funds unexpectedly, even with large penalties (A)</p> Signup and view all the answers

<p>Reduced or terminated inter-bank services (C)</p> Signup and view all the answers

<p>Customers suing the financial organization for reimbursement (A)</p> Signup and view all the answers

<p>The senior manager (A)</p> Signup and view all the answers

<p>Transaction monitoring and filtering programs designed to monitor transactions post-execution (B)</p> Signup and view all the answers

<p>Adherence to industry standard models (B)</p> Signup and view all the answers

<p>That they have taken all necessary steps to comply with transaction monitoring requirements (C)</p> Signup and view all the answers

<p>Insurance companies (C)</p> Signup and view all the answers

<p>Because they are licensed to conduct banking operations in New York (D)</p> Signup and view all the answers

<p>Suspension and a fine (B)</p> Signup and view all the answers

<p>After they are executed. (D)</p> Signup and view all the answers

<p>Any transfer initiated by electronic means. (D)</p> Signup and view all the answers

<p>A client paying for a meal using a prepaid card. (B)</p> Signup and view all the answers

<p>Moving money from one account to another, using multiple transfers. (C)</p> Signup and view all the answers

<p>The vast volume of legitimate transfers that happen each day (C)</p> Signup and view all the answers

<p>Dispersing funds through various accounts and institutions. (B)</p> Signup and view all the answers

<p>To avoid detection by appearing less suspicious. (B)</p> Signup and view all the answers

<p>To provide a false sense of legitimacy to the transactions. (D)</p> Signup and view all the answers

<p>To detect and alert on potentially suspicious activity. (B)</p> Signup and view all the answers

<p>Transfers to or from a high-risk area that don't align with a customer's business or past activity. (A)</p> Signup and view all the answers

<p>RDC allows for easier movement of checks without immediate physical presence at a bank. (D)</p> Signup and view all the answers

<p>Small, but many incoming transfers via checks or money orders, followed by a large transfer to another location. (A)</p> Signup and view all the answers

<p>Establishing an account for depositing and providing access to a third party to operate it. (D)</p> Signup and view all the answers

<p>Random transfers with no clear connection to legitimate goods or services provided or received. (B)</p> Signup and view all the answers

<p>It streamlines the deposit and clearing process, which can be exploited for illicit activities. (D)</p> Signup and view all the answers

<p>Repetitive and unusual patterns in fund transfers between multiple accounts with various locations. (B)</p> Signup and view all the answers

<p>Setting up multiple imaging devices and accounts to allow other people to process checks through the system. (C)</p> Signup and view all the answers

<p>Difficulty in identifying fraud indicators due to reduced human intervention. (D)</p> Signup and view all the answers

<p>Integrating RDC processing with existing monitoring and fraud-prevention systems. (A)</p> Signup and view all the answers

<p>To connect its local customers with banking services in a foreign country through a correspondent bank. (B)</p> Signup and view all the answers

<p>The lack of direct knowledge of the individuals and entities using correspondent bank services. (C)</p> Signup and view all the answers

<p>To quickly take the appropriate action to resolve the issue. (A)</p> Signup and view all the answers

<p>To facilitate international financial transactions in jurisdictions where it lacks a physical presence. (C)</p> Signup and view all the answers

<p>Sequentially numbered checks and money orders without payees (B)</p> Signup and view all the answers

<p>That correspondent banking is a complex network (C)</p> Signup and view all the answers

<p>PTAs allow the foreign bank's customers to directly control funds at the correspondent bank, unlike typical correspondent accounts. (C)</p> Signup and view all the answers

<p>Individuals, commercial businesses, finance companies, exchange houses, and other foreign banks. (C)</p> Signup and view all the answers

<p>PTAs with foreign institutions licensed in offshore areas with lax bank supervision. (A)</p> Signup and view all the answers

<p>The correspondent bank considering only the respondent bank as its customer and failing to apply CDD policies to the respondent bank's customers. (D)</p> Signup and view all the answers

<p>Possible money laundering and other illicit activities. (A)</p> Signup and view all the answers

<p>To allow the respondent bank to operate like a branch without being subject to the related regulatory supervision. (C)</p> Signup and view all the answers

<p>Their potential to facilitate money laundering, terrorist financing, and sanctions evasion. (B)</p> Signup and view all the answers

<p>Because many financial institutions implemented strict controls regarding their use. (A)</p> Signup and view all the answers

The potential loss of public trust and negative perception of an organization due to suspected involvement in money laundering activities.

The risk that a financial organization's ability to meet its short-term financial obligations could be threatened by unexpected withdrawals of funds due to money laundering concerns.

The risk that a financial institution may lose access to essential financial services, such as correspondent banking, because of suspicion of money laundering.

The risk of incurring expenses related to investigations, legal actions, and penalties associated with money laundering activities.

The risk that assets owned by a financial organization could be seized by authorities due to their involvement in money laundering.

The risk of experiencing financial losses due to loans made to customers involved in money laundering activities.

The risk that the value of a financial organization's shares will decline because of its involvement in money laundering activities.

The risk of losing profitable business due to customers' perception of a financial organization's involvement in money laundering activities.

A rule requiring financial institutions to monitor transactions for suspicious activity and compliance with anti-money laundering (AML) laws.

A risk-based approach to transaction monitoring, tailoring the level of scrutiny to the institution's specific risks and profile.

Regularly testing and evaluating the effectiveness of transaction monitoring systems to ensure they accurately identify suspicious activities.

Thorough testing of the entire transaction monitoring system, from data input to final analysis, before and after implementation.

The legal obligation of senior managers to ensure compliance with AML/CFT regulations within their organization.

A legal requirement for financial institutions to annually certify their compliance with transaction monitoring rules.

The legal requirement for financial institutions to report any suspicious transactions to the authorities.

A legal framework dedicated to preventing money laundering and terrorist financing.

Any transfer of money initiated electronically, including internet-based transfers, ACH, ATMs, and mobile payments.

A system that moves trillions of dollars daily through millions of transactions, making it a prime target for illicit activities.

Criminals using electronic transfer systems to hide the origin of illegally obtained funds through multiple transactions.

The process of moving laundered money through multiple accounts, banks, and jurisdictions to make tracing difficult.

Unauthorized transfers of funds using electronic methods, such as ACH debits or credit card fraud.

Techniques used by money launderers to minimize detection, such as varying transfer amounts and staying below reporting thresholds.

Sophisticated software designed to identify suspicious activity related to electronic fund transfers.

Despite advanced systems, no system is perfect and criminals continue to find ways to exploit vulnerabilities.

Transferring funds to or from a country known for financial secrecy or high risk without a clear business reason or when it doesn't match the customer's usual activity.

Large incoming funds transfers received for a foreign client with little or no explanation.

Using checks and money orders for many small incoming transfers or deposits.

When almost all incoming funds transfers or deposits in an account are immediately wired to another account in a different location without a clear business reason.

Funds activity that is unexplained, repetitive, or follows strange patterns.

Payments or receipts that don't relate to legitimate contracts, goods, or services.

Funds sent or received from the same person to different accounts.

A banking service allowing customers to scan and deposit checks electronically, using a mobile phone or special device.

A banking arrangement where one bank acts as an agent for another bank in a foreign country. This allows local banks to provide services to customers who need banking in foreign locations.

The bank that uses the services of a correspondent bank in a foreign country to provide banking services to its customers.

The bank that provides banking services on behalf of another bank in a foreign country.

Using RDC to facilitate transactions involving sanctioned countries, which violates international regulations.

Exploiting RDC's reduced human intervention to commit fraudulent activities, such as altering checks or depositing the same item multiple times.

A set of measures, controls, and procedures designed to prevent, detect, and address financial crimes such as money laundering and fraud.

Integrating RDC processing into existing monitoring and fraud prevention systems to mitigate risks associated with its use.

A type of correspondent account where the foreign bank's customers have direct control over funds at the correspondent bank.

The ability of a foreign bank's customers to deposit and withdraw funds directly from the correspondent bank's account.

A type of jurisdiction with weak or underdeveloped financial oversight, making it vulnerable to money laundering and other financial crimes.

A key principle in anti-money laundering (AML) that requires financial institutions to identify and verify the identity of their customers, including those of correspondent banks.

Using a PTA relationship to mimic the operations of a branch office without the same level of supervision.

The individual or entity that has an account within the PTA held by the respondent bank.