Which AML standards have force of law?
A. Standards as defined in the Third European Union Money Laundering Directive (2005/60/EC)
B. Standards as defined by the United Nations (UN)
C. Standards as defined by World Bank / International Monetary Fund (IMF)
D. 40 Recommendations
What are some red flags pertaining to potentially suspicious transactions by a customer? Choose 3 answers
A. Having multiple addresses and/or moving frequently
B. Having a commercialaccount with cash deposits
C. Have a common address with several other bank clients
D. Having multiple individuals use the ATM card connected with the account m different cities
A private banker of a major international bank is onboarding a new private investment company. The banker has verified the identity of the two directors, a husband and wife, who are equal shareholders. The funds in the account will be
provided solely by the wife.
The banker was later informed by the company that an additional director and shareholder will be added to the company although the new shareholder will not provide funds.
What is the next step for due diligence in respect to the additional director and shareholder according to the Wolfsberg Anti-Money Laundering Principles for Private Banking?
A. Refuse to open the account as it is not usual for an individual to be a director and shareholder of a private investment company without providing funds.
B. Seek to further understand the relationship between the shareholders and undertake due diligence on the source of funds and wealth for each of the shareholders
C. Verify the identity of this individual, including due diligence in respect of background and reputation, and undertake due diligence on her source of funds and wealth
D. Seek to further understand the relationship between the shareholders and verify the identity of the individual which may include due diligence in respect to her background and reputation
What should a bank focus on to ensure on-going compliance with its AML program?
A. It should ensure that it develops and provides on-going targeted training of all current and new employees
B. It should subject all new employees to criminal background checks before being hired
C. It should review and update its transaction monitoring system
D. It should ensure that the regulators have reviewed and have approved the bank's AML program
According to experts, what is the most effective way to prevent money laundering through financial institutions?
A. Ensuring that transaction monitoring systems can identify terrorist financing
B. Collecting information on beneficial owners and foreign customers
C. Instituting a policy prohibiting the acceptance of funds intended for terrorist financing
D. Implementing a sound customer due diligence program
Which type of transactions present the highest risk?
A. Wire transfers from a publicly listed company
B. Payroll payments
C. Social insurance payments
D. Foreign exchanges
A prospective AML officer comes highly recommended by a bank's up-stream correspondent institution of similar size and make-up, located in a different city in the same country. The bank is interested in hiring the individual. What should be the next step taken by the Board of Directors?
A. Do a thorough background check
B. Confer with its regulatory agency to determine whether it is appropriate to hire the person
C. Hire the individual, relying on the recommendation of its correspondent
D. Hire the individual on a probationary basis so that the institution can determine if the individual is sufficiently experienced and capable
To ensure that an institution's anti-money laundering program is current, which step should be taken?
A. The program should be evaluated and updated at least every six months be the Board of Directors
B. The program should be reviews by a federal law enforcement officer for gaps in controls
C. The programshould be sent to the institution's government regulator on a periodic basis
D. The program should be reassessed at least annually
In which type of banking transaction is price manipulation, as a form of money laundering, a common practice?
A. Redeeming an annuity
B. Sending a wire transfer
C. Issuing a letter of credit
D. Subscribing to a cashmanagement account
Which two aspects of the security broker dealer industry increase its exposure to money laundering? Choose 2 answers
A. The routine use of wire transfers from, to or through multiple jurisdictions
B. Theyeasy conversion of holdings to cash with significant loss of principal
C. Disposing of cash through securities purchases
D. Fast paced transactions conducted electronically
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