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)?
A. Implementing targeted financial sanctions
B. Performing country peer-to-peer evaluations
C. Enforcing mutual legal assistance
D. Applying a risk-based approach
Which are social/economic consequences of money laundering? (Choose two.)
A. Civil war
B. Weakening financial institutions
C. Increase in corruption and organized crime
D. Increase in tax revenue
E. Weakening of the country's infrastructure
One of the red flags of microstructuring is:
A. depositing sequentially numbered checks.
B. check deposits followed by ATM withdrawals using debt card in retail store.
C. single activity in an account immediately following the opening of the account.
D. frequent visits to make cash deposits of nominal amounts.
An accounting firm opened an account at a bank that is intended to be used as the operational account for the business. After a few months, a comprehensive review of the account was triggered due to unusual activity on the account. Which most likely triggered the review?
A. The account receives international payments that are substantially higher than other fees they typically receive.
B. The account sends monthly donations to several charities that operate in the same communities as the accounting firm.
C. The account receives several payments a day from multiple customers who operate in different industries.
D. The account receives international wires from companies in the Middle East where the accounting firm has several branches.
An EU Trust and Company Service Provider (TCSP) analyst notices some unusual activity while looking through a customer's financial statements and detailed general ledger. The customer is in the business of importing and exporting machineries. Which transaction indicator warrants further escalation to the compliance officer?
A. Inter-company loans from the holding company to the subsidiary company to finance the shipment of machinery.
B. The payment of virtual offices services overseas.
C. The payment of consultancy fees to unrelated companies and service providers established in a foreign jurisdiction.
D. The payment of company secretarial retainer fees to a foreign company in a tax efficient jurisdiction.
One area of responsibility for the Board of Directors when implementing a successful AML program is to:
A. ensure the appointment of a qualified chief AML officer.
B. create a culture of compliance based on the profit expectation.
C. manage the day-to-day processes of the compliance program.
D. hire a third-party firm to be responsible for the AML compliance.
A compliance analyst is reviewing recent activity between a publicly traded company and a company in a high risk jurisdiction. Which detail suggests that escalation is warranted?
A. The activity is a reputational risk to the financial institution.
B. It is the first time the originator wires the beneficiary.
C. Beneficiary is active in a related industry.
D. Payments to the beneficiary are for large dollar amounts.
Which actions are involved when a prosecutor instructs a bank to freeze the assets and bank accounts held by one of its clients? (Choose three.)
A. Inform other banks in the same geographical area to freeze the client's assets if they are a member of that bank, too.
B. Extend the account and asset freeze to the client's family members as a precautionary measure.
C. Ensure the client and beneficiaries are unable to access any frozen assets during the freeze order.
D. The institution does not need to comply with the request if the client's assets make the task unusually difficult or complex to access.
E. An affidavit must accompany the freeze order for the bank to comply with the request.
F. The institution should obtain a copy of the court order to freeze the assets of the named individuals.
A Trust and Company Service Provider (TCSP) providing services should have policies and procedures in place to identify critical information of the:
A. general manager.
B. signatory.
C. controller.
D. registered address.
What correspondent banking risk factor increases the risk for a Correspondent Bank?
A. Multi-national financial institution with global operations
B. Offers international funds transfer to customers
C. Major service provider to money service businesses
D. Limited product offering to customers in high-risk jurisdictions
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