Questions to study again

What are the six of the most frequently observed indicators of money laundering?

1. Large-scale cash transactions 2. Atypical or uneconomical fund transfers to or from a foreign jurisdiction 3. Unusual business activity or transactions 4. Large and or/rapid movements of funds 5. Unrealistic wealth compared to client profile 6. Defensive stance to questioning

FinCENs Advisory to U.S. Financial Institutions on Promoting a Culture of Compliance, published in 2014, listed six areas of emphasis

1-Leadership Should Be Engaged 2-Compliance Should Not Be Compromised By Revenue Interests 3-Information Should Be Shared Throughout the Organization 4-Leadership Should Provide Adequate Human and Technological Resources 5-The Program Should Be Effective and Tested By an Independent and Competent Party 6-Leadership and Staff Should Understand How Their BSA Reports are Used

Which of the following should a national legislature consider when criminalizing money laundering in lone with 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. 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

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 s exposed person in previous directives C. It represents 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 correspondence relationships and senior management

A. It updates European Community legislation to be further in line with the Financial Action Task Force (FATF) 40 Recommendations C. It represents 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 correspondence relationships and senior management

FinCENs 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. Leadership should be engaged B. Information should be shared throughout the organization C. Leadership and staff should understand how their BSA reports are used

Which of the following controls would most effectively minimize the need to correct failures to collect required customer information in the account opening process? A. A quality review staff that checks paper applications to ensure all fields are complete B. An automated account-opening platform that requires data entry prior to allowing the account to be opened C. Requiring that a manager review and approve all new account applications D. Documenting a procedure that sets forth the steps required to open an account

B. An automated account-opening platform that requires data entry prior to allowing the account to be opened

Which of the three of the following is an indicator of possible money laundering in an insurance industry scenario? A. Insurance products sold through intermediaries, agents or brokers B. Single-premium insurance bonds, redeemed at a discount C. Policyholders who are unconcerned about penalties for early cancellation D. Policyholders who redeem the policy within the free look period

B. Single-premium insurance bonds, redeemed at a discount C. Policyholders who are unconcerned about penalties for early cancellation D. Policyholders who redeem the policy within the free look period

What is the definition of a predicate offense? A. Lawful or unlawful activity that involves willfully blindness, and if there is an international element to the crime, can lead to a suspicious activity report B. Unlawful activity whose proceeds, if involved in the transaction, can give rise to prosecution for the crime of money laundering C. An interface that is underlying segment of a suspicious transaction monitoring system D. A specified unlawful activity that is committed through concentration accounts deceiving customers that are not directly related to the account.

B. Unlawful activity whose proceeds, if involved in the transaction, can give rise to prosecution for the crime of money laundering

13 global bank members of the Wolfsberg Group

Banco Santander Bank of America Bank of Tokyo Mitsubishi UFJ Barclays Citigroup Credit Suisse Deutsch Bank Goldman Sachs HSBC JP Morgan Chase Society Generale Standard Chartered Bank UBS

Who serves at the Western Hemisphere's policy forum on all aspects of the drug program; fosters multilateral cooperation on drug issues in the Americas; executed action programs to strengthen the capacity of member states to prevent and treat drug abuse, to combat production and trafficking of illicit drugs and to deny traffickers their ill gotten gains; promoted drug-related research, information exchange, specialized training and technical assistance; develops and recommends minimum standards for drug-related legislation, treatment, measurement of both drug consumption and the cost of drugs to society and drug-control measures among other; and carried out regular multilateral evaluations of progress by member states in all aspects of the drug problem?

CICAD (commission interamericana para el control department abuse de drogas)

What accounts are established by one financial institution with another financial institution to hold deposits, make payments on its behalf as process other transactions?

Correspondent accounts

The Wolfsberg Anti-Money Laundering Principals for Private Banking was published in Oct 2000 revised in 2002 and again in 2012 What are their recommendations?

Customer Identification Enhanced due Diligence Heightened scrutiny of individuals who have or have had positions of public trust Banks must endeavor to accept only those clients whose source of wealth and funds can be reasonably established to be legitimate Identify the beneficial owner of funds for all accounts Urge private bankers to perform due diligence on "money managers and similar intermediaries" At least one person other than the private banker should approve all new clients and accounts

What are the five working groups that meet periodically and report to the Heads of FIUs?

IT working group (ITWG) Legal working group (LWG) Operational working group (OpWG) Outreach working group (OWG) Training working group (TWG)

This document discussed the need for appropriate monitoring of transactions and customers to identify potentially unusual or suspicious activity and transaction and for reporting such to competent authorities. In particular, it covered issues related to the development of risk-based processes for monitoring, screening and searching transaction and customers.

Monitoring, screening and searching Wolfsberg Statement in September 2003

Agreement among countries allowing for mutual assistance in legal proceedings and access to document and witnesses and other legal and judicial resources in the respective countries, in private and public sectors, for use in official investigations and prosecutions.

Mutual legal assistance treaty (MLAT)

The correspondent bank is thus processing transactions for financial institutions in which it has not conducted due diligence. Although this is normal part of correspondent banking, it requires the correspondent bank to conduct enhanced due diligence on its respondents AML program to adequately mitigate the risk processing the customers customers transaction.

Nesting

The practice where a respondent bank provides downstream correspondent services to other financial institutions and process these transactions through its own correspondent account.

Nesting

In May 1992, Who became the first permanent international body to reach an agreement on model legislation aimed specifically at dealing with money laundering?

Organization of American States

These accounts pose risks to the depository institutions that hold them because it can be difficult to conduct due diligence on foreign institution customers who are ultimately using ——- accounts.

Payable through account

Transaction account opened at a depository institution by a foreign financial institution through which the foreign institutions customer engage, either directly or through subaccounts, in banking activities and transactions in such a manner that the financial institutions customers have direct control over the funds in the accounts.

Payable through account

What enables U.S. federal, state, local and foreign (European Union) law enforcement agencies, through FInCEN, to reach out to more than 43,000 points of contact at more than 22,000 financial institutions to locate accounts and transaction of persons that my be involved in terrorism or money laundering

Section 314(a)

Provides financial institutions with the ability to share information with one another, under a safe harbor that offers protections from liability, in order to better identify and report potential money laundering or terrorist activities.

Section 314(b)

Forfeiture from U.S. Correspondent Account

Section 319(a)

Records relating to Correspondent Accounts for Foreign Banks (31 U.S.C. 5318(k))

Section 319(b)

An association of 13 global banks that aims to develop financial services industry standards and guidance to related to know your customer anti-money laundering and counter-terrorist financing policies

The Wolfsberg Group

Suzy is an AML compliance officer at an institution that is looking to open treasury management services (e.g., wires, check clearing and foreign draft issuance) for correspondent banking customers. Which of the following would Suzy be most concerned about regarding the institution's capabilities concerning these customers?

Whether the correspondent accounts will be able to be monitored by the institutions monitoring systems