When performing an investigation, which key steps should be taken to maintain and secure supporting documentation used to perform an investigation of a suspicious activity?
A. Disseminate the rationale for the investigative approach and the objective basis for the determination.
B. Perform the alerting transaction with alternative thresholds to ensure they are calibrated correctly.
C. Ensure that a secure archive has information available to the client.
D. Maintain a record of the transaction activity that generated the alert.
Which scenario should be escalated as potentially suspicious activity?
A. A retail chain deposits cash into several operating accounts and consolidates the funds into one account.
B. A domestic business account receives a wire transfer from an international business with no history of such activity or business needs.
C. A convenience store makes daily deposits or withdrawals primarily in cash.
D. A corporate account deposits large checks and wire transfers on a frequent basis from existing customers.
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?
A. Transfer of value to relatives
B. Usage as a deposit account
C. Usage of insider information
D. Transfer funds to a third-party
An individual opens an e-account in an off-shore gambling website using non-documentary verification and creates an e-wallet on a mobile device. In order to add funds to the account, the individual uses a credit card, wire transfers, cryptocurrency, and a money service business.
Which source of money represents more risk of money laundering?
A. Wire transfer
B. Cryptocurrency
C. Money service business
D. Credit card
The findings of an internal audit discover that a large group of employees do not know how to handle Politically Exposed Persons (PEPs). Which is the next course of action that should be taken?
A. Create a company-wide training program.
B. Revamp the compliance program to better identify PEPs.
C. Ensure all new-hire individuals have in-depth knowledge of PEPs.
D. De-risk all PEPs from the financial institution (FI) to ensure compliance.
Which type of sanctions are most likely to be used in order to avoid escalating violent conflicts and/or proliferation of weapons?
A. Financial prohibitions
B. Export and import restrictions
C. Arms and related materials embargo
D. Asset freeze
Which safeguard is in place for Financial Intelligence Units (FIUs) to share information securely according to Egmont?
A. A computer with access to the Egmont Secure Web is accessible to all members of the FIU.
B. Information sharing is conducted according to processes contained in Memoranda of Understanding.
C. Intelligence is shared via messaging applications.
D. Investigators are allowed to request information from a foreign FIU directly.
Which should authorities do to safeguard AML information exchanged with other countries?
A. Protect exchanged information as they would protect similar information received from domestic sources.
B. Require the use of non-disclosure agreements with anyone accessing the exchanged information.
C. Use the court system to ensure confidentiality of exchanged information through court orders.
D. Destroy the information once the investigation is complete.
Which is a red flag for funds transfers?
A. Funds transfers are received in numerous small quantities from entities that are in related industries.
B. Funds transfers are repeatedly sent to the same beneficiary out of line with the business purpose.
C. Funds transfers are repetitive and within expected patterns.
D. Funds transfers are to a higher-risk geographic location with a known supplier within the same industry as the originator.
What reputational risk consequence could a financial entity face for violating AML laws?
A. Seizure of assets
B. Monetary penalties
C. Increased audit costs to monitor behavior
D. Loss of high-profile customers
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