AML ENG

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What are the two main work streams in the KYC field?

Fraud Detection and Terrorist Financing Prevention

AML and Legislation

Transaction Monitoring (TM) and Customer Due Diligence (CDD) (correct)

Law Firms and Financial Institutions

What is the primary goal of Transaction Monitoring in financial institutions?

To streamline customer transactions

To increase customer profiles

To monitor internal stakeholders

To detect suspicious activity like money laundering or financial crime (correct)

Why is it essential for financial institutions to conduct Transaction Monitoring?

To comply with the Money Laundering and Terrorist Financing Prevention Act (correct)

To streamline internal processes

To monitor government legislation

To increase customer transactions

What aspect of customer financial transactions does Transaction Monitoring focus on?

Finding out where the money comes from, where it goes, and if it aligns with the customer profile Signup and view all the answers

How does Transaction Monitoring help in protecting the financial system?

By detecting illegal activities and criminal money through monitoring customer transactions Signup and view all the answers

What is the first stage of the money laundering process where the goal is to get the money into the financial system?

Placement Signup and view all the answers

Which term refers to the process where criminally obtained money is moved or hidden to disguise its origin and possession?

Layering Signup and view all the answers

What technique involves splitting a large sum of money into smaller amounts to avoid detection by institutions?

Smurfing Signup and view all the answers

Which method of layering involves creating a complex network of transactions between different bank accounts and countries?

Creating a network of interconnected transactions Signup and view all the answers

In the integration phase of money laundering, what is the primary goal?

To use money for legitimate activities Signup and view all the answers

What is the purpose of targeting or complicating money laundering according to the text?

To discourage criminals from carrying out illegal activities by hitting them hardest in the wallet. Signup and view all the answers

What was the origin of the term 'money laundering'?

Investing in businesses like laundromats with illegally obtained money Signup and view all the answers

What is the process involved in the first phase of the risk pyramid in transaction monitoring?

Identification Signup and view all the answers

Which organization developed guidelines to deter and combat money laundering?

United Nations Signup and view all the answers

What does the assessment phase of the risk pyramid in transaction monitoring involve?

Consulting external sources and conducting screening. Signup and view all the answers

What is the purpose of researching customer information and conducting an analysis in transaction monitoring investigations?

To identify discrepancies that don't fit the customer profile. Signup and view all the answers

What are the two main obligations under the Money Laundering Prevention Act?

Customer due diligence and reporting suspicious transactions Signup and view all the answers

What is the purpose of conducting thorough customer due diligence according to money laundering legislation?

To verify the identity of customers, understand their activities, and determine the origin of funds involved in transactions Signup and view all the answers

Why is it important to consult external sources like World Check or Lexis Nexis during transaction monitoring investigations?

To ensure compliance with anti-money laundering regulations. Signup and view all the answers

What is the consequence of failure to comply with the reporting requirement under anti-money laundering legislation?

Fines and reputational damage for financial institutions Signup and view all the answers

What is an example of an objective indicator that may suggest a transaction needs to be reported to the Financial Intelligence Unit?

The customer refuses to provide information about a transaction that falls outside their profile Signup and view all the answers

What is the role of a Compliance professional in the mitigation phase described?

To provide advice to senior management on handling unusual transactions Signup and view all the answers

What is the purpose of the Financial Intelligence Unit mentioned in the text?

To collect and share information on unusual transactions with investigative agencies Signup and view all the answers

What action can the Central Bank of a country take if financial institutions fail to comply with laws and regulations?

Immediately impose fines on the non-compliant institutions Signup and view all the answers

What is one of the key responsibilities of the Central Bank regarding financial institutions according to the text?

To supervise compliance with laws and regulations by financial institutions Signup and view all the answers