Q 1 - 71.docx

**Q. 1** The compliance officer for a bank is reviewing on-boarding documents for a new business account for a domestic corporation. The officer is unable to verify the identity of the beneficial owners of the company. Only information on the nominee owners was provided, and none of the listed addr...

**Q. 1** The compliance officer for a bank is reviewing on-boarding documents for a new business account for a domestic corporation. The officer is unable to verify the identity of the beneficial owners of the company. Only information on the nominee owners was provided, and none of the listed addresses are local. The purpose of the business and future expected activity was disclosed to include cash letters, money orders and international remittance transfers. Which red flag identifies a heightened money laundering risk? A. Expected activity was advised to include cash letter and money orders B. Account signer\'s government issued identification lists addresses outside of where the branch account was opened C. The names provided at account opening are identified as the corporation\'s representative nominees D. The nature and purpose of the business include international remittance transfers **Q. 2** **00:05\'** **1/1P** expand\_less Topic 1 The Wolfsberg Anti-Money Laundering Principles for Private Banking require new clients to be approved by whom? The board of directors At least one person other than the private banker The private banker\'s supervisor Only the private banker **Q. 3** **00:07\'** **1/1P** expand\_less Topic 1 Which requirement is included in the Fourth European Union Directive on money laundering? It requires obliged entities to consider politically exposed persons as high risk for life It requires member states to enact economic sanctions against countries that do not cooperate with Financial Action Task Force recommendations It requires member countries to maintain registries of the benecial owners of legal entities It requires obliged entities to conduct enhanced due diligence on all prepaid card holders **Q. 4** **00:03\'** **1/1P** expand\_less Topic 1 An organization\'s automated surveillance system identies large uctuations in customer activity. As a result of an audit, the compliance ocer is informed that the system is not generating alerts when activity is consistently abnormal over a long period of time. Currently the organization is evaluating new alert scenarios in an attempt to address this problem. Which type of scenario is helpful in mitigating this weakness? Income Peer Below-the-line Mapping **Q. 5** **00:04\'** **1/1P** expand\_less Topic 1 Which method do terrorist nanciers use to move funds without leaving an audit trail? Virtual currency Extortion Cash couriers Casa de cambio **Q. 6** **00:03\'** **1/1P** expand\_less Topic 1 Which insurance product is particularly vulnerable to money laundering? Collateral Regulated pension Annuity Casualty **Q. 7** **00:55\'** **1/1P** expand\_less Topic 1 The compliance ocer at a crowdfunding website is in charge of monitoring new crowdfunding projects. Recently, the number of crowdfunding projects has signicantly increased. Which red ag indicates the highest anti-money laundering risk? Projects with the highest monetary success threshold Those with the largest number of donors Projects that get funding within days of their start Projects that start and close and are fully funded within a very short period **Q. 8** **00:06\'** **1/1P** expand\_less Topic 1 A bank account is established for a new business customer. The business was established ve years ago with an address in another state. The business website contains few details other than stating it is a real estate business. One principal has an international telephone number and appears to be living in another country. The other principal works out of a recreational vehicle. What warrants enhanced due diligence in this scenario? Shell company Money laundering through real estate Politically exposed person Human tracker **Q. 9** **00:41\'** **1/1P** expand\_less Topic 1 The compliance ocer for a private bank has been tasked with writing a policy on how the bank will deal with intermediaries. Which two aspects should be included in the policy in respect of intermediaries to align it with the Wolfsberg Anti-Money Laundering Principles for Private Banking? (Choose two.) When an intermediary introduces clients to the bank, it is not necessary for the bank to perform due diligence on the intermediary\'s clients. Where an intermediary introduces clients to the bank, the bank must obtain the same type of information with respect to an introduced client that would otherwise be obtained by the bank, absent the involvement of the intermediary. Where an intermediary manages assets on behalf of a number of clients and arranges for the opening of accounts for its clients with the bank, and that intermediary is a nancial institution subject to similar regulations, it is necessary for the bank to perform due diligence on the intermediary\'s clients. Where an intermediary manages assets on behalf of a number of clients and is the account holder with the bank, but that intermediary does not conduct the same level of due diligence as the bank, it is necessary for the bank to undertake due diligence on the intermediary\'s clients. **Q. 10** **00:04\'** **1/1P** expand\_less Topic 1 A popular restaurant in town has begun depositing less cash than it has in prior years. In a review of the customer\'s accounts, you notice that credit card receipts have increased with no explanation. The account ocer discovers that the restaurant has installed a privately-owned automated teller machine (ATM) onsite and has begun construction of a patio dining area. Which red ag should trigger additional investigation? Increased credit card receipts Construction of the new patio dining area Privately-owned ATM Lower cash deposits **Q. 11** **00:18\'** **1/1P** expand\_less Topic 1 An anti-money laundering audit identies a signicant weakness in how transaction monitoring alerts are cleared. Audit sampling identied potentially suspicious activity that was cleared as not suspicious. Management accepts the audit nding and develops a remediation plan. What is the role of the auditor during the correction phase? Providing training to the alert clearing department on the importance of effective alert clearing Directing the remediation of the deciency in a timely manner Developing procedures to provide sucient risk-based documentation for clearing alerts Validating the successful remediation of the issue once management indicates the issue is resolved **Q. 12** **00:03\'** **1/1P** expand\_less Topic 1 A bank located in Arizona is considering a loan application for a new client. The collateral for the loan is a property in Florida. The loan will be in the name of a limited liability company (LLC) whose ownership is not disclosed to the bank. The LLC was established by a New York-based attorney. The loan will be repaid by the LLC in monthly wire transfers of \$9,000 which is more than the required monthly payment. Which aspect indicates the potential for money laundering? The LLC\'s ownership is not disclosed to the bank The collateral, a property in Florida, is not located in Arizona The attorney associated with the account is outside the bank\'s lending area The repayment in the amount of \$9,000 indicates potential structuring **Q. 13** **00:08\'** **1/1P** expand\_less Topic 1 An employee hears a colleague on the telephone with a customer giving advice on how to ensure that a suspicious transaction report will not be led as a result of a future transaction. What action should the employee take? Report the conversation to the compliance ocer Tell the colleague that it is against policy to give such advice Ignore the situation because the colleague is the relationship manager for that customer Report the conversation to the local police **Q. 14** **00:07\'** **1/1P** expand\_less Topic 1 A new compliance ocer is reviewing the bank\'s anti-money laundering program and notices that the risk assessment was completed six months ago. Since that time, the bank acquired another nancial institution, re-named the internal records group, and streamlined cash handling procedures. Which factor causes the compliance ocer to update the bank\'s risk assessment? The internal records group has been re-named The bank acquired another institution The cash handling procedures were streamlined The risk assessment was completed six months ago **Q. 15** **00:33\'** **1/1P** expand\_less Topic 1 Which two individuals are ordinarily benecial owners of a private banking account according to the Wolfsberg Anti-Money Laundering Principles for Private Banking? (Choose two.) Those who have legal title to a controlling share interest in the customer Those who are the ultimate source of funds for the account and whose source of wealth should be subject to due diligence Those who are authorized signers on the account Those who generally have ultimate control through ownership or other means over the funds in the account **Q. 16** **00:11\'** **1/1P** expand\_less Topic 1 What is an example of the integration stage of money laundering involving a bank or another deposit-taking institution? Directing third parties to exchange illicit cash for negotiable instruments Using illicit funds that had previously been deposited to purchase a luxury vehicle Wiring illicit funds from an account at one bank to an account at another bank Depositing illicit funds into an account set up for a front company **Q. 17** **00:09\'** **1/1P** expand\_less Topic 1 A customer brings \$15,000 worth of chips into a casino and plays various games. The customer redeems all the remaining chips and requests a wire transfer of the proceeds to an unrelated third party. What are two red ags that indicate money laundering? (Choose two.) Playing various games before cashing out Bringing \$15,000 worth of chips into the casino Customer redeeming all remaining chips Requesting a wire transfer to an unrelated third party **Q. 18** **00:14\'** **1/1P** expand\_less Topic 1 A bank compliance ocer has implemented enhanced monitoring rules that have identied some unusual activity that may be indicative of human tracking. Which red ag should prompt additional transactional review? Cash deposits that occur in cities where the customer does not reside or conduct business followed by same-day withdrawals Cash deposits that occur in cities where the customer resides and conducts business Wire transfer activity from countries with signicant migrant populations Cash deposits that occur in cities where the customer does not reside or conduct business **Q. 19** **00:17\'** **1/1P** expand\_less Topic 1 What are two legal risks of having inadequate privacy policies and procedures? (Choose two.) Industry of regulatory sanctions Higher marketing and public relations costs Charges of deceptive business practices Diminished reputation **Q. 20** **00:06\'** **1/1P** expand\_less An institution is about to release a new peer to peer (P2P) funds transfer product to provide much needed remittance services to an under-banked population segment in the country. The service allows customers to transfer funds through a mobile banking application to individuals worldwide entering only a name and mobile number. The new service charges less than comparable market solutions and offers real time transfer of funds. The customer onboarding process is conducted at branch locations with identity verification. Which three present the highest anti-money laundering or sanctions risk and will require controls prior to launch? (Choose three.) Cross-border functionality Customer onboarding Real time transfer of funds Servicing the under-banked population Limited access to counterparty information **Q. 21** **00:21\'** **1/1P** expand\_less Topic 1 In reviewing recent activity, a compliance ocer for a money transmitter that several customers are each remitting the same amount of money but much more frequently. How should the institution respond? Immediately contact the customers and ask them why they are remitting money more often Instruct the tellers not to process remittances for these customers in the future File a suspicious transaction report Conduct further investigation to determine whether this is truly suspicious activity **Q. 22** **00:09\'** **1/1P** expand\_less Topic 1 The branch manager notices that a number of customers come in weekly and always use the same teller to process their deposits. The manager notices that the customers and the teller, who are from the same ethnic group, are speaking in a foreign language and every once in a while the customers from local ethnic restaurants will bring the teller lunch. The commercial customers that visit the teller generally deposit the same amount of cash each time they come in. How should the branch manager respond to this activity? Suggest to the teller to send the customers to other tellers to avoid the opportunity for collusion Encourage the teller to bring in more business from the ethnic community Transfer the teller to another branch Conduct further investigation before taking any other action **Q. 23** **00:06\'** **1/1P** expand\_less What is a key objective of the Egmont Group? To provide best practices for financial institutions on how to report suspicious activity to best share the information with law enforcement. To issue binding standards that establish consistently operated Financial Intelligence Units in member jurisdictions. To safeguard the financial system from illicit use and combat money laundering and promote national security. To find ways to promote the development of Financial Intelligence Units and the sharing of expertise. **Q. 24** **02:04\'** **1/1P** expand\_less Topic 1 In which two ways does a government Financial Intelligence Unit interact with public and private sectors? (Choose two.) It disseminates information and the results of its analysis to competent authorities It mediates disputes between nancial institutions and investigative authorities It governs the methods of investigation used by competent authorities It receives and analyzes disclosures led by nancial and non-bank institutions **Q. 25** **00:23\'** **1/1P** expand\_less Topic 1 An immigrant residing in the United States opens a bank account that includes a debit card. Several months later, the transactional monitoring system identies small deposits into the account followed by corresponding ATM withdrawals from a country bordering a conict zone. How should the bank respond? Initiate an investigation into the activity File a suspicious transaction report Block any further activity Contact the customer if the transaction activity continues **Q. 26** **00:10\'** **1/1P** expand\_less Topic 1 A foreign bank operating under an offshore license wants to open a correspondent account with a United States (U.S.) bank. The foreign bank plans to provide payable through account services to some of its customers. What must the foreign bank provide to the U.S. bank under the USA PATRIOT Act? A list of account holders at the nancial institution who will use the payable through account A list of politically exposed persons who are owners of the correspondent bank A list of anti-money laundering training records for the nancial institution employees monitoring payable through account transactions The person in the United States who can receive service of legal process for the correspondent bank **Q. 27** **00:13\'** **1/1P** expand\_less Topic 1 A branch manager for a small community bank has a new customer who deposits four EUR 50,000 checks into one account. Shortly thereafter, the customer goes to another branch and asks to transfer all but EUR 1,500 to three accounts in different foreign jurisdictions. Which suspicious activity should be the focus of the suspicious transaction report? The customer asks to transfer funds to accounts in three different foreign jurisdictions The customer goes to a different branch to make this transaction The customer transfers almost all of the funds out of the account The customer opened the account with four large checks **Q. 28** **00:04\'** **1/1P** expand\_less Topic 1 A bank has maintained an account for a European charity for several years. The charity provides clothing to persons in need in various countries with active terrorists\' cells. Which action by the charity indicates possible terrorist nancing? The charity frequently withdraws cash from the bank The charity has branch locations located in various countries The charity maintains a bank account for non-business-related expenses The charity receives cash donations primarily from European countries **Q. 29** **00:09\'** **1/1P** expand\_less Topic 1 A law enforcement ocial calls a bank inquiring about a customer who is currently under investigation. The law enforcement ocial requests information about the customer. How should the bank respond? Provide the requested information to help aid in the investigation Request a formal letter be submitted to verify the validity of the request Inform the board of directors before responding to the request Conrm the customer is either a current or former customer **Q. 30** **00:12\'** **1/1P** expand\_less What are two reasons physical certificates present a money laundering risk to broker-dealers? (Choose two.) The trade information on a physical certificate can be easily altered Physical certificates do not expire and may be held by the owner for perpetuity There is little information readily available to the broker confirming the source of the funds Physical certificates may be provided to nominees for deposit or settled in off-market transactions **Q. 31** **00:18\'** **1/1P** expand\_less Topic 1 As a result of an audit, a policy exception was identied that had been approved by the compliance ocer. The auditor determined that the policy exception is a violation of a regulatory requirement. What should the auditor do? Advise the compliance ocer on how to appropriately respond to policy exceptions. Include the regulatory violation in the audit report and report it to the board of directors. Include the regulatory violation in the audit report and recommend the compliance ocer be subject to disciplinary action by the board of directors. Consult with legal counsel to determine if the approval of the policy exception was acceptable. **Q. 32** **00:10\'** **1/1P** expand\_less What is the goal of the Egmont Group in providing a forum for Financial Intelligence Units (FIUs) around the world? To provide a forum for FIUs to improve cooperation in the fight against money laundering and the financing of terrorism and to foster the implementation of domestic programs in this field. To improve communication with law enforcement in the fight against money laundering and the financing of terrorism and to foster the implementation of domestic programs in this field. To improve international laws to combat money laundering and the financing of terrorism and foster the implementation of domestic programs. To improve cooperation with state and federal governments in the fight against money laundering and the financing of terrorism and to foster the implementation of domestic programs in this field. **Q. 33** **00:02\'** **1/1P** expand\_less Topic 1 Which method to launder money through deposit-taking institutions is closely associated with international trade? Structuring cash deposits/withdrawals Forming a shell company Using Black Market Peso Exchange Investing in legitimate businesses with illicit funds **Q. 34** **00:05\'** **1/1P** expand\_less Upon a routine account review a money laundering investigator identified a number of large round dollar wire transfer deposits into a business account owned by a local auto repair shop. The wire transfers all originated from a country that is a known financial secrecy haven with poor anti-money laundering controls. The investigator concludes there appears to be no legitimate business purpose for the wire transfers and files a suspicious transaction report. The owner of the auto repair shop is popular in the community and is a well-known philanthropist. To whom should the investigator escalate these concerns? The owner of the auto repair shop Chairman of the Board Audit committee The bank anti-money laundering officer **Q. 35** **00:24\'** **1/1P** expand\_less Topic 1 The USA PATRIOT Act requires United States (U.S.) nancial institutions to collect certain information from non-U.S. banks that hold a correspondent account. Which two pieces of information must a non-U.S. bank provide to its U.S. correspondent to enable them to comply with this requirement? (Choose two.) The name and address of all benecial owners who own 25% or more of the bank The name and address of all shell banks the bank maintains accounts for Prompt notice of any suspicious activity it detects on any customer who uses the correspondent account The name and address of a U.S. person who is authorized to receive service of legal process for the bank **Q. 36** **00:07\'** **1/1P** expand\_less Topic 1 What are two requirements with respect to supporting documentation that is used to identify potentially suspicious activity, according to Financial Action Task Force? (Choose two.) It must be kept in a manner so that it can be provided promptly It must be retained for at least ve years It must only be released to the government through a subpoena process It must be retained for at least seven years **Q. 37** **00:05\'** **1/1P** expand\_less Topic 1 What is an essential element of Know Your Customer (KYC) standards according to the Basel Committee\'s Customer Due Diligence for Banks paper? Annual staff training The same KYC requirements must be applied in all cases A customer acceptance policy All completed KYC documents must be reviewed by a senior manager not involved in the account opening process **Q. 38** **00:06\'** **1/1P** expand\_less Topic 1 A customer living in a high-risk jurisdiction makes frequent, large cash deposits at a bank. The same customer sends small wire transfers to unrelated parties in other high-risk jurisdictions. What are two red ags that may indicate money laundering? (Choose two.) The bank allows cash deposits Wire transfers are to high-risk jurisdiction Large cash deposits are from a high-risk jurisdiction The client resides in a high-risk jurisdiction **Q. 39** **00:18\'** **1/1P** expand\_less Topic 1 Which two factors assist a money laundering investigation that involves multiple countries? (Choose two.) Every country should share all their information with foreign law enforcement and government authorities to facilitate rapid investigations. Law enforcement and other authorities should have access to nancial information that is pertinent to the investigation. Law enforcement and other authorities should be allowed to establish and utilize joint investigative teams with law enforcement in other countries. Law enforcement and other authorities should not expedite information sharing between countries to ensure that all information is provided at the same time to avoid premature conclusions. **Q. 40** **00:05\'** **1/1P** expand\_less A compliance officer learns from an Information Technology (IT) source of a potential new financial service being discussed by the new product approval committee. What is the correct next course of action? Go to the board of directors and try to shut the new service down immediately because the committee did not communicate with the compliance officer. Request that the new product approval committee include the compliance officer. Get as much information as possible from the source so that potential risks can be researched and a report prepared and presented to the head of marketing. Start initial research into potential risks but wait until notified that the service has been approved by the committee before initiating extensive research. **Q. 41** **00:31\'** **1/1P** expand\_less Topic 1 A United States (U.S.) bank was recently alerted by law enforcement of an increase in sale of large denomination U.S. bank notes to casas de cambio. They suspect that a Mexican syndicate is operating a money laundering scheme in the bank\'s jurisdiction. Which two steps should be taken to trace funds through the bank to assist law enforcement in their investigation? (Choose two.) Identify if there is a decrease in the sale of large denomination U.S. bank notes to casas de cambio by the bank Identify deposits by casas de cambio that include third-party items including sequentially numbered monetary instruments Identify multiple wire transfers initiated by casas de cambio to jurisdictions outside of Mexico that bear no apparent business relationship with that casa de cambio Identify the money laundering scheme and submit a suspicious transaction report **Q. 42** **00:12\'** **1/1P** expand\_less The branch manager calls the compliance officer and informs her that a law enforcement officer has just left the branch and was asking a lot of questions and left a business card. What should the compliance officer do? File a suspicious transaction report Follow up to verify that the officer received all necessary information Verify that the reported officer was an actual authorized representative Require the branch manager to write a detailed memo about the request **Q. 43** **00:25\'** **1/1P** expand\_less Topic 1 What do Financial Action Task Force (FATF)-style regional bodies do for their members to help combat money laundering and terrorist nancing? They supervise member country nancial institutions relating to anti-money laundering and terrorist nancing They provide technical assistance to members in implementing FATF recommendations They work with members on areas of concern outside of anti-money laundering and terrorist nancing They assist member countries in penalizing entities that violate FATF standards and recommendations **Q. 44** **00:10\'** **1/1P** expand\_less Topic 1 A politically exposed person (PEP) maintains an account at a bank. Last month a money laundering analyst led a suspicious transaction report about unusual wire deposits originated by unknown individuals in the home country of the ocial. Recently a negative news search revealed political corruption in the home country of the ocial. To whom should this situation be escalated? The board of directors The bank\'s anti-money laundering ocer The Financial Action Task Force\'s PEP Hotline The line of business executive **Q. 45** **00:08\'** **1/1P** expand\_less Topic 1 In the summer, an institution identies anti-money laundering concerns regarding a customer\'s account activity. The customer, an ice cream parlor, has deposited a lot of checks drawn on banks in foreign countries, sent large number of high dollar international wires to different countries, made cash deposits of a few hundred dollars every few days and written multiple checks for a few hundred dollars to the same dozen payees every two weeks. Which two transaction types warrant investigation? (Choose two.) Repeated checks to the same payees The wires to foreign countries Regular cash deposits Checks drawn on banks in foreign countries **Q. 46** **00:10\'** **1/1P** expand\_less Topic 1 A customer opens a corporate account with a broker-dealer on behalf of several benecial owners, with a stated long-term investment goal. The customer deposits \$25.5 million into the account and three days later transfers \$5 million to an overseas bank. Shortly thereafter, the customer begins making numerous purchases of pesos. The compliance ocer receives a query regarding the movement of funds. Within a month of account opening, the customer depletes the account. Which two red ags should prompt the rm\'s compliance ocer to take action? (Choose two.) A corporate account is opened on behalf of several benecial owners The compliance ocer receives the query regarding the movement of funds The customer\'s stated investment goal is not reective of account activity The new account deposit is \$25.5 million **Q. 47** **00:07\'** **1/1P** expand\_less A compliance officer at an insurance company has been reviewing the transaction activity of several clients. Which transaction is considered a red flag for potential money laundering? A client paid the quarterly life insurance premium using money orders from two different banks. A corporation owns several affiliates and recently opened separate group life insurance policies for each of the affiliates. A client established a \$100,000 charitable annuity with a non-profit organization that provides health and safety assistance internationally. A client from a high-risk jurisdiction recently purchased property insurance for a real-estate development. **Q. 48** **00:08\'** **1/1P** expand\_less Topic 1 A foreign politically exposed person (PEP) requests to add a beneciary to a life insurance policy. How should the request be processed to mitigate risk? Decline the request if the beneciary is a foreign PEP Perform due diligence on the beneciary Decline the request to add a beneciary due to increased risk Determine the source of wealth and source of funds **Q. 49** **00:06\'** **1/1P** expand\_less Topic 1 A retail bank has just acquired a credit card business. The bank\'s anti-money laundering policy requires that new employees are trained within 30 days of their hire date and refresher training is delivered to all employees on an annual basis. Is the bank\'s existing anti-money laundering training adequate to be delivered to employees of the newly acquired credit card business? Yes, the existing training covers the bank\'s policies, procedures, and processes. Yes, the existing training covers the anti-money laundering regulations that the bank is required to follow. No, anti-money laundering training needs to be delivered face-to-face for credit card businesses. No, anti-money laundering training needs to be tailored and focused on the risks specic to the business. **Q. 50** **00:04\'** **1/1P** expand\_less What is a major economic consequence of money laundering through the use of front companies? Aligning management principles between criminal enterprises and legitimate businesses Creating a more competitive pricing environment Weakening of the legitimate private sector Placing more emphasis on manufacturing **Q. 51** **00:16\'** **1/1P** expand\_less Topic 1 Which two statements in the Wolfsberg Group\'s \`Suppression of the Financing of Terrorism\` dene the role nancial institutions should play in the ght against terrorism? (Choose two.) Financial institutions need to assist competent authorities in ghting terrorist nancing through prevention, detection and information sharing. Financial institutions should have nancial intelligence units dedicated to the investigation of activity that would lead to the detection of terrorist nancing as a means to decrease global terrorism. Financial institutions should apply extra due diligence whenever they see suspicious or irregular activities, especially when customers are engaged in sectors or activities that have been identied by competent authorities as being used for the nancing of terrorism. Financial institutions need to continuously analyze the types of activity related to terrorist nancing and develop models that in the long term will drive down terrorism. **Q. 52** **00:11\'** **1/1P** expand\_less Topic 1 Which two factors should increase the risk of a correspondent bank customer and require additional due diligence according to the Wolfsberg Anti-Money Laundering Principles for Correspondent Banking? (Choose two.) The customer is located in a Financial Action Task Force member country and provides services primarily to a local individual customer. The customer is located in a Financial Action Task Force member country and provides services to other correspondent banks in neighboring countries. The customer is located in a non-Financial Action Task Force member country and services mostly commercial customers who engage in international trade. The customer is located in a Financial Action Task Force member country and the bank\'s head of information security is a politically exposed person. **Q. 53** **00:07\'** **1/1P** expand\_less Topic 1 What are two sources for maintaining up-to-date sanctions information? (Choose two.) U.S. Department of the Treasury Oce of Foreign Assets Control U.S. Federal Bureau of Investigation\'s National Security Letters Financial Action Task Force\'s list of High Risk and Non-Cooperative Jurisdictions U.S. Department of the Treasury ג€\" Section 311 ג€\" Special Measures **Q. 54** **00:10\'** **1/1P** expand\_less Topic 1 What is a key risk associated with Correspondent Accounts according to the Basel Customer Due Diligence paper? The respondent bank\'s customer acceptance and know your customer policies are ineffective The service fees are insucient to cover the cost of managing the account It is not used on a daily basis The volume and value of transactions passing through the account may not be in line with the original correspondent agreement **Q. 55** **00:19\'** **1/1P** expand\_less What are two red flags that indicate how trade-based money laundering could be occurring in this instance? (Choose two.) The packaging is inconsistent with the commodity or shipping method The type of commodity being shipped appears inconsistent with the exporter or importer\'s regular business activities Significant discrepancies appear between the description of the commodity on the bill of lading and the invoice The transaction involves the use of front (or shell) companies **Q. 56** **00:12\'** **1/1P** expand\_less Topic 1 A non-U.S. bank wants to open an account at Bank A, which is a U.S.-based bank. Which information must Bank A obtain under the USA PATRIOT Act? The details of the non-U.S. bank\'s anti-money laundering compliance training program The identity of owners and percentage of ownership of the non-U.S. bank The structure and identity of the management team at the non-U.S. bank A complete client list from the non-U.S. bank **Q. 57** **00:03\'** **1/1P** expand\_less Topic 1 When should the anti-money laundering risk assessment be updated? When instructed to by the Financial Action Task Force When the board of directors changes Every two years After a merger or acquisition **Q. 58** **00:15\'** **1/1P** expand\_less Topic 1 What is the appropriate compliance control for identifying politically exposed persons (PEPs) according to the Basel Committee\'s paper on Customer Due Diligence for Banks? Determining that a local gure is a PEP Reviewing relationships at account opening and on a periodic basis Requiring that the customer discloses that they are a PEP or an associate of a PEP Reviewing when a relationship is established **Q. 59** **01:31\'** **1/1P** expand\_less Topic 1 An institution has made the decision to exit a client relationship due to anti-money laundering concerns. Prior to starting the close out process, the institution receives a written request from a law enforcement agency to keep the account open. The client is the subject of an ongoing investigation and law enforcement wants the institution to continue to monitor the account and report any suspicious activity. What is a primary consideration the institution should keep in mind when deciding whether to agree to this request? The number of suspicious transaction reports previously led on the client Whether the institution can continue to meet its regulatory obligations with the accounts open The fact that the institution has a solid record in complying with law enforcement requests The anticipated cost of complying with the law enforcement request **Q. 60** **00:11\'** **1/1P** expand\_less Topic 1 Why do governments and multi-national bodies impose economic sanctions? To prevent fraudulent international trade transactions To combat an imminent terrorist threat To enforce foreign policy objectives To impede kleptocracy **Q. 61** **00:16\'** **1/1P** expand\_less Topic 1 Which aspect of the USA PATRIOT Act impacts foreign nancial institutions? Expanding sanctions requirements to a U.S. nancial institution\'s foreign branches Requiring enhanced due diligence for foreign shell banks Expanding the anti-money laundering program requirements to all foreign nancial institutions Providing authority to impose special measures on institutions that are of primary money-laundering concern **Q. 62** **00:07\'** **1/1P** expand\_less Topic 1 A law enforcement agency is reviewing a suspicious transaction report (STR) led by a nancial institution for suspicious activity on a client\'s account. Subsequently, the agency requests further information. Which supporting documentation might the law enforcement agency request from the institution to facilitate its investigation? A copy of the institution\'s STR policy and procedures Account opening documents and account statements Previously led STRs on the same customer Copies of promotional materials sent to the customer **Q. 63** **00:10\'** **1/1P** expand\_less Topic 1 A government has instituted new anti-money laundering laws which require all nancial institutions to obtain certain information from its customers. Which step should an institution located in this jurisdiction take to ensure compliance? Send a notice to customers asking them to provide the necessary information Change procedures to require that the necessary information is obtained Change procedures and systems as necessary and provide employee training Change systems to ensure the required information is automatically obtained from all customers **Q. 64** **00:12\'** **1/1P** expand\_less Topic 1 A U.K. real estate agent has three foreign clients interested in purchasing an apartment building, valued at ֲ£30 million, in the outskirts of London as an investment property. The clients are not willing to have their names provided to the bank. The clients want the purchase to be made in the names of three private companies for privacy reasons. The plan is to wire the funds into an account held in the name of another private company at a bank in London. Which red ag should stop the agent from discussing this potential purchase further? The clients are foreign The clients have the funds necessary to fund a ֲ£30 million purchase The clients want the purchase to be made in the names of the private companies The clients are not willing to have their names provided to the bank **Q. 65** **00:09\'** **1/1P** expand\_less Topic 1 The vice president of the foreign correspondent banking department at a large United States bank has been notied that a foreign bank with an offshore license wants to open a correspondent account. Which two things must the vice president acquire under the USA PATRIOT Act? (Choose two.) A list of the types of businesses served by the correspondent bank Information relating to the foreign bank\'s anti-money laundering program The identity of 10% owners of the correspondent bank, unless it is publicly traded A list of all the customers of the correspondent bank **Q. 66** **00:11\'** **1/1P** expand\_less Topic 1 What is true regarding disclosure to a law enforcement agency by a nancial institution of the supporting documentation for a suspicious transaction report? Confrm that the request originated from a representative of the law enforcement agency Documentation must be provided as quickly as possible using email The nancial institution may notify the account holder of the request A copy of all the documentation released must also be provided to the account holder\'s attorney **Q. 67** **00:56\'** **1/1P** expand\_less Topic 1 What should countries do to help prevent non-prot organizations from being abused for the financing of terrorism according to the Financial Action Task Force 40 Recommendations? Require all non-prot organizations to register with the country\'s nancial intelligence unit Allow for freezing assets of non-prot organizations Create laws that forbid non-prot organizations from completing cross-border transactions without rst running them through known terrorist data bases Ensure non-prot organizations cannot be used to conceal or obscure the diversion of funds intended for legitimate purposes to terrorists\' organizations **Q. 68** **00:15\'** **1/1P** expand\_less Topic 1 Which three methods are commonly used by an accountant to launder money? (Choose three.) Understating income to take a tax loss Representing a client in court Overstating income to hide excess cash Acting as a designee for someone who wishes to hide their identity Acting as a conduit for transferring cash between accounts **Q. 69** **00:09\'** **1/1P** expand\_less Topic 1 What are two requirements for monitoring and reporting suspicious activity for correspondent banking according to the Wolfsberg Principles? (Choose two.) Incorporate suspicious activity monitoring into periodic reviews Utilize downstream correspondents to investigate and report suspicious activity Investigate and report suspicious activity only for the correspondent bank\'s clients Incorporate due diligence results such as customer risk ratings **Q. 70** **00:16\'** **1/1P** expand\_less Topic 1 A bank maintains a relationship with a customer who owns a small bakery business. Which customer action indicates potential money laundering? The customer purchased property insurance that is twice the value of the business The customer recently wired a large amount to a foreign jurisdiction where family is located The customer continually makes regular cash deposits The customer has multiple bank accounts at several locations **Q. 71** **00:14\'** **1/1P** expand\_less Topic 1 What are the regulatory risks to a bank employee who willfully violates anti-money laundering laws? Investigation and reputational damage Criminal investigation and imprisonment Enforcement actions including nes against the nancial institution Fines and suspension from the industry