IT- Anti- Money Laundering Laws and Practices
If the identity of a person conducting a suspicious activity is not known, how long does a financial institution have to file an SAR? (Suspicious Activity Report).
60 Days
An electronic transaction via the internet or through an encrypted card that has a monetary value that is tracked by a microchip is...
A cyber-payment
What businesses are especially susceptible to various Money Laundering techniques?
Banks and their Affiliated business lines
Placement:
Depositing illicit moneys in a financial institution is an example of placement
Bank Secrecy Act:
Established reporting requirenments
Structured transactions are also known as...
Smurfing
Smurfing often occurs during...
The Placement Stage
Why don't private banks fulfill their money laundering responsibilities?
They are asked to fill conflicting rolls
Money Laundering:
Money laundering can be made up of: - Narcotics Transactions - Bank Fraud - Acts of Terrorism - Counterfeiting - Misapplication of funds by an officer or employee
Financial Professionals should consider all of the following in any transaction with a client EXEPT...
Number of dependents
Smurfing occurs during...
Placement
The International Monetary Fund:
The international Monetary Fund estimates the magnitude of money laundering is about 2% to 5% of the worlds gross domestic product
Which of the following acts gives the Secretary of Treasury and the Attorney General power to issue a summons or subpoena for records of a foreign financial institution that maintains a correspondent account in the United States?
USA Patriot Act of 2001
What is NOT a common element in money laundering schemes?
A bank account with consistently routine activity
What rule requires transmitting financial institutions to pass along information regarding the transmittal to the next financial institution?
Travel Rule
A Currency Transaction is for reporting...
Any currency transaction greater than $10,000
If a financial firm is unable to retrieve or produce all required information for a wire transfer, the firm is in violation of...
The Joint Rule
Which of the following are the consequences of Money Laundering?
- Financial Fraud - Arms Smuggling - Narcotics trafficking
What are the essential components of a formal Anti-Money laundering program under the USA Patriot Act...
- Independent Audit Function - Internal Compliance Officer - Employee Training Program
What are all the steps in the money laundering stage?
- Layering - Integration - Placement
The Bank Secrecy Act established...
- Monetary and criminal penalties for violating the act - Records that must be kept on various transactions - Types of reporting requirements for large and suspicious transactions
When a financial institution blocks transactions, it must report the blocking to OFAC within how many days of the block?
10 business days
Financial Institutions are required to trace the source of all funds belonging to foreign persons or institutions when...
A primary money laundering concern has been identified
USA Patriot Act (2001):
An international Money Laundering Abatement and anti-terrorist financing act of 2001 can be found in the title III of the USA Patriot Act.
Layering Phase:
During the layering phase, money launderers separate the proceeds from their illegal sources by using multiple complex financial transactions to obscure the audit trail and hide the proceeds.
Placement Stage:
During the placement stage, funds are placed in the financial system.
What represents principles of action that countries can implement according to their particular circumstances and constitutional frameworks and were designed to have universal application?
FATF's Forty Recommendations
What organization is a bureau of the treasury department that provides US policy makers with strategic analyses of domestic and worldwide money laundering developments, trends, and patterns?
FinCEN
All of the following make the insurance industry susceptible to money launderers except...
Insurance companies are exempt from compliance with the US Patriot Act
Mixing illicit and legal funds to purchase a new car is an example of...
Integration
Integration:
Integration occurs when illegal money is mixed with legitimate business earnings.
Securities firms are most often used by money launderers to...
Layer Transactions
Using multiple complex financial transactions to obscure the source of illegal funds is called...
Layering
Which of the following organizations have the right to unfreeze the assets of specially designed nationals, and maintain a list of known or suspected terrorist organizations?
OFAC
What is an example of Money Laundering?
Paying for an annuity with money made from selling drugs
What is the most dangerous step in the Money Laundering process?
Placement
What is the proper sequence in the money laundering process?
Placement, Layering, Integration
Gramm-Leach Bliley Act:
Requires a financial institution to inform customers of its privacy policies.
3 Stages of Money Laundering:
Stage 1: Placement - The first stage in cleaning illicit funds is placing them in the laundering system with little or no effort to disguise their illegal origins Stage 2: Layering - The layering stage is where launderers attempt to conceal the source of the funds or assets, in order to make them harder to detect Stage 3: Integration - Integration is when illegal funds are commingled with legitimate funds. The funds would then appear to be legal from the standpoint of detection
Which of the following is the biggest threat to anti-money efforts?
Technological Advances
What must a US financial institution do if a foreign bank that maintains a correspondent account with the institution is issued a summons or subpoena by the Attorney General requesting records maintained inside or outside the US and does not comply?
Terminate the correspondent relationship no later than 10 business days after being notified in writing
The USA PATRIOT Act associated money laundering with which of the following for the first time?
Terrorism
Primary Jurisdiction for enforcing the Bank Secrecy Act lies with...
The Department of Treasury
Who is responsible for the administration of the Bank Secrecy Act?
The Financial Crimes Enforcement Network
