AML Exam #2

FATF is currently comprised of 35 member-jurisdictions and 31 associate members or observers. A. True B. False

A

FATF's 40 Recommendations provide a complete set of countermeasures against money laundering, including special recommendations on terrorist financing. A. True B. False

A

For banks, the Wolfsberg Group papers are just recommendations. They do not have the force of law. A. True B. False

A

Section 311 of the USA PATRIOT Act provides the US Treasury Department with the authority to obtain information on the beneficial ownership of any account opened or maintained in the US by a foreign person or a foreign person's representative. A. True B. False

A

The European Directives have the force of law within the EU. A. True B. False

A

The IMF and the World Bank have started requiring countries that received aid to implement effective AML programs. A. True B. False

A

The Office of Foreign Assets Control (OFAC) is allowed to impose sanctions against certain foreign countries. A. True B. False

A

The Third EU Directive defined "money laundering" and "terrorist financing" as separate crimes. A. True B. False

A

Which of the following is the most difficult regulatory challenge facing a foreign financial institution with a correspondent banking relationship in the U.S.? A. USA PATRIOT Act B. Basel Due Diligence Principles for Banks C. FATF Guidance on Terrorist Financing D. UN Security Council Resolution on Correspondent Banking

A

Which of the following statements is TRUE? A. The Egmont Group membership comprises national FIUs. B. The Wolfsberg Group membership comprises central bank governors of the G10. C. The European Union recommends legislation to be passed in the member countries. D. The Basel Committee levies fines on the member countries for non-compliance with AML laws.

A

What are three suggestions articulated by FATF? A. That is appropriate to have good customer due diligence procedures B. That it is appropriate to require suspicious activity reporting C. That it is appropriate to criminalize money laundering and the financing of terrorism. D. That it is important never to allow numbered accounts

A,B,C

Which of the following should a national legislature consider when criminalizing money laundering in line with the CFATF 19 Recommendations? (Choose three.) A. Defining money laundering based on the model laws issued by the Organization of American States B. Permitting forfeiture in all cases following conviction C. Indicating whether it is relevant that a predicate offense may have been committed outside the local jurisdiction D. Requiring money laundering offenses to prove that the offender has actual knowledge of a criminal connection to the funds

A,B,C

FinCEN's Advisory to U.S. Financial Institutions on Promoting a Culture of Compliance, published in 2014, listed six areas of emphasis. Which three areas are included in that list? A. Leadership should be engaged. B. Information should be shared throughout the organization. C. Leadership and staff should understand how their BSA reports are used. D. The organization must have an appropriately qualified compliance officer.

A,B,D

In 2014, the Wolfsberg Group published its Anti-Money Laundering Principles for Correspondent Banking. Which three of the following elements are recommended to be included in the due diligence of a correspondent banking client? A. The geographic risk B. The ownership and management structure C. The résumé of the compliance officer D. The customer base

A,B,D

Section 311 of the Act provides for the potential designation of what three kinds of "primary money laundering concern"? A. Foreign account B. Foreign transaction C. Foreign politically exposed person D. Foreign jurisdiction

A,B,D

The Annex IV General Guide to Account Opening Consultative Document published in February 2016 by the Basel Committee lists information that should be obtained for the identification of legal persons. Which three items are recommended? A. Name, legal form, status and proof of incorporation of the legal person B. Permanent address of principal place of the legal person's activities C. A report describing a visit, by the account officer, to the principal place of business D. Identity of natural persons who have authority to operate the account and who exercise control of the legal person through ownership or other means

A,B,D

The Egmont Training Group published FIUs in Action: 100 Sanitized Cases. Which two of the items noted below were listed in the report as part of the six most frequent indicators of money laundering? A. Defensive stance to questioning B. Use of precious stones for moving value C. Unrealistic wealth compared to client profile D. Significant use of prepaid cards

A,C

In its paper on Customer Due Diligence of Banks Committee emphasized what three things? A. Customer acceptance B. Prohibition against opening accounts for PEPs C. Ongoing monitoring of high-risk accounts D. Customer identification

A,C,D

The United Nations' Palermo Convention expanded on the Vienna Convention by doing what three things? A. Expanding the scope of when identification and confiscation of the proceeds of crime should be used B. Expanding the number of elements making up the definition of money laundering C. Expanding the coverage of the convention to include issues other than drug trafficking D. Expanding the coverage of the convention to include organized crime

A,C,D

Which three statements are true about the Fourth EU Directive on Money Laundering? A. It updates European Community legislation to be further in line with the Financial Action Task Force (FATF) 40 Recommendations. B. It repeats the definition of a politically exposed person in previous directives. C. It repeats the customer due diligence requirements of the previous directives but adds more detail to the requirements by, for example, including a specific requirement to identify the beneficial owner and includes ongoing monitoring requirements. D. It includes new definitions for correspondent relationships and senior management.

A,C,D

All of the following statements related to actions of the Office of Foreign Assets Control (OFAC) are true, EXCEPT: A. Imposition of economic and trade sanctions based on US foreign policy. B. Restriction of travel by US citizens to certain countries based on sanctions lists that OFAC issues periodically. C. Freezing or blocking of foreign assets of persons and organizations under US jurisdiction. D. Imposition of significant penalties on those who are found to be in violation of the blocking orders within each of the sanction programs.

B

Does the USA PATRIOT Act have any international impact or ramifications? A. No B. Yes

B

The Basel Committee has observed that without due diligence, banks can be subject to social, operational, legal and economic risks. A. True B. False

B

The Basel Committee's paper on "Customer Due Diligence for Banks" specifies that the four key elements of a KYC program are: 1. Customer identification 2. Risk mitigation 3. Employee training 4. Geographic diversification A. True B. False

B

The Financial Action Task Force (FATF) is best known for what? A. Passing EU-Wide laws and policies on AML B. Issuing AML/CTF recommendations for countries to follow C. Having several subgroups D. Establishing the definition of counter terrorist financing

B

The Fourth EU Directive decreed that customer due diligence was to be applied for transfers of funds exceeding EUR 10,000. A. True B. False

B

The Wolfsberg Group aims to promote the establishment and the operational autonomy of FIUs, especially in areas with an AML/CFT program in the early stages of development. A. True B. False

B

The Wolfsberg Group was formed to provide a forum for financial intelligence units around the world to improve cooperation in the fight against money laundering and financing of terrorism. A. True B. False

B

The ____________________ is an association of 13 global banks that aims to develop financial services industry standards and guidance related to KYC, AML and Counter-Terrorist Financing policies. A. Egmont Group B. Wolfsberg Group C. International Monetary Fund D. Basel Committee on Banking Supervision

B

There are ten FATF-style regional bodies (FSRBs) that have similar form and functions to those of FATF. A. True B. False

B

Identify three key aspects of OFAC sanctions that have extraterritorial reach. A. Restricting travel by U.S. citizens to certain countries B. Economic and trade sanctions based on U.S. foreign policy C. Freezing foreign assets under U.S. jurisdiction D. Blocking people on the Specially Designated Nationals and Blocked Persons List

B,C,D

Identify three key roles of regional FATF-style bodies. A. Writing the FATF 40 Recommendations B. Publishing periodic typology reports C. Actively participating in identifying AML technical assistance needs Assisting in the FATF mutual evaluation process

B,C,D

Which three of the following statements are true in respect to the Fourth EU Anti-Money Laundering Directive? A. Member countries can decide when and if they incorporate it into their local laws. B. It repeals and replaces the Third EU Directive on Anti-Money Laundering. C. Each member country must hold beneficial ownership information in a central registry and it must be made available to competent authorities. D. The definition of a PEP is expanded to include domestic persons.

B,C,D

According to the EU Directives, an independent legal professional is obligated to report suspicion of money laundering in a client relationship when _________________. A. representing a client in a legal matter. B. ascertaining the legal position for a client. C. participating in financial or corporate transactions. D. obtaining information associated with a judicial proceeding.

C

All of the following are changes made in the Fourth European Union Money Laundering Directive, EXCEPT: A. Applying customer due diligence for transfer of funds exceeding EUR 1,000. B. Applying enhanced due diligence to PEPs, irrespective of domestic or third-country citizenship status. C. Increasing the threshold for entities obliged to report suspicious transactions from EUR 10,000 to EUR 15,000. D. Increasing the scope of obliged entities from just casinos to include all "providers of gambling services."

C

FATF fulfills its stated objectives by monitoring implementation of the FATF Recommendations among its members through _______________________ and _____________. A. risk assessment; compliance assessment B. international cooperation; law enforcement C. compliance assessment; effectiveness assessment D. technical compliance assessment; institutional framework assessment technical

C

The Basel Committee on Banking Supervision's paper on "Customer Due Diligence for Banks" specifies four key elements of a KYC Program. Which of the following is NOT a component/element of the KYC Program specified in the paper? A. Customer identification B. Risk management C. Employee training D. Monitoring

C

The European Union's First EU Directive focused primarily on what issue? A. Terrorist financing B. Structuring C. Drug trafficking D. Casinos

C

The FATF 40 Recommendations are organized into seven Groups. All of the following are valid FATF 40 Group names, EXCEPT: A. Financial and Non-Financial Institution Preventative Measures B. Powers and Responsibilities of Competent Authorities and Other Instructional Measures C. International Cooperation and Economic Sanctions D. Money Laundering and Confiscation

C

Which of the following Sections of the USA PATRIOT Act prohibits US banks and securities brokers and dealers from maintaining correspondent accounts for foreign, unregulated shell banks that have no physical presence anywhere? A. Section 319(a) B. Section 312 C. Section 313 D. Section 319(b)

C

Which statement is true in respect to the Wolfsberg Group? A. It is a castle in Belgium where members of national FIUs meet to monitor global AML trends. B. This group is responsible for making international laws to combat anti-money laundering and counter terrorist financing. C. The major international banks meet in this group to develop global guidelines for anti-money laundering and counter terrorist financing. D. The governors of central banks meet in this group to discuss global trends in anti-money laundering and counter terrorist financing.

C

In most money laundering international standards, it is stated that ___________________. A. financial institutions are not responsible for money laundering or suspicious transactions taking place within their accounts until the government places the customer on a watch list. B. informing customers that their accounts and/or transactions are the subject of an AML investigation is not punishable. C. the dirty money undergoing money laundering will not be confiscated because of privacy laws. D. the institution should identify the beneficial owner(s) of the account.

D

Which one of the following statements is correct in respect of the FATF 40 Recommendations? Countries should ________________________. A. not allow bearer shares and legal persons that are able to issue bearer shares. B. gather statistics on STRs; prosecutions and convictions; on property frozen, seized and confiscated; and on mutual legal assistance, but not necessarily on other international requests for cooperation. C. consider the feasibility of a system in which banks and other financial institutions and intermediaries would report currency transactions without indicating a minimum fixed amount. D. not approve the establishment or accept the continued operation of shell banks.

D