A financial institution files a suspicious transaction report on a customer as the result of a high volume of large currency deposits to pay off a loan. A law enforcement officer calls the anti-money laundering officer to discuss the suspicious transaction report.
Which of the following is the anti-money laundering officer legally permitted to do?
1.
Discuss any aspects of the reported activity.
2.
Provide copies of the customer's loan documents.
3.
Explain the customer's loan payment history.
4.
Send the deposit documents referenced in the suspicious transaction report.
A. 1 and 2 only
B. 1 and 4 only
C. 2 and 3 only
D. 2 and 4 only
Which three statements are true about on-line banking offering a significant money laundering risk to a financial institution?
A. The nature of on-line banking can make it difficult to establish who is controlling the account
B. The ease of access through the internet enables cross border movement of funds
C. Due to client confidentiality, information collected on-line cannot be shared with law enforcement agencies on mere suspicion
D. The speed of electronic transaction enables execution of multiple complex transactions within short time frame
Under requirements for correspondent accounts in the USA PATRIOT Act, the word "certification" refers to a written representation by a
A. federal receiver certifying that he is not the beneficial owner of the correspondent account.
B. respondent bank, certifying that they do not do business with politically exposed persons.
C. correspondent bank, certifying that they do not open correspondent accounts for alternative remittance companies.
D. respondent bank, certifying that they do not do business with shell banks.
Which of the following represents the first Financial Action Task Force initiative?
A. The 40 Recommendations on Money Laundering
B. The Report on Non-Cooperative Countries and Territories
C. The Report on Money Laundering Typologies
D. The Special Recommendations on Terrorist Financing
A division anti-money laundering officer for a financial institution has been conducting a monthly self- assessment.
The officer reviews the accounts opened for compliance with a long standing Know Your Customer policy.
The self-assessment for the latest month shows a significant increase in compliance deficiencies for the first time in more than a year. Which of the following is the next course of action for the anti-money laundering officer to take?
A. Inform the Board promptly of the Know Your Customer policy trend over the last 6 months.
B. Determine if there is a readily identifiable cause for the deficiencies.
C. Implement a revision to the account-opening training program.
D. Revise the policy to simplify Know Your Customer compliance before the report is issued.
In establishing procedures for the review of suspicious transactions and filling of STRs, what thing should an institution focus on?
A. The need to have on-going training as to potential red flags that the institution might encounter
B. The appropriateness of having a centralized review of suspicious transactions and recommendations to file an STR to ensure consistency
C. A system for tracking STRs and ensuring that appropriate supporting documentation is segregated and maintained
D. The need not to ensure that the institution has a strong case of impropriety before filling an STR
An anti-money laundering specialist has been asked to establish a compliance program to detect and prevent money laundering and terrorist financing. Which of the following should the anti-money laundering specialist consider in developing the program?
1.
Funds for money laundering and terrorist financing are derived from illegal sources.
2.
Related practices are used to conceal the nature of the funds.
3.
The source and disposition of funds are similar.
4.
Similar techniques are used to move funds.
A. 1 and 2 only
B. 1 and 3 only
C. 2 and 4 only
D. 3 and 4 only
An anti-money laundering specialist notes a significant reduction in suspicious transaction report filings at a particular branch. Which of the following actions is most appropriate?
A. Place the branch on the watchlist to assure a review during the next quarter.
B. Analyze the branch activity reports to determine whether there has been a decrease in branch activity.
C. Review branch exception reports to determine changes in activity in accordance with customer profiles.
D. Review staff records to see whether inexperienced personnel are in critical positions without appropriate training.
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:
A. account holder presents proof the funds are legal
B. beneficiaries of transfers are not on a terrorist watch list
C. beneficiaries of transfers are not included on the Transparency International List
D. account holder does not reside in a country included on the U.S. State Department State Sponsors of Terrorism List
Which trading pattern may be indicative of money laundering in capital markets?
A. Free of payment asset transfer
B. Remittance of a round dollar amount
C. Trading on an account
D. Transacting with multiple counterparties
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