Use CAMS Dumps to Obtain ACAMS Certification

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April 14, 2025

If you're serious about obtaining the CAMS Certification certification, practicing with ACAMS CAMS dumps questions is a must. By doing so, you'll become familiar with the exam format, identify knowledge gaps, develop time management skills, boost your confidence, and increase your chances of success. So, start practicing CAMS exam dumps today and give yourself the best chance of passing the CAMS exam! Test free Certified Anti-Money Laundering Specialist CAMS exam dumps below.

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1. In order to demonstrate commitment to AML compliance within a bank, the Board of Directors should:

monitor the fulfilment of AML compliance duties within the bank.

keep senior management apprised of key developments in the AML regime and the impact of applicable laws and legislations.

ensure senior management maintains accountability for the effectiveness of the AML program implementation.

establish a written AML policy that contains the basic principles to be followed by staff from the top down.

2. A legal instrument that is executed between two nations and governs cross-border information sharing is known as a:

Memorandum of agreement.

Declaration of understanding.

Memorandum of understanding.

Mutual legal assistance treaty.

3. What does the Financial Action Task Force 40 Recommendations address on transparency of beneficial ownership?

Gatekeepers

Correspondent banking

Payable through accounts

Legal persons and arrangements

4. Which is the main objective when a financial institution (FI) conducts an investigation?

Keep policies and procedures updated

Keep all the documentation

Know the customer

Track the movement of the money

5. Which element is generally required of all anti-money laundering programs?

A computer-based suspicious activity monitoring system

A qualified compliance officer to manage the program

Annual in-person AML training for all employees

An enhanced due diligence program for all new customers

6. How should a financial institution deter money laundering through new accounts? Choose 3 answers

Document the identity of the party opening the account

Query owner’s names against FATF database

Determine the beneficial owner(s) of the account

Seek to determine the source of deposited funds

7. Which factors should lead to a reassessment of the current AML program? (Select Two.)

Expansion of business to new territories

Appointment of a new Chief Financial Officer

Change of company name

Change of internal audit team members

New product offering

8. Which transaction monitoring processes would alert a bank for red flag activity?

A client who does not typically make extravagant credit card purchases books an airline ticket on a travel website.

The company has a name that is similar to that of a company whose directors are named on the bank's internal blacklist.

A client makes a prepayment on their credit card and a week later makes multiple cash withdrawals using an automated teller machine (ATM) in a foreign country.

A charity account receives multiple electronic transfers and then sends a wire transfer to a higher-risk country.

9. An international bank is investigating a payment requested by a correspondent banking partner. The payment originated from a corporation located in Hong Kong, and the final beneficiary is an individual in New York. The transaction triggered an alert in the bank’s automated transaction monitoring system.

Which steps should the bank take first to address the alert? (Select Three.)

Call the receiving individual to review identity verification documents.

Confirm that neither the beneficiary nor the originator are sanctioned parties.

Request supporting documents, including invoices and contracts, to confirm the purpose of the payment.

Check for negative news in public sources on the sender and receiver.

Send a 314(b) request to the corporation’s bank in Hong Kong.

10. Money laundering can cause which consequences for a financial institution? (Select Two.)

Increases in corporate taxes

Increases in investigation costs and fines

Reduction in number of employees

Reduction or loss of profitable business

Increases in correspondent banking facilities

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11. A foreign bank maintains a correspondent account in the US. According to an investigation carried out by US authorities, the specific correspondent account seems to have facilitated a transaction involving tainted funds.

Which allows the US authorities to seize the funds of the foreign bank held with the US bank?

The FinCEN CDD Final Rule

The 6th EU AML Directive

Regulations of the OFAC, US Department of Treasury

The USA PATRIOT Act

12. An individual opened an account with a minimal cash deposit at a financial institution. He presented a foreign passport and stated he would be working locally for a few months. He also requested information about making electronic fund transfers. The institution was subsequently unable to verify the employment or residence information provided by the individual. Soon after this, a large transfer was sent to the customer's account.

Which of the following is the course of action recommended by the Basel Committee on Banking Supervision's Customer Due Diligence for Banks?

Post the deposit to the account and notify the customer that the deposit has been made.

Implement enhanced due diligence procedures to monitor the account for suspicious activity.

Close the account and return the funds to the source from which they were received.

End the relationship by sending a check (cheque) to the customer for the full amount in the account.

13. Which scenario is closest to the definition of money laundering the United Nations Convention against Transnational Organized Crime and Other Protocols provided?

Filing a suspicious transaction report when you know or suspect money laundering is taking place

Knowingly financing a resort development with the proceeds of arms trafficking

Assisting a client in a property conveyance by effecting the transfer of ownership from the seller to the purchaser when you don’t know the purchaser

Discussing your suspicions with a client, thus giving the client the opportunity to switch service providers and to cover his tracks in future transactions

14. The Office of Foreign Assets Control requirements have an extraterritorial reach because compliance is required by:

US persons in the U

intermediaries of a transaction with a US nexus.

entities registered in the U

foreign financial intelligence units.

15. Which of the following is the main reason Internet gambling is an ideal web-based money laundering method?

Ease of connection and low subscription rate with major Internet service providers.

High credibility of gambling websites.

Ability to transfer value across jurisdictions.

Large number of offshore websites located in known high-crime areas.

16. In May 2002, the Wolfsberg Principles on Private Banking were revised and included a section that prohibits the use of internal non-client accounts in a manner that would prevent officials from appropriate monitoring movements of funds or keep clients from being linked to the movement of funds on their behalf.

What is another name for these internal, non-client accounts?

Trust accounts

Correspondent accounts

Concentration accounts

Pay through accounts

17. A key element required to ensure an anti-money laundering compliance program is effectively embedded into an institution's culture is

an internal audit.

ongoing training.

peer review.

a record retention policy.

18. Money laundering has social and economic impacts, especially within developing countries. A high volume of money laundering in a country may: (Select Two.)

Reduce confidence in the country's financial sector.

Dissuade government tax incentive programs.

Lower the employment rate.

Dissuade foreign investment.

Reduce volatility in exchange and interest rates.

19. According to the Financial Action Task Force Special Recommendations on Terrorist Financing, which of the following should an anti-money laundering specialist do if the specialist has reasonable grounds to suspect funds are linked or related to terrorist acts?

Conduct a full due diligence review of the client.

Inform the institution's managing Board.

Contact the institution's legal advisor.

Promptly report to the competent authority.

20. Which three areas do FATF’s 40 recommendations cover? Choose 3 answers

International Cooperation

Prescriptive sentences for predicate offenses

Financial systems and their regulation

The criminal justice system

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21. Which of the following measures is one that the FATF recommends that Financial Institutions (FIs) and Designated Non-Financial Businesses and Professions (DNFBPs) take to mitigate risks arising from business relationships with foreign politically exposed persons (PEPs)?

Subscribe to commercial databases to assist in the detection of PEPs.

Raise transaction monitoring thresholds for PEP accounts in automated systems to account for higher transaction values and complex legal vehicles.

Require approval from the prudential regulator for entering into or continuing the business relationship.

Establish processes to understand the PEP’s source of wealth and source of funds, and to refresh that understanding regularly.

22. Before providing suspicious activity report documentation to an authorized requestor, the institution should first:

contact a local financial intelligence unit for authorization.

notify outside counsel.

de request a subpoena.

independently verify the requestor.

23. When must a United States (U.S.) bank block or reject an international funds transfer when there is an Office of Foreign Assets Control designated party to the transaction?

Only if the

bank is involved in the funds transfer

Only if a

person or entity is the ultimate beneficiary

Only if a non-

person or entity is the ultimate beneficiary

Only if the

bank’s correspondent informs it of the involvement of the designated party

24. Which of the following poses the greatest money laundering risk for a financial institution offering on-line services to customers?

There is greater difficulty in matching the customer with the provided identification doc-umentation.

There is no human scrutinizing the customer's transactions, thus increasing the potential for large transactions.

Institutions offering on-line services have no possibility to properly verify the identity of their customers.

Customers can directly access their accounts without being detected.

25. Potential indicators of money laundering associated with Trust and Company Service Providers include: (Select Two.)

use of legal persons in jurisdictions with strict secrecy laws.

structuring cash deposits into third party accounts.

multi-jurisdictional wire transfers with no legal purpose.

generation of rental income to legitimize illicit funds.

frequent deposits to or withdrawals from bank accounts.

26. Which key metric would provide the most valuable data to senior management about the effectiveness of its AML controls?

The number of money laundering alerts generated by the watchlist screening system.

The number of clients exited for commercial reasons.

The number of high-risk customers onboarded each month.

The ratio of true positives to false positives generated by the automated monitoring system.

27. Outgoing foreign transactions of similar amounts trigger a monitoring alert for a customer's

accounts. During the evaluation of the accounts, the bank discovers the wire transfers were very small amounts and occurred within the last 3 months following a long period of inactivity. The wire transfers appear to originate from legal sources. To assess the potential of terrorist financing, the institution must ensure the

account holder presents proof the funds are legal.

beneficiaries of transfers are not on a terrorist watch list.

beneficiaries of transfers are not included on the Transparency International List.

account holder does not reside in a country included on the

State Department State Sponsors of Terrorism List.

28. When using virtual assets such as Bitcoin to finance terrorism, which tactic may be used to ensure that the virtual assets are not easily seized by law enforcement?

Using self-hosted wallets to create many different donation addresses that are updated continuously

Posting donation addresses that are linked to accounts at centralized virtual asset service providers

Using the same donation address across multiple donation campaigns and media types

Forming relationships with virtual asset service providers that have strong KYC processes in place to avoid suspicion

29. The Basel Committee on Banking Supervision published guidelines on the "Sound Management of Risks Related to Money Laundering and Financing of Terrorism."

With regard to identifying and accepting customers, it recommends that banks: (Select Two.)

Establish policies and procedures for customer due diligence that vary based on risk.

Are prohibited from offering numbered accounts to customers, even if procedures are established to gather and maintain due diligence information.

Establish policies and procedures to identify and verify customers, beneficial owners, and any individuals that can transact on behalf of their customers.

Establish policies and procedures to ensure due diligence activities are identical for all customers.

Establish policies and procedures that encourage processing transactions while due diligence information is being established and verified.

30. On-line financial technologies are susceptible to money laundering risk because

Viruses significantly damage communications and commerce.

The risk of identity theft is greatly increased.

The identity of the people who conduct transactions may be unknown.

Baring staff are familiar with how this technology can be abused.

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31. Which statement regarding data privacy in AML investigations is the most accurate?

Financial Intelligence Units (FIUs) should document purposes for which personal data included on Suspicious Activity Reports (SARs) may be shared with other agencies.

Any customer that is the subject of a suspicious report filing has the right to request redaction of their personal data.

Data privacy laws prohibit information sharing between financial institutions for the purposes of AML investigations in all jurisdictions.

Organizations are required to demonstrate that customers have opted into information sharing before submitting SARs to relevant Financial Intelligence Units (FIUs).

32. Which is the first valid step in the Mutual Legal Assistance Treaties international cooperation process?

The investigator may remove the evidence collected without asking permission to do so.

The central authority of the requesting country sends a letter of request to the central authority of the other country.

An investigator from the requesting country visits the country where the information is sought and takes statements from the identified witnesses or suspects.

The central authority that receives the request sends it to a local judicial officer to find out if the information is available.

33. How should a compliance program respond to an AML audit finding?

By using the findings to identify and assess their money laundering risk

By closing the accounts that were subject to findings

By giving recommendations for each finding as part of an audit report

By nominating an independent party to implement the corrective action

34. A customer runs an export business for agricultural products. There has been steady growth over the years from sales to the Caribbean region. A sudden increase is noted in this customer's account balances during the last month.

On what grounds should an anti-money laundering specialist prepare a suspicious transaction report?

The increased activity is due to money order deposits.

Wire transfers are coming from a Financial Action Task Force member country.

The client changed his address without advising the institution.

Travelers checks (cheques) were purchased for trips to a Non-Cooperative Countries and Territories.

35. A law enforcement agency is reviewing a suspicious transaction report (STR) filed by a financial 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?

Previously filed STRs on the same customer

Account opening documents and account statements

Copies of promotional materials sent to the customer

A copy of the institution's STR policy and procedures

36. Which method to finance terrorism involves falsifying transaction-related documents?

Bribery

Black market peso exchange

Trade-based money laundering

Informal value transfer system

37. A bank in the Netherlands has been requested to share information about a series of transactions and related customers with a bank in Italy. Both banks are subject to European Union jurisdiction.

Which factor is most important to consider before the Dutch bank shares the requested information with the Italian bank?

The Dutch bank’s legal obligations to protect customer privacy and bank secrecy prohibit it from sharing any such information.

The Dutch bank should require a production order from the Italian bank and receive approval from its legal department before sharing the requested information.

The need to fight financial crime outweighs the EU’s data protection and privacy regulations.

The Dutch bank should limit any information sharing to what is necessary, reasonable, and proportionate, in line with applicable laws and regulations.

38. 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 flags that indicate money laundering? (Choose two.)

Customer redeeming all remaining chips

Playing various games before cashing out

Bringing $15,000 worth of chips into the casino

Requesting a wire transfer to an unrelated third party

39. A new customer has just been onboarded in a securities firm. After a few weeks, there are unusual trading patterns that are being flagged.

Which pattern is most concerning to the compliance officer?

The customer engages in large trading in securities that are liquid or highly priced from the trading account.

The customer's repeated trading in securities that are low priced and low volume counters.

The customer receives many incoming wire transfers from related parties to the trading account.

The customer accumulates securities of a low volume counter in small increments on a weekly basis.

40. Gatekeepers, including accountants, can be well-positioned to identify and detect changes in the type of work or the nature of a client’s activities.

In order to do so, they need to understand the risks associated with: (Select Two.)

The seasoning of accounting clients.

Corporate entity customers.

The subject matter of requested services.

Short-term client relationships.

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41. The Chief Compliance Officer (CCO) of a financial institution has been asked by a manufacturing customer reliant upon imported raw materials if there will be repercussions to his business following the weak assessment of the recent publicly issued Financial Action Task Force (FATF) Mutual Evaluation Report (MER).

How should the CCO respond?

Delayed processing of cross-border transfer of funds between countries may occur due to increased scrutiny to determine the legitimacy of each transfer.

Citing inaccurate content of the ME

the president of the country has called upon the FATF to publicly withdraw the MER and commission an independent review of findings.

Mandate termination of all cross-border trading until evidence can be provided to show an improved position of compliance for the weaknesses stated in the ME

Negative consequences will not occur because the manufacturing customer has been trading with reputable countries and suppliers for many years without incident.

42. According to the 5th EU Money Laundering Directive, member states require entities to apply enhanced customer due diligence measures with respect to business relationships or transactions involving high-risk third country nationals.

Which are included in these requirements? (Choose three.)

Obtaining the approval of senior management for establishing or continuing the business relationship

Obtaining copies of passports for all authorized persons

Establishing and verifying the address of the client

Obtaining information on the reasons for intended or performed transactions

Obtaining tax reference details for the client

Obtaining information on the source of funds and source of wealth of the customer and of the beneficial owner(s)

43. According to the Basel Committee on Banking Supervision standards, which statements best describe sound practices in relation to customer due diligence (CDD) policies and procedures? (Choose three.)

Banks should identify its customers based on a general-rules based assessment without considering the expected size and use of the account.

Banks should never allow for verification to be completed after the establishment of the business relationship since it would not be essential for the normal conduct of business.

Banks should take into consideration the occasional banking transaction or the size/level of assets to build an understanding of the customer's profile and behavior.

Banks should develop and implement clear acceptance policies and procedures to identify the types of customer that are likely to pose a higher risk of financing terrorism or money laundering.

Banks should implement enhanced due diligence measures for entering business relationships with high-risk customers, such as approval by senior management.

Banks should use CDD procedures based in another bank's standards when subject to the same criteria for handling funds of a shared customer.

44. Who bears the ultimate responsibility for approving a financial institution's relationship with a politically exposed person?

Relationship manager

Enhanced due diligence compliance officer

OKYC analyst

Senior management

45. What is the first step that an investigator should take when beginning a financial investigation into a potential suspicious activity?

Contacting the country's financial intelligence unit (FIU) officers to seek advice on whether the potential suspicious activity is indeed suspicious.

Determining whether the potential suspicious activity is consistent with the customer's transactional behavior, nature of business, and occupation.

Gathering and assessing internal sources of information, including information obtained from the customer, transactions, and value and volume.

Identifying and reviewing external information, including online presence, customer-related entities, and relevant media.

46. A client opens a bank account for a multi-level marketing company. The debits and credits of the account are numerous and very involved. Further, there are a lot of international transactions. Also, funds are being tunneled from the company to the client’s personal account in another jurisdiction.

Which two steps should law enforcement take in investigating this matter? (Choose two.)

Determine who are the signatories on the account

Ask the bank for the history of this multi-level marketing company

Examine the flow of money from the company to the individual in an effort to determine if it is legitimate

Examine possible Suspicious Activity Report information received from the local Financial Intelligence Units

47. Which is the most severe consequence for a financial institution if the regulator finds it is in breach of AML regulatory obligations?

Loss of license

Civil sanctions

Monetary fines

Negative reputation

48. The AML investigator is reviewing the transaction monitoring alerts and the customer's historical profile for the past two years. A review of the negative news search from a blog indicates that the customer was previously part of a terrorist group.

Which activities warrant further escalation? (Select Two.)

The customer remitted monies in several transactions to the account of a recognized charity non-profit organization.

The customer has bought and sold several real estate properties over the last year.

The credit transactions in the account relate mostly to salary and rental income from property.

The account received a large cash deposit followed by systematic automated teller machine (ATM) withdrawals until the balance was nominal.

The customer conducts multiple cash transactions on a regular basis which do not match the customer's occupation.

49. Which risk factors are considered when assessing risk rating of customers? (Select Three.)

Customer risk

Geographic risk

Product risk

Credit risk

Fraud risk

Employment risk

50. Law enforcement is conducting an investigation of a financial institution (FI) and has submitted an overly broad and unduly intrusive request.

Which is a Fl's most appropriate response?

Ignore the request due to the unacceptable volume of information contained within.

Contest the request with the company's board of directors and key senior management.

Delay a response until all documents can be gathered regardless of the duration.

Narrow the request through a prompt response to the law enforcement agency.

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51. When performing a risk assessment, which factors should be considered when identifying and measuring risk? (Choose two.)

Customer composition

Financial performance

Product offerings

Regulatory environment

Company culture

52. A suspicious transaction report has been filed on an account owned by the wife of the bank’s ChiefExecutive Officer.

Which of the following is the most important consideration when deciding whether to recommend closing the account?

The institution’s anti-money laundering policy

Requests from the competent authority

Customer relations

Chief Executive’s reputational risk

53. In which two ways does a government Financial Intelligence Unit interact with public and private sectors? (Choose two.)

It governs the methods of investigation used by competent authorities

It mediates disputes between financial institutions and investigative authorities

It receives and analyzes disclosures filed by financial and non-bank institutions

It disseminates information and the results of its analysis to competent authorities

54. Which action does the Financial Action Task Force (FATF) recommend be taken against jurisdictions that have strategic deficiencies?

Conduct due diligence

Apply counter-measures

Add the jurisdiction to the United Nations’ list of sanctioned jurisdictions

Create an action plan to address the deficiencies without the support of the FATF

55. A new business opened an account at a bank. After a month of activity, the account is referred to AML Investigations for potential human trafficking activity.

Which red flags most likely triggered the referral? (Select Two.)

Trade in large volumes conducted with countries that are part of the diamond pipeline

Several cash deposits along the country's border that are quickly withdrawn by third parties _ Multiple purchases of virtual currency at or just below the reporting threshold

Several lodging and food payments made on the same day at unusual hours for a business

Conducting the businesses transactions online without visiting a branch

56. A Trust and Company Service Provider (TCSP) providing services should have policies and procedures in place to identify critical information of the:

general manager.

signatory.

controller.

registered address.

57. What action does the USA PATRIOT Act allow the US government to take regarding financial institutions (FIs) that are based outside of the US?

Sanction a country when an individual Fl does not comply with US law.

Subpoena documents from FIs that have no presence in the U

Revoke the banking licenses of non-US FIs in countries outside the U

Allow all US regulators to place a non-US Fl on the Specially Designated Nationals and Blocked Persons List.

58. A non-U.S. bank asks its U.S. correspondent whether there is risk of having funds seized in their correspondent account if a customer is involved in a predicate offense. The correspondent bank's reply should be,

"No, only

accounts for

citizens can be seized and forfeited by the competent authority."

"No, only correspondent accounts of

banks can be seized and forfeited by govern-ment agencies."

"Yes, if it is suspected that money laundering has occurred solely in the

"Yes, also if the customer's account is used in a country other than the

by suspected money launderers."

59. In accordance with Financial Action Task Force (FATF) standards, when the minimum AML requirements of the host country where a financial institution (Fl) operates are less strict than those of the Fl's home country, the Fl:

should always apply additional measures on their branches and majority-owned subsidiaries in host countries to manage the money laundering and terrorist financing risk overseas.

is required to ensure that their branches and majority-owned subsidiaries in host countries implement the requirements of the home country, to the extent that host country laws and regulations permit.

is required to impose more strict requirements on host country branches, disregarding if host country laws and regulation permit such action.

should close down its operations in the host countries where minimum AML requirements are less strict than those of the home country.

60. Which insurance product is particularly vulnerable to money laundering?

Annuity

Casualty

Collateral

Regulated pension

Page 7 of 24

61. What is an example of the integration stage of money laundering involving a bank or another deposit-taking institution?

Depositing illicit funds into an account set up for a front company

Directing third parties to exchange illicit cash for negotiable instruments

Wiring illicit funds from an account at one bank to an account at another bank

Using illicit funds that had previously been deposited to purchase a luxury vehicle

62. A precious metals dealer opens a new account with a bank.

Which requires a referral to AML Investigations for further review?

International outgoing wires to diamond dealers that are part of the diamond pipeline.

Payments received on the account reference unknown companies in the instructions.

International incoming payments from foreign companies in which the precious metals dealer has an established relationship.

Multiple daily point of sale transactions from third parties that appear to be individuals.

63. Which are social/economic consequences of money laundering? (Choose two.)

Civil war

Weakening financial institutions

Increase in corruption and organized crime

Increase in tax revenue

Weakening of the country's infrastructure

64. Which step should be taken to understand the types of financial institutions to whom the services are being offered when a correspondent bank permits “nested” relationships according to the Wolfsberg Group?

Review peer-group clients by risk category

Understand the type and volume of accounts serviced

Evaluate the distribution of downstream correspondents and identify any direct or indirect issues

Obtain independent audits or examination reports for “nested” relationships to determine risk levels

65. An anti-money laundering expert is hired by a new Internet bank to assess the money laundering threat to the bank. Because it is an o line bank the most important recommendation for the expert to make is that the bank

limit the amount which can be processed per transaction.

ensure that prospective new customers can be properly identified.

set up automated programs to analyze transaction for money laundering activity.

ensure that a firewall is set up to protect the transactions.

66. The recommended way lot a financial institution to respond to a request from a law enforcement agency is to:

train all staff to enable them to respond to subpoenas.

hand over documents that are protected by attorney-client privilege

freeze the identified account immediately

have an audit trail system to produce requested documentation

67. Which is a key aspect in the FATF Recommendations that best describes the essential foundation for allocating resources in AML/CFT regimes for countries and financial institutions (FIs)?

Implementing targeted financial sanctions

Performing country peer-to-peer evaluations

Enforcing mutual legal assistance

Applying a risk-based approach

68. Which three statements are true about on-line banking offering a significant money laundering risk to a financial institution?

The nature of on-line banking can make it difficult to establish who is controlling the account

The ease of access through the internet enables cross border movement of funds

Due to client confidentiality, information collected on-line cannot be shared with law enforcement agencies on mere suspicion

The speed of electronic transaction enables execution of multiple complex transactions within short time frame

69. The obligation to freeze funds involved in suspicious transactions.

1, 2, and 3 only

1, 2, and 4 only

1, 3, and 4 only

2, 3, and 4 only

70. What is a key risk associated with Correspondent Accounts according to the Basel Customer Due Diligence paper?

It is not used on a daily basis

The service fees are insufficient to cover the cost of managing the account

The respondent bank’s customer acceptance and know your customer policies are ineffective

The volume and value of transactions passing through the account may not be in line with the original correspondent agreement

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71. Sanctions screening requirements include that a financial institution should:

report an individual whose name appears on a sanctions list to the police.

immediately freeze the bank account of an individual that appears on a sanctions list.

compare customer and transaction records against periodically updated sanctions lists provided by governmental bodies.

immediately close the bank account of an entity who appears on a sanctions list.

72. 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 filed as a result of a future transaction.

What action should the employee take?

Report the conversation to the local police

Report the conversation to the compliance officer

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

73. OFAC-issued regulations apply to which entities? (Choose two.)

Intermediaries transacting with US banks

Foreign banks with US customers

Foreign subsidiaries of US banks

US branches of a foreign bank

Foreign import-export companies

74. 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 retained for at least five years

It must be retained for at least seven years

It must be kept in a manner so that it can be provided promptly

It must only be released to the government through a subpoena process

75. Using the customer profile and expected activity information, a financial institution should be able to identify transactions that are difficult to:

make economic sense

make viable profitability.

be strategically viable.

cross verify.

76. According to Basel Committee guidelines, which level of the organization should determine whether or not to enter business relationships with higher risk customers?

First-level management

Senior management

Account opening staff

Middle management

77. An AML compliance officer receives notice of government update including the names of the latest terrorists sanctioned by the United Nations Security Council.

Which would be the most appropriate step to take?

Notify the Board of Directors

Update the monitoring software containing sanctioned persons

Inform the customers that their funds will be frozen

Update training information to include the latest names

78. When assessing and managing money laundering risks while operating in foreign jurisdictions different from that of the head office, an effective AML monitoring program should:

provide all foreign jurisdiction reports to the head office for approval.

be tailored to the higher of standards between the jurisdictions.

be consistent with the head office audits.

conform to the foreign jurisdiction policies to align with the head office policies.

79. Which of the following are included in the 11 Immediate Outcomes outlined in the Financial Action Task Force (FATF) methodology for assessing technical compliance with the FATF Recommendations and the effectiveness of AML/CFT/CPF systems during mutual evaluations? (Select Three.)

International cooperation provides actionable information to use against criminals.

Supervisors regulate financial institutions and non-bank financial institutions and their risk-based AML/CFT programs.

Financial intelligence information is collected by authorities and shared with the FATF for further investigation.

Those convicted of money laundering offenses are denied access to basic banking services.

Money laundering offenses are investigated and criminally prosecuted.

80. Which type of sanctions are likely to be used first in order to avoid escalating violent conflicts and/or proliferation of weapons?

Asset freeze

Financial prohibitions

Export and import restrictions

Arms and related materials embargo

Page 9 of 24

81. Which changes at a financial institution (FI) should trigger an enterprise-wide reassessment of its inherent AML risk exposure? (Select Three.)

Introduction of new products or services.

Restructuring of the FI’s risk and compliance functions.

Changes in the individuals overseeing the FI's product lines and sales strategies.

Use of new technologies for delivering existing products.

Mergers or acquisitions.

82. When should a financial institution (FI) exit a relationship? (Choose two.)

The reputational risk to the FI posed by closing the account

The request from law enforcement to close the account

The FI's requirements for opening an account

The suspicious conduct of the account holder

The FI's stated policies and procedures for closing an account

83. Law enforcement is confidentially investigating 20 individuals suspected of belonging to a criminal network allegedly involved in laundering tens of millions of euros for cybercriminals.

Which actions need to be taken by the AML Specialist at a bank upon learning the alert? (Select Two.)

Involve the bank's legal and compliance function to address the gravity of the matter.

Perform a search on the bank's client data platform to determine if the bank has had any business with the named individuals.

N Send out an email to all of the bank's client advisors to request information on any of the individuals.

Report findings back to law enforcement only if they are of any significance.

Respond to law enforcement that their request without a judicial order would breach the bank's General Data Protection Regulation duty with respect to its clients.

84. The Financial Action Task Force recommends the incorporation of some measures in customer due diligence programs including:

identifying the number of beneficial owners without the verification of their true identity.

conducting the risk assessment of products and services.

conducting ongoing due diligence on the business relationship and monitoring of transactions.

identifying the products and services and their suitability to customers.

85. Identify a person fully, including their political history.

1, 2, and 3 only

1, 2, and 4 only

1, 3, and 4 only

2, 3, and 4 only

86. A financial institution's (Fl's) policy is to apply enhanced due diligence (EDD) for every new client to ensure the effectiveness of the program.

How should a consultant advise the Fl's management team?

Suggest the management team select the clients that are chosen for ED

Suggest the management team ask the regulator for advice on EDD measures.

Suggest EDD for 50% of the clients is appropriate.

Suggest the FI needs to implement a risk-based approach for ED

87. According to the Financial Action Task Force, financial institutions should exit the relationship with a client in which case?

The client refuses to update information.

There is a change in ownership structure.

The client is a politically exposed person.

The country of incorporation has been elevated to high-risk.

88. An AML/CFT unit often compiles information about customer activity and product usage that might be of interest to other parts of the organization.

Before allowing the unit to communicate such information internally, the organization must review:

Applicable data privacy laws in relevant jurisdictions and the organization’s data security and privacy policies for any limitations.

Enterprise-wide risk assessments and the employee handbook for any limitations on sharing commercially sensitive customer data.

The risk rating of the customers to avoid sharing data relating to higher-risk customers.

The organization’s AML compliance policies to ensure that customer data can be easily shared internally and internationally.

89. The Basel Committee on Banking Supervision issued a paper in October 2001 in which it presented a Know Your Customer framework and recommended standards applicable to

Offshore banking supervisors.

Financial Intelligence Units.

banks in all countries.

European Financial Institutions.

90. A European Union (EU) bank has a correspondent banking relationship with a U.S. bank. Under USA PATRIOT Act Section 311, the U.S. government has enacted special measures against a designated entity that has a payable-through account with the EU bank.

Which of the following actions might the U.S. bank be required to take regarding the EU bank's services for the designated entity?

Ensure the designated entity's confidential information is not shared with other entities.

Obtain additional information about customers permitted to use this account.

Verify that the EU bank serves the designated entity.

Perform enhanced due diligence on the EU bank.

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91. A law enforcement agency submits several requests to a financial institution.

Which request is

legitimate and requires the bank to respond?

Freeze an account in terms of a court order.

Keep an account open upon verbal request.

Seize privileged documents upon written request.

Produce documents and testimony without a subpoena.

92. How can violations of anti-money laundering laws be a risk to individuals?

Violations can result in civil and criminal fines and penalties against the individuals.

Violations can result in additional legislation that the individuals have to comply with.

Violations can result in enforcement actions that damage the reputation of the individual’s employer.

Violations can result in additional and more stringent anti-money laundering training for individuals.

93. A comprehensive set of risk-based guidelines for maintaining business relationships is being developed.

Which situation indicates that the institution should terminate the relationship with a client?

The client does business in countries with active terrorist organizations.

The client conducts international financial transactions exceeding

$500 million.

The client exceeds the criteria of an acceptable risk model created by another institution that is not similar in size and complexity.

The client exceeds the criteria of an acceptable risk model created by the institution and does not perform acceptable remedial actions.

94. A bank’s anti-money laundering section receives an anonymous tip that a customer might be engaging in possible money laundering.

Which two facts should be considered during the course of an investigation into this matter? (Choose two.)

The customer has had a long-standing account at the bank

The customer in on the exempt list for currency transaction reporting requirements

The customer is issuing a number of wires to several relatively high-risk jurisdictions

The customer’s account has had a large volume of activity, but the month-end balance is usually low

95. Which three criteria does a shell bank meet according to the Wolfsberg Principles on Correspondent Banking? Choose 3 answers.

It does not conduct business at a fixed address in a jurisdiction in which it is authorized to conduct business.

It does not employ one or more individuals at its fixed address where it is authorized to conduct business or maintain operating records at that address

It is not subject to AML laws that require it to implement an AML program

It is not subject to inspection by the banking authority that licensed it to conduct banking activities

96. A compliance officer provides an overview of the bank’s anti-money laundering program to a group of new tellers during employee orientation.

Which training element should be delivered to this audience?

Results of recent risk assessments

Large cash transaction reporting procedures

The financial institution’s surprise cash audit policy

Past check fraud losses incurred by the financial institution

97. A U.S. bank recently received a regulatory order to remediate its AML programs, which included several violations of law.

What degree of accountability is it possible for the bank’s senior management and employees to face?

The bank’s designated AML compliance officer and senior management may face personal liability if they failed to take actions while aware of AML violations at the bank.

The bank’s designated AML compliance officer is likely to face criminal prosecution because the bank received a regulatory order.

The bank’s designated AML compliance officer is the only individual in the company’s senior management team that can face personal liability for violation of AML laws.

The bank’s designated AML compliance officer and senior management can face civil prosecution but not criminal prosecution for violation of AML laws.

98. Which two channels can be utilized during a cross-border money laundering investigation to assist in gathering information according to Financial Action Task Force? (Choose two.)

Contacting existing liaison officers in the foreign jurisdiction

Exchanging information between national law enforcement agencies

Contacting the potential suspect or their family members to request information

Submitting only formal requests for information to a financial intelligence unit

99. A compliance officer was recently reviewing transactional data for an international charity and found transactions that present a higher risk.

Which reason is cause for terminating the banking relationship?

The charity has had a high a high turnover rate of official positions

The charity has several incoming international funds transfers

The flow of funds both in and out are complex and hard to trace

The charity is headquartered in a country on the Office of Foreign Assets Control list

100. A high volume of incoming wire transfers generates an alert about a client. The funds are

immediately debited by cash withdrawals and outgoing wire transfers.

Which information should be reviewed first to investigate this alert/case?

Customer profile

Adverse media search

Account activity

Open source information

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101. A bank has opened a new account for a well-known attorney to manage client funds. During the first six months, bank staff observe the account receives multiple deposits via wire transfer. They also observe that the attorney withdraws cash, makes payments to various people, and transfers funds to the law firm’s account online.

What is considered a red flag for potential money laundering in this situation?

Withdrawing cash

Making payment to various people

Receiving multiple deposits via wire transfer

Transferring funds to his law firm’s account online

102. How does the Financial Action Task Force (FAT F) measure the effectiveness of a country's efforts to combat money laundering and terrorist financing?

Mutual evaluation

FATF Evaluation Committee

Basel Committee

Series of internal audits followed by reporting to FATF

103. Which statements relate to the role of financial intelligence units (FIUs) in combatting financial crime on a national and international level? (Select Three.)

FIUs can only engage in cross-border collaboration where there exists a reasonable suspicion that is confirmed by a court-issued document.

FIUs are legally empowered to use a wide range of investigative techniques, both in the public and in the private sector.

FIUs use a limited range of investigative techniques.

FIUs have a broad range of financial information to assess suspicious activity alerts.

FIUs can only command data and information requests from public sector entities.

FIUs are able to cooperate both with foreign counterparts and national institutions.

104. The Egmont Group is a world wide organization of

banking regulators.

financial intelligence units.

law enforcement authorities.

central banks.

105. Normal account-opening procedures reveal a customer who contacted a financial institution to open a bank account is the brother of a prominent member of a foreign judiciary.

Which of the following actions should the anti-money laundering specialist recommend immediately?

Monitor the customer's account.

Perform enhanced due diligence.

File a suspicious transaction report with the competent authority.

Contact the institution's legal advisor.

106. A bank compliance officer discovers cash deposit activity inconsistent with the expected and historical cash activity within the personal accounts of the chairman of the board. The cash activity appears structured to avoid the local legal filing requirements for large cash transactions, and a suspicious transaction report (STR) was filed.

How should the compliance officer report the filing of the STR to the board of directors without revealing the existence of the filing to the subject?

Inform the legal counsel of the bank

Follow the financial institution’s established STR reporting policy

Notify the financial institution’s regulator to disclose the activity

The compliance officer and the chief executive officer should jointly interview the chairman

107. The owner of a local retail store makes multiple deposits daily at a bank. When the owner makes these deposits, it is noted that he goes to different tellers (cashiers). The deposits consist of cash in amounts less than the currency reporting threshold.

Which of the following best describes this activity?

layering

structuring

integration

commingling

108. An anti-money laundering specialist has been asked to create internal anti-money laundering policies, procedures and controls for a recently chartered offshore financial institution.

Which three should be included? Choose 3 answers

Basel Committee on Banking Supervision’s capital adequacy requirements for the host country

A training program for senior management and staff

An anti-money laundering compliance program, internal audit program, and procedure manual

Compliance requirement of host and charting countries

109. What are three potential issues for foreign financial institutions maintaining correspondent accounts with U.S. banks under the Patriot Act? Choose 3 answers

Cancellation of correspondent banking relationships

Forfeiture of funds in a

interbank account

Prohibition of correspondent accounts for shell banks

residents maintaining private banking accounts

110. What is the term for trading through multiple accounts, where an individual generates offsetting profits and losses and transfers of positions through accounts that do not appear to be commonly controlled?

Ponzi scheme

Market Manipulation

Net Trading

Wash Trading

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111. The most important anti-money laundering issue associated with on-line banking is accurately

Capturing data

Analyzing data

Identifying clients

Generating reports

112. A bank received a subpoena regarding one of its clients. The financial intelligence unit of the bank should review the subpoena and:

adjust the client's risk score and close the case.

file a suspicious activity report (SAR), including the receipt of the subpoena in the SAR narrative.

close the client's account by informing the client of the subpoena.

perform a transaction review and respond fully to the subpoena.

113. Three individuals enter a casino and use cash to purchase chips worth 20,000 USD. The trio uses 200 USD in chips to play games and then combine their funds to request a casino cheque.

What is the potential red flag that alludes to money laundering?

The trio purchased the chips with cash and proceeded to gamble.

The trio engage in minimal gambling and combine the funds to request a casino cheque for the chips presented.

The trio uses chips worth 200 USD to gamble before requesting the refund.

The trio purchased chips worth 20,000 USD and requested a casino cheque for the remaining chips.

114. Which unusual or suspicious activity by a financial institution's (FI's) employee requires additional investigation and scrutiny?

The employee avoids taking periodic vacations despite having accrued vacation time.

The employee assists with transactions of a disclosed ultimate beneficiary.

The employee lives a lavish lifestyle within their means.

The employee is involved in a minimal number of unresolved exceptions.

115. 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 flags that may indicate money laundering? (Choose two.)

The bank allows cash deposits

The client resides in a high-risk jurisdiction

Wire transfers are to high-risk jurisdiction

Large cash deposits are from a high-risk jurisdiction

116. A compliance officer at a small community bank has been asked to review existing customer onboarding policies and procedures to ensure they adequately address anti-money laundering risks.

How should customer due diligence be implemented?

With an annual compliance review and approval of customers

With a one-time event conducted at initial customer onboarding

As an ongoing activity that may vary commensurate with the risk profile of the customer

As applicable to customers that pose higher money laundering or terrorist financing risk

117. A startup virtual currency exchange has registered as a money services business and will commence operations in six months. The company will provide digital wallets to customers to hold their virtual currency after purchase. Customers will have the option to conduct purchases of the virtual currency and transfer the currency to and from the digital wallet. The startup must develop an anti-money laundering compliance program prior to launch.

Which two anti-money laundering responsibilities should be considered before business launch? (Choose two.)

A customer onboarding process

Transaction limits consistent with risk appetite

Employees to handle complaints in a timely fashion

Mechanisms to monitor and protect customers’ digital wallets from cyber-attacks

118. 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 figure is a PEP

Reviewing when a relationship is established

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

119. What is a tool governments and multi-national bodies can use to prevent the proliferation of weapons of mass destruction?

Economic Sanctions

Commission Rogatoire

Account Monitoring Order

Mutual Legal Assistance Treaties

120. A customer has held an account at a local credit institution for 10 years. The account has received deposits twice weekly for the same amount and has never shown signs of suspect behavior. Monitoring software indicated that in the past few months the account has received several large deposits that were not in line with the account history.

When asked, the customer states she recently sold a piece of property, which is supported with a proof of sale.

Which of the following should the compliance officer do next?

Investigate these unusual transactions further.

Contact the local Financial Intelligence Unit for advice.

File a suspicious transaction report with the competent authorities.

Document reasons for not filing a suspicious transaction report.

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121. Which information should be gathered as part of enhanced due diligence (EDD) for a high-risk customer?

Explanations for changes in marital status

Details on individuals with control over the account

Plans for traveling in business trips

Personal references

122. In its paper. Customer Due Diligence for Banks, the Basel Committee on Banking Supervision identified which risks on banking institutions as a result of an inadequate KYC program?

Outsourcing, legal, concentration, reputational

Security, information, local, operational

Legal, reputational, operational, concentration

Credit, operational, market, concentration

123. According to the Financial Action Task Force, financial institutions should be required to implement:

special procedures for encryption of information to be exchanged with affiliates and branches.

independent AML programs to ensure privacy and safeguard confidential information.

a process to designate an officer at a senior level who ensures a safe exchange of information for AML and terrorism financing purposes.

group-wide programs, including policies and procedures regarding AML compliance.

124. An anti-money laundering specialist working at a bank just received a legal request from a law enforcement agency mandating the release of all financial transaction records relating to an account at the bank. The specialist immediately recognizes the account as one owned by the bank Chief Executive Officers brother. During research to gather the requested documents, the specialist finds several internal memos he had sent to the bank president with concerns regarding possible suspicious activity relating to this account. The specialist recalls the bank president verbally responded to each memo with an explanation of the activity and indicated there was no cause for concern.

What should the specialist do with respect to these internal memos?

Place these memos in his personal files in case they are subsequently requested

Ask the bank president to document his instructions to the specialist

Call the law enforcement agent and suggest he modify the legal request to include these memos

Advise the bank’s senior legal advisor of the situation

125. Which two actions should Financial Intelligence Units (FIUs) take when submitting a request to another FIU? (Choose two.)

Send the same request to all FIUs

Disclose the reason and purpose for the request

Provide feedback on how the information was used

Make best efforts to provide complete and factual information

126. According to Basel Committee on Banking Supervision's Customer Due Diligence for Banks, which of the following should provide an evaluation of a bank's policies and procedures independent from its management?

The credit risk department

The Board

A peer institution

The compliance function

127. 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 were disclosed to include cash letters, money orders and international remittance transfers.

Which red flag identifies a heightened money laundering risk?

Expected activity was advised to include cash letter and money orders

The nature and purpose of the business include international remittance transfers

The names provided at account opening are identified as the corporation’s representative nominees

Account signer’s government issued identification lists addresses outside of where the branch account was opened

128. What poses the greatest money laundering risk for a financial institution offering on-line services to customers?

There is a greater difficulty in matching the customer with the provided identification documentation

There is a lack of human review of the customer’s transactions

Institutions offering on-line services have no possibility to properly verify the identity of their customers

Customers have direct access to their accounts without being detected

129. AML training programs should extend beyond basic concepts to deliver targeted training by:

A. offering internal policies training, such as customer identification and verification procedures and policies.

B. offering general background and history training pertaining to money laundering controls.

C. offering periodic refresher training on AML bases (usually annually) for existing employees.

D. offering appropriate training tailored to the individual's specific roles, such as alerts for investigators and suspicious activity report writers.

130. Which of the following activities are considered money laundering red flags when reviewing business operations of a money services business (MSB)? (Select Two.)

A customer exchanging foreign currency from a higher-risk jurisdiction for domestic currency under the reporting threshold.

Cash-intensive businesses, such as convenience stores or restaurants, making large cash deposits.

A customer completing frequent small-dollar international money transfers to their native country.

A customer being hesitant to provide beneficiary name or address information when sending international wire transfers.

A customer using multiple accounts under different names to conduct transactions.

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131. An AML training program should include which requirement?

New tellers should receive training after their first year on the identification of suspicious or unusual activity.

New lending staff should receive annual training on the preparation of currency transaction reporting.

New staff should receive training during employee orientation or shortly thereafter on bank procedures.

New operational staff should receive training shortly after hire on currency transaction reporting exemptions.

132. A politically exposed person (PEP) maintains an account at a bank. Last month a money laundering

analyst filed a suspicious transaction report about unusual wire deposits originated by unknown individuals in the home country of the official.

To whom should this situation be escalated?

The board of directors

The line of business executive

The bank’s anti-money laundering officer

The Financial Action Task Force’s PEP Hotline

133. Which of the following indicates potential money laundering activity by a lawyer?

A lawyer’s trust account regularly receives wire transfers from unknown remitters from a higher-risk country and immediately transfers the same amount of funds to a known beneficiary's account in a low-risk country.

A lawyer located in a higher-risk country deposits their firm’s bank draft issued from their trust account to another lawyer’s trust account located in a low-risk country for legal services rendered.

A lawyer’s trust account receives a large-value wire transfer from a regulated insurance company and immediately transfers the same amount of funds received to the beneficiary’s bank account in a low-risk country.

A lawyer’s trust account receives a large wire transfer deposit from a client that wanted to purchase a piece of property and then transfers the same amount to the property seller’s lawyer’s trust account.

134. A remittance company received a money order from a senior political figure m the Philippines to transfer a large sum of money to a charity group in the Philippines. A review of the charity group revealed a director having dose ties with a known terrorist group primarily financed through kidnapping and extortion.

What is a key risk indicator associated with terrorism financing?

The sender is a Political Exposed Person (PEP) and should be subject to enhanced due diligence

A large sum sent by money order to a charity

There is no risk relating of terrorism financing when the charity group is operating legitimately in that country

There is a link between the charity group and a known terrorist group

135. Historically, a tour guide has made monthly cash deposits averaging $10,000. Over the past three months, the monthly deposits have averaged $100,000. When the financial institution the increased deposits, the tour guide explains that there have been numerous conventions in town so business has increased substantially.

Which further action(s) should the financial institution take?

Immediately terminate the relationship

Schedule a periodic review of activity

Perform further investigation, it appropriate report the activity to the authorities and consider terminating the relationship

Perform further investigation, if appropriate report the activity to the authorities and place a limit on future transactions

136. Which practices should financial institutions (FIs) adopt for the process of terminating customer relationships? (Select Three.)

Utilizing a flexible communication style that adapts to different customer situations during the termination process.

Implementing a standardized procedure for customer termination that includes risk assessments and necessary documentation.

Performing a final review of a customer's transaction history and records to address any unresolved issues prior to termination.

Keeping records of the termination process, including the justification for the decision and any correspondence with the customer.

Notifying the customer of the termination decision only after completing the termination process to prevent possible disputes.

137. A UK national has accounts with a bank in Belgium, who maintains a branch in New York. The UK national has been recently added and screened against the Office of Foreign Assets Control (OFAC) Specially Designated Nationals and Blocked Persons List.

Which action should the Belgian bank take?

Allow all transactions up to the limit imposed by OFAC and report the transactions to the local financial intelligence unit.

Freeze the assets of the customer and report to OFA

Close the account and ask the customer to send the funds to a bank account in the U

Continue performing transactions as the bank's headquarters is in Belgium.

138. What are the European Union Directives on Money Laundering?

They are voluntary codes of best practice for the financial sector

They are written by the Wolfsberg Group

They require members to implement certain laws of prevent money laundering

They require financial institutions to report suspicious activity to the Egmont Group in Brussels

139. How can awareness be raised within countries that do not have sanctions regulatory regimes? (Select Two.)

Restrict trade between countries that have robust AML/CFT and sanctions regulatory regimes and those that do not.

AFC (Anti-Financial Crime) and sanctions-related seminars, webinars, and training within these countries.

Enforcement and pecuniary fines against these countries.

Bilateral conversations and cooperation between governments.

140. A bank receives an anonymous tip from an employee about another employee through its confidential hotline.

Which activity warrants further review?

A mortgage officer works with home loan applicants to resolve adverse credit issues

An employee in bookkeeping accepts funds transfer requests from customers via telephone

An employee in accounting works with customers to help understand how to reduce service charges

A teller distributes bank brochures to customers who regularly conduct cash transactions below reporting limits

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141. What is a core function of a Financial Intelligence Unit (FIU) as described in FATF Recommendation 29?

Serving as a national center for the collection and analysis of suspicious activity.

Prosecuting significant cases of money laundering or terrorist financing under national jurisdiction.

Sponsoring the research and development of advanced technological surveillance tools for AML investigations.

Sharing real-time criminal intelligence gathered from national law enforcement agencies with the private sector.

142. The manager of a bank’s KYC team discovers that a high-risk customer’s activity was not reviewed last quarter as required by the bank’s internal compliance schedule.

What should the KYC team manager do?

Submit a referral to file a Suspicious Activity Report (SAR).

Remove the customer from the bank’s high-risk list.

Contact the customer’s relationship manager to suspend account access until the periodic KYC review is completed.

Evaluate the KYC review process to understand why the review did not occur as required and take corrective action as necessary.

143. Which type of formal agreement occurs between countries that wish to aid each other in the investigation and enforcement of criminal laws?

Joint Comprehensive Peace Agreement

Mutual Legal Assistance Treaty

Foreign Information Exchange

Inter-country Agreement to Combat Trafficking

144. A bank teller receives a written request from a police officer to review a previous customer's account on a pre-populated form with the officer's official letter head. The officer suspects the previous

customer is engaging in smurfing.

Which action should the bank teller perform?

Provide the police officer information after AML compliance approval.

Reject the request and escalate to the compliance officer.

Provide the police officer information after management approval.

Escalate the request to the compliance officer.

145. To ensure that an institution’s anti-money laundering program is current, which step should be taken?

The program should be evaluated and updated at least every six months be the Board of Directors

The program should be reviews by a federal law enforcement officer for gaps in controls

The program should be sent to the institution’s government regulator on a periodic basis

The program should be reassessed at least annually

146. The new compliance officer has reviewed the bank’s anti-money laundering training program. The program consists of online training for all new employees within 30 days of hire date and annual refresher training to all employees. In addition, there is specialized training for areas that deal with higher risk products and customers.

Over the last year, there have been no regulatory changes and no new products or services have been introduced. The compliance officer wants to propose to the board of directors that the annual refresher training is still current and can be delivered unchanged to all employees.

Which two critical pieces of information could be missed by taking this approach? (Choose two.)

Any new trends, developments, or risks

Results of the previous year’s risk assessment

Changes to internal policies, procedures, and processes

Links to enforcement actions identifying violations in other financial institutions

147. A U.S. bank recently received a regulatory order to remediate its AML programs, which included several violations of law.

What degree of accountability is it possible for the bank’s senior management and employees to face?

The bank’s designated AML compliance officer and senior management may face personal liability if they failed to take actions while aware of AML violations at the bank.

The bank’s designated AML compliance officer is likely to face criminal prosecution because the bank received a regulatory order.

The bank’s designated AML compliance officer is the only individual in the company’s senior management team that can face personal liability for violation of AML laws.

The bank’s designated AML compliance officer and senior management can face civil prosecution but not criminal prosecution for violation of AML laws.

148. A typical red flag regarding potential money laundering in connection with an art purchase occurs when a customer:

buys a painting as an anonymous bidder and provides the source of wealth.

asks to pay in installments and pays from two differently named accounts.

asks to pay a large amount in cash without a comprehensible reason.

pays more at an auction for a painting than the estimated maximum price.

149. Which section of the USA PATRIOT Act relates to forfeiture of funds and allows for extraterritorial reach?

Section 319(a)

Section 314(a)

Section 319(b)

Section 314(b)

150. An automotive parts company in South America sends multiple $500,000 wire transfers per week to ABC Holdings Ltd. in Asia referencing payment for silk flower shipments. Research reveals Sunrise Holdings, Ltd is registered in the British Virgin Islands with no available ownership information.

What are two red flags that indicate how trade-based money laundering could be occurring in this instance? (Choose two.)

The transaction involves the use of front (or shell) companies

The packaging is inconsistent with the commodity or shipping method

Significant discrepancies appear between the description of the commodity on the bill of lading and the invoice

The type of commodity being shipped appears inconsistent with the exporter or importer’s regular business activities

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151. A law enforcement official calls a bank inquiring about a customer who is currently under investigation. The law enforcement official requests information about the customer.

How should the bank respond?

Confirm the customer is either a current or former customer

Inform the board of directors before responding to the request

Provide the requested information to help aid in the investigation

Request a formal letter be submitted to verify the validity of the request

152. When deficiencies are identified in the Financial Action Task Force (FATF) mutual evaluation report, the assessed country needs to:

address the shortcomings identified in the report and agree to post-assessment monitoring by FAT

request exception from the relevant FATF-style regional body by submitting a report with the reasons.

pay a penalty for the delay in adopting the FATF 40 recommendations accurately and timely.

prepare a report to defend its position against the FATF secretariat, which is comprised of the assessors.

153. A client has retained a lawyer to create a financial holding company. The lawyer resides in Europe. The client provides all requested documentation to the lawyer. However, the lawyer becomes suspicious that the customer is engaged in criminal activity and intends to use the financial holding company for money laundering purposes.

Which of the following should an anti-money laundering specialist recommend according to the European Union Money Laundering Directives?

There is no need to file a suspicious transaction report, as this activity is covered by attor-ney-client privilege.

Freeze the client's assets so that all records can be turned over to the competent authori-ties.

Report the activity as suspicious to the competent authority because the lawyer is covered by these directives.

Consult with the competent authority to receive advice on how to handle the transaction.

154. The compliance officer for a private bank has been tasked with reviewing the procedure for authorized signatories on customer accounts to ensure it is in line with relevant Wolfsberg Anti-Money Laundering Principles for Private Banking.

Which three statements from the procedure are in line with Wolfsberg? (Choose three.)

Where the Authorized Signatory is not a lawyer or accountant, due diligence as to the source of funds and wealth of the Authorized Signatory should be undertaken.

The responsible private banker must establish the identity of a holder of general powers over an account (e.g. a signatory for the account) and, as appropriate, verify that identity.

Where due diligence has been satisfactorily completed on all authorized signers, the responsible private banker may reduce the due diligence performed on the account holder and/or beneficial owner.

The responsible private banker must obtain the necessary documentation establishing the authorized signer’s authority to act on behalf of the account holder or beneficial owner (e.g. a Power of Attorney).

If an individual has signing authority over an account but does not act on a professional basis as a manager of funds, the responsible private banker must understand and document the relationship between that authorized signer, the account holder, and, if different, the beneficial owner of the account.

155. A bank located in New York has identified suspicious transactions at a correspondent bank in ChinA. For one of the international customers, the correspondent bank is not following agreed upon protocols.

Which factor indicates that the bank should terminate the relationship?

The correspondent bank has opened branches in a country on the Office of Foreign Assets Control list.

The compliance officer at the correspondent bank is currently being investigated due to bribery allegations.

The correspondent bank has recently exceeded acceptable limits in the primary banks’ recently developed risk model.

The primary institution has requested transactional details from the correspondent bank to aide in their investigation.

156. Which principles should be included in a FATF-Style Regional Body (FSRB) update? (Choose two.)

Issue country-specific Mutual Evaluation reports

Address AML/CFT technical assistance of individual members

Identify jurisdictions with weak AML/CFT regimes

Establish AML/CFT standards and typologies

Protect the reputation and standing of FATF

157. Which scenario best justifies why a financial institution (FI) might close a customer’s account?

The account has transactions that triggered multiple Suspicious Activity Reports (SARs).

The account shows periodic fixed amount remittances for tuition fees.

The customer uses a shipping company dealing with specially designated nationals (SDNs).

The customer is the object of a civil subpoena.

158. Which factors specific to the securities industry increase the exposure to money laundering risk? (Select Two.)

The increase of sector-specific guidance

The practice of brokerage firms maintaining securities as nominees

The complexity of the securities business

The link to sanctioned countries

The speed of the transactions

159. Which function provided by lawyers can be useful to a potential money launderer as documented by FATF in its typology report 2000-2001? Choose 3 answers

Creating complex legal arrangements

Buying and selling property

Performing financial transactions on behalf of a client

Providing legal advice

160. Which trading pattern may be indicative of money laundering in capital markets?

Free of payment asset transfer

Remittance of a round dollar amount

Trading on an account

Transacting with multiple counterparties

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161. Which statement is true regarding the FATF standards for SARs/STRs information sharing within a financial group?

FIs must retain copies of SARs/STRs and supporting documentation for five years from the date of filing the STRs

FIs cannot share customer information at all since it is confidential.

Financial institutions (FIs) should establish sufficient safeguards concerning the confidentiality of information shared for AML purposes.

FIs must require approval from regulators to share SARs/STRs information and supporting documentation.

162. Which of the following scenarios warrants enhanced due diligence (EDD)? (Select Three.)

The former personal secretary to the minister of transport in a low-risk country 25 years ago opening a bank account at a bank in a neighboring low-risk country.

An existing local league footballer trying to open a bank account with a bank in their local jurisdiction.

A bank located in a higher-risk country trying to establish a correspondent-respondent banking relationship with a bank in a lower-risk country.

An individual with a current bank account who resides in one country becoming the ambassador of another country.

The current prime minister of a country trying to open a bank account in another country.

163. Which are common types of economic sanctions? (Choose three.)

Targeted sanctions

Technological sanctions

SWIFT network sanctions

Sectoral sanctions

Supervisory sanctions

Comprehensive sanction

164. With which person(s) should an anti-money laundering officer coordinate when implementing a new hire screening program?

Internal Auditor

Local Financial Intelligence Unit

Human Resources

Institution’s Regulator

165. 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 wellknown philanthropist.

To whom should the investigator escalate these concerns?

Audit committee

Chairman of the Board

The owner of the auto repair shop

The bank anti-money laundering officer

166. According to the Financial Action Task Force 40 Recommendations, Designated Non-Financial Businesses and Professionals include which entities?

Commodities traders

Money services businesses

Hawala operators

Real estate agents

167. What action should a bank CEO's assistant take when the bank CEO expenses large sums of money to a charitable organization run by the bank CEO's direct family member?

Report the actions to the Executive Board of the bank.

Meet with the bank CEO to learn why the donations are being made.

Investigate the charitable organization's relationship with the bank CE

Submit the concern anonymously to the bank's internal Compliance Hotline.

168. What are three elements of a sound Customer Due Diligence Program?

Determination of what type of customer the financial institution will accept

Training as to how and to what extent to identify prospective customers

Obtaining date of birth and address of a prospective customer

Determination of who in the institution should be assigned to the prospective customer as a liaison

169. What describes the Black Market Peso Exchange money laundering method?

The best known money laundering method used by known terrorists

An undercover technique to identify politically exposed persons who may assist money launderers

A method primarily used by narcotics traffickers to transfer value back to the source country

A method used to smuggle dollars or pesos across that border from the

to Mexico, and vice versa

170. How should law enforcement obtain documentation from an institution when suspicious activity was identified? (Choose two.)

Request copies of the relevant documents from the accountable institution.

Pay an employee of the accountable institution to make copies of the documents.

Request a Financial Intelligence Unit (FIU) share copies of suspicious transaction reports.

Request the documents from the FI

Acquire a search warrant to obtain the documents.

Page 18 of 24

171. Which statements describe risks that are associated with international business corporations? (Select Two.)

They are inexpensive to acquire.

They are established as an off-shore company.

They are created in a tax haven.

They facilitate asset protection.

They are established with nominee directors.

172. A recent anti-money laundering audit revealed several regulatory reporting violations and lapses with the organization’s anti-money laundering policy. As a result, the compliance officer has created a follow-up matrix to document progress in correcting the identified deficiencies.

To whom should the compliance officer provide regular updates of corrective action to help ensure the appropriate oversight?

Audit management

Human Resources

Business line managers

Designated board committee

173. Which of the following activities conducted at a financial institution is the strongest example of avoiding reporting thresholds?

Making small cash deposits over the course of a week.

Performing transactions by check (cheque) or other payment instrument.

Conducting small cash transactions at multiple locations during the same day.

Establishing both a personal and business account and depositing cash in both.

174. What should an employee do after witnessing suspicious activity from a coworker?

Request that the coworker provide justification for their actions.

Escalate to the company's conflict line or compliance department.

Request help from colleagues in determining that the best course of action.

Discuss the suspicious activity with your supervisor.

175. The local manager of a remote mortgage origination department of a financial institution has just discovered that sanctions screening of new customers is not being performed.

Which action should the local manager take in this situation?

Start screening new customers

Immediately inform the regulators

Immediately inform senior management

Do nothing because the department only handles a very small number of mortgages

176. An AML specialist at a financial institution is presented with a search warrant.

Which actions should be taken to comply with the search? (Select Two.)

Remember what items the agents have seized and taken from the premise.

Record the names and affiliations of the agents who conduct the search.

Proactively ask the agents as many questions as time allows.

Leave the premises to allow the agents to conduct the search.

Obtain a copy of the warrant or photocopy the original warrant.

177. What do the Financial Action Task Force (FATF) mutual evaluations of each member assess?

The levels of implementation of the FATF Recommendations

The member’s ability to send a representative to the plenary sessions

If the member has a large enough economy to maintain its membership

If the member has made any suggestions for updates to the FATF Recommendations

178. A suspicious transaction report filed on a car dealer structuring deposits initiates a criminal investigation. The dealer changes branches and begins placing transactions with a frontline employee to whom the dealer has given numerous gifts.

This employee handles all of the dealer's structured deposits and does not report the suspicious activity internally.

The competent authority has advised the anti-money laundering specialist to avoid tipping off the employee until the investigation is finalized.

What action should the specialist take next?

Recommend the immediate termination of the employee.

Advise that the dealer's accounts should be closed.

Consult with senior management and the legal advisor.

Inform the institution's regulatory agency of the situation.

179. Which of the following competent authorities should directly receive suspicious or unusual transaction reports?

law enforcement

an independent judge

financial intelligence unit

central bank

180. A financial institution (FI) has decided to revamp its compliance program to be more risk-based.

Which option should the FI use as part of the new risk-based compliance program?

Leadership-based

Predictive-based

Transaction-based

Data-based

Page 19 of 24

181. One key aspect of promoting an enterprise-wide compliance culture within a financial institution (FI)

is that the:

first line of defense should establish its own policies independently.

revenue generating business sectors should have precedence over compliance.

relevant information should be shared throughout the organization.

cost of compliance should increase proportionately to revenues.

182. When providing reporting of STRs to the board, which of the following should be provided?

A numerical summary of all the STRs

A numerical summary of all the STRs and a summary of key STRs, including PEPs, key employees

A summary of all key STRs, including PEPs and key employees

All the STRs filed with the national FIU

183. An anti-money laundering audit identifies a significant weakness in how transaction monitoring alerts are cleared. Audit sampling identified potentially suspicious activity that was cleared as not suspicious.

Management accepts the audit finding and develops a remediation plan.

What is the role of the auditor during the correction phase?

Directing the remediation of the deficiency in a timely manner

Developing procedures to provide sufficient risk-based documentation for clearing alerts

Providing training to the alert clearing department on the importance of effective alert clearing

Validating the successful remediation of the issue once management indicates the issue is resolved

184. Which action indicates possible Penza scheme activity?

A licensed seller offers higher profit on investments in a high risk country

An unlicensed investment advisor offers profits other investments cannot guarantee

A licensed investment advisor lures aging/retired professionals to invest in securities

A unlicensed investment advisor offers returns that are competitive with industry benchmarks

185. Who meets the standard to perform the AML audit? (Select Two.)

An internal auditor with a family member employed in the AML department

An internal auditor with the requisite knowledge and expertise of AML

A consultant previously employed in the AML department within the past 2 years

Qualified bank staff if not involved in the AML function being tested

A consultant with limited knowledge and experience in AML but many years of internal audit experience

186. Which test should be included in a bank's Office of Foreign Assets Control sanctions screening audit program?

Reviewing wire transfer screening processes to ensure that potential name hits are investigated promptly

Looking at copies of suspicious activity reports filed with regulators to ensure completeness

Ensuring that all clients with foreign identification are subject to enhanced due diligence

Examining Human Resources processes for conducting criminal background checks on executives

187. According to the Financial Crimes Enforcement Network, after an initial suspicious activity report has been filed for a customer, a financial institution must perform a continuing review of the account for a period of how many days?

30 days

60 days

90 days

120 days

188. A compliance officer at a financial institution (FI) received an investigation request for a customer from a local law enforcement agency.

Which action should be taken by the FI?

Obtain approval from the Financial Intelligence Unit (FIU) before submitting the customer's information.

Omit some responses to meet the regulatory deadline.

Assign employees responsible for the customer to the investigation team.

Consider retaining qualified, experienced legal counsel.

189. Under requirements for correspondent accounts in the USA PATRIOT Act, the word "certification" refers to a written representation by a

federal receiver" certifying that he is not the beneficial owner of the correspondent account.

respondent bank, certifying that they do not do business with politically exposed persons.

correspondent bank, certifying that they do not open correspondent accounts for alternative remittance companies.

respondent bank, certifying that they do not do business with shell banks.

190. Which three should real estate agents include in the criteria to assess their company’s potential money laundering and terrorist financing risks when implementing a reasonable risk-based approach?

Credit Risk

Customer Risk

Transaction Risk

Geographic Risk

Page 20 of 24

191. What must be materially true regarding transactions for United States (U.S.) sanctions laws to have jurisdiction?

Transactions are traced to illegal proceeds

Transactions are processed by a

person

Transactions are stripped of beneficial owner information

Transactions are identified as proceeds of foreign corruption

192. Which method is used to launder money in casinos?

Purchase chips with cash and play at a table

Purchase chips with cash and redeem for cash

Purchase chips with cash and redeem for a check

Purchase chips with cash and sell to another person for cash

193. Which regulatory bodies cooperate when dealing with cross-border suspicious or unusual financial activity investigations?

European Commissions

Financial Intelligence Units

Wolfsberg Groups

Financial Action Task Forces

194. Which are essential elements of a KYC program identified by the Base1 Committee on Banking

Supervision? (Select Two.)

Internal control

Customer acceptance policy

Code of conduct

Risk appetite

Risk management

195. Why is the Mutual Legal Assistance Treaty (MLAT) a gateway for international cooperation?

They provide a legal basis for transmitting evidence that can be used for prosecution and judicial proceedings

They receive reports of suspicious transactions from financial institutions to disseminate to local Law enforcement and foreign FIUs

They obtain intelligence that might lead to evidence

They issue the Prmc4es of Information Exchange Between Financial intelligence Units (FIUs)

196. An alert has been triggered by a monitoring system and an investigation has been opened. The activity involves significant and multiple cash deposits into a personal account and transferring funds to an offshore bank on the same day. Further investigation reveals this personal account had experienced low levels of activity for the past 6 months and funds are transferred to the account of a charitable organization.

Which of the following is the next step that the Compliance Officer should take?

Prohibit further transactions with the charitable organization.

Conduct enhanced due diligence on the charity's trustees.

Place the charitable organization on the bank's internal "watchlist."

File a suspicious transaction report with the competent authority.

197. precious metal dealers.

1, 2, and 3 only

1, 2, and 4 only

1, 3, and 4 only

2, 3, and 4 only

198. Which of the following are risk factors a financial institution should examine when onboarding a new corporate customer? (Select Three.)

The type of business the corporate customer is engaged in.

The employment profiles of all employees of the new customer.

All the financial institutions where the new customer currently banks or has banked previously.

The identity of senior managing officials and all individuals authorized to operate the account.

The country or location where the customer is from or conducts business.

199. When implementing a risk-based approach related to casinos, which risks are related to the customer as an individual? (Choose two.)

Transfer between customers

Casual customers

Improper use of third parties as customers

Customer from a high-risk country

Use of casino deposit accounts by the customer

200. To ensure the independence of an audit for an AML program those involved in the audit would best be described as being:

not Involved in the organizations AML compliance program and having a reporting line to the board of directors or committee thereof

not involved in the organizations AML compliance program and having a reporting line to the organization's Chief Executive Officer

not involved in the organization's suspicious activity report filing process and having a reporting line to the board of directors or committee thereof.

not involved in the organization's suspicious activity report filing process and having a reporting line to the organization's Chief Executive Officer

Page 21 of 24

201. A US casino customer has won 55,518 USD. The customer goes to the casino cashier cage to execute some transactions.

Which ^transactions are an indicator of money laundering? (Select Two.)

The customer transfers 100.000 USD to another personal bank account located outside the customer's resident country,

The customer requests the cashing out of the winnings in checks under 10.000 US

The customer transfers all the winnings to another personal bank account located outside the customer's resident country.

The customer requests the cashing out of the winnings in a single check.

The customer transfers 50.000 USD to another personal bank account located in the customer's resident country.

202. According to the Basel Committee, customer acceptance, customer due diligence, and record-keeping policies and procedures should be changed as necessary to:

address KYC deficiencies in account opening procedures.

ensure policies and procedures are reviewed every three months.

address structure changes strictly related to new employees.

address variations in risk among each line of business within the organization.

203. Suspicious activity triggered a suspicious transaction report filing on a company that holds an account at a large commercial bank. Investigations revealed that a member of the bank's Board of

Directors is the major shareholder of the company. Further review revealed the bank had no reasonable explanation for the activity, but could not confirm if criminal activity occurred.

Which of the following is the next best course of action for the compliance officer?

Include a detailed presentation of this case in the Board report.

Prevent the suspicious transaction report from government filing.

Ask the Board member to explain the transaction.

Maintain standard summary statistical reporting to the Board.

204. An organization’s automated surveillance system identifies large fluctuations in customer activity. As a result of an audit, the compliance officer 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?

Peer

Income

Mapping

Below-the-line

205. Which key aspect of the Office of Foreign Assets Control's extraterritorial reach specifically relates to prohibited transactions?

Prohibit or reject unlicensed trade and financial transactions with specified countries, entities, and individuals

Prohibit or reject licensed trade and financial transactions with specified countries, entities and

individuals

Prohibit or reject licensed trade and financial transactions with specified countries, entities and non-

individuals

Prohibit or reject unlicensed foreign trade and financial transactions with specified countries, entities, and individuals.

206. Which red flags should be considered prior to establishing a relationship with a third party? (Select Two.)

The third party has a lack of anti-corruption compliance clauses in agreements.

The third party's amount to be paid for goods and services appears to be reasonable.

The third party has requested unusual payment or billing procedures.

The third party has a declaration of non-family or business ties with government officials.

The third party has sufficient capability to provide the services or goods for which it is being engaged.

207. Which are red-flag indicators of possible money laundering through online gambling? (Choose two.)

The player is identified as a Politically Exposed Person (PEP).

The player opens several accounts under the same name using different IP addresses.

The customer uses their credit card to fund an online gambling account.

The player deposits small amounts of funds into their online gambling account.

The customer logs on to the account from multiple countries.

208. The board of directors receives notice from the primary regulator of the bank that potentially suspicious activity has been identified and the bank president appears to be involved. The Board asks the compliance officer for advice.

Which action should the compliance officer take when informed?

Destroy all records relating to the matter

Insist on the president’s immediate resignation

Inform the bank’s legal counsel and follow their instructions

Inform the president of the regulator’s suspicions and ask for his advice

209. While conducting a review of a medium-risk customer, an analyst noted that a newly added authorized signatory is a foreign politically exposed person (PEP).

Which is the appropriate next step for the analyst to take?

Review beneficial ownership to finalize the risk category of the customer.

Remove the PEP as the authorized signatory.

Re-categorize the customer as high-risk.

Categorize the authorized PEP signatory as high-risk.

210. When a regulatory body requires international assistance in a money laundering inquiry, such assistance is typically obtained by

Filing a request under Egmont guidelines.

Submitting a request for overseas assistance to the corresponding supervisory body.

Contacting the Financial Action Task Force, Organization for Economic Co-operation and Development, or other international organizations and seeking their intervention.

Communicating with the Head of Compliance for the financial institution.

Page 22 of 24

211. A professional dealer in precious metals and stones in an EU country plans to implement measures to reduce the risk of being misused for money laundering purposes.

Which measures are most relevant for achieving this goal? (Select Two.)

Only accept trades related to precious metal pool accounts maintained by sophisticated precious metal companies.

Stop accepting payments from persons other than the beneficiary.

Limit direct contact between customer and employees.

Limit the acceptance of purchases without adequate customer identification information.

Stop accepting cash payments in currencies other than Euro.

212. Which of the following is considered a shell bank as defined by the USA PATRIOT Act?

A bank incorporated in an offshore jurisdiction without a physical presence or employees.

An Internet bank operating in the

providing services worldwide.

A local bank with offices in a non-cooperative jurisdiction which is subject to minimal regulatory supervision.

A bank run by a foreign holding company with offices and staff in an offshore jurisdic-tion.

213. Which red flag is most relevant to money laundering through capital markets?

A low-priced security sees a sudden spike in investor demand with a rising price.

A security sees a transactional pattern of a steady decrease in both trading volume and prices.

A firm sees an unexpected increase in demand for electronically traded funds.

A trading customer maintains a portfolio of securities concentrated in one specific emerging market.

214. Which risk factors should a financial institution (FI) examine for a new corporate customer intending to open a bank account? (Select Three.)

The type of business the corporate customer is engaged in.

The employment profiles and information of all employees of the new customer.

All the financial institutions where the new customer currently banks or banked previously.

The identity of senior managing officials and all individuals authorized to operate the account.

The country or location where the customer is from or conducts business.

215. The EU’s 6th Anti-Money Laundering Directive (6AMLD):

Extended AML oversight to crowdfunding platforms and professional football clubs.

Eliminated the requirement for the European Commission to conduct a risk assessment.

Created a central EU watchdog to combat money laundering.

Strengthened provisions relating to the accuracy of data submitted to central beneficial ownership registries.

216. A customer puts high-denomination cash notes into a poker machine at a casino. Without placing any bets, the customer collected winnings in the form of a check from the casino.

Which money laundering threats could result from the customer's activities?

Micro-structuring cash

Legitimizing illicit funds

Misuse of money service business

Obscured beneficial ownership

217. Which is often an indirect consequence of non-compliance with AML laws?

Drop in stock value

Punitive fines

Criminal proceedings

Sanctioning

218. A compliance officer for a casino may suspect money laundering if an individual:

invokes reporting requirements through a lump sum payment.

refers to casino associates by their first name.

purchases a low volume of chips with cash and turns them in for a casino check.

requests to have winnings transferred to a bank account of a third party.

219. An internal review of anti-money laundering training documentation revealed only new agents employed by a financial institution that sells life insurance products were trained. Additionally, it typically took the institution 8 months to begin training for new actuaries. The compliance officer explained training was limited to actuaries because they perform the only high-risk function. The institution relied on e-learning techniques without follow-up assessment.

Which of the following issues would the internal review most likely recommend?

All staff, apart from the Board of Directors, must be trained.

Pro duct-specific anti-money laundering training should be provided company-wide.

The institution must provide anti-money laundering training to actuaries within 6 months.

Continue using e-learning to emphasize anti-money laundering content during training.

220. Historically, which vehicle is most often used to hide beneficial ownership?

Professional association

An offshore company

A limited liability partnership

A charitable organization

Page 23 of 24

221. An immigrant residing in the United States opens a bank account that includes a debit card. Several months later, the transactional monitoring system identifies small deposits into the account followed by corresponding ATM withdrawals from a country bordering a conflict zone.

How should the bank respond?

Block any further activity

File a suspicious transaction report

Initiate an investigation into the activity

Contact the customer if the transaction activity continues

222. Who has the day-to-day responsibility of communicating and reinforcing the established anti-money

laundering compliance culture and program?

Business lines

Senior management

Board of directors

Compliance officer

223. Which of the following corporate structures present a higher money laundering risk due to reduced transparency? (Select Three.)

A company with nominee shareholders and directors in a local jurisdiction.

A private company that has no activity in a tax haven jurisdiction.

A company with bearer shares incorporated in a tax haven jurisdiction.

A limited liability company incorporated in a foreign jurisdiction.

A private investment company incorporated in a tax haven jurisdiction with strict secrecy laws.

224. Which section of the USA PATRIOT Act permits the U.S. government to seize funds deposited in a U.S. correspondent account of a foreign bank, creating extraterritorial impact?

Section 319(b)

Section 314(b)

Section 314(a)

Section 319(a)

225. Financial Intelligence Units (FIUs) are responsible for:

the timely dissemination of cases to law enforcement agencies.

responding to requests from law enforcement agencies for information contained in regulatory reports.

sharing evidence with other FIUs.

receiving confirmed reports about committed crimes from accountable and reporting institutions.

226. A law enforcement agent calls a bank anti-money laundering investigator for supporting information about a suspicious transaction report that was filed the previous month.

How should the investigator respond?

Refer the agent to the bank’s compliance officer

Send the information to an address provided by the agent

Share the requested information during the telephone call

Require a search warrant before releasing the information

227. Money laundering red flags associated with money service businesses include: (Select Two.)

cash payments on insurance policies by a third party.

the same customer conducts transactions in multiple locations in a short time period.

repeated receipt of funds transfers from virtual currency exchanges.

an employee lives a lavish lifestyle supported by his or her salary.

two or more customers use the same identification for separate and unrelated transactions.

228. In order to protect investigative materials from disclosure when conducting an internal Investigation of any employee of a financial institution, legal counsel of that financial should________?

Request formal company authorization to conduct the investigation. Such authorization should be granted, if possible, by the board of directors or audit committee

Refuse to provide any records or documents to law enforcement because the bank has client privilege with its bank customers

Let the bank hire any and all contract investigators to conduct the internal investigation. That way Legal is not a party to the action and may remain independent

Not mark files or documents with privileged and Confidential: Attorney-Client Privilege and/or Work-Product. Those marks will only encourage law enforcement

229. An independent audit function to test the program.

1, 2, and 3 only

1, 2, and 4 only

1, 3, and 4 only

2, 3, and 4 only

230. A potential client calls a broker-dealer wishing to purchase securities. The client does not appear to be concerned with any fees associated with the account or price of the securities. Further information provided by the potential client indicates the individual may have relatives working for a company in which the potential client wants to invest.

Which type of activity is the potential client attempting to commit?

Transfer of value to relatives

Usage as a deposit account

Usage of insider information

Transfer funds to a third-party

Page 24 of 24

231. What should senior management do in order to promote a culture of anti-money laundering compliance?

They should include compliance with AML procedures as condition of employment

They should attend all training sessions with front-line employment

They should have close ties with the independent auditors of the AML program

They should base employee compensation on the amount of suspicious activity they detect

232. Which line of defense is solely tasked with providing assurance to the Board of Directors of an organization?

The fourth line of defense

The second line of defense

The third line of defense

The first line of defense

233. What are the regulatory risks to a bank employee who willfully violates anti-money laundering laws?

Investigation and reputational damage

Fines and suspension from the industry

Criminal investigation and imprisonment

Enforcement actions including fines against the financial institution

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