ACAMS Flashcards
A prospective client walks into an accounting firm wanting to incorporate a company. The accountant feels uncomfortable after the meeting. Which two of the accountant’s observations warrants escalation to the compliance officer? (Choose two.)
A. The prospective client presents confusing details about the proposed business and has very little knowledge about the proposed business activity.
B. The prospective client is able to provide source of funds and source of wealth documents.
C. The prospective client exhibits confidence when speaking to the accountant when providing personal details.
D. The principal activities of the proposed company are importing and exporting new furniture.
E. The prospective client is unable to provide information about the beneficial owners.
A, E
A compliance officer is developing an anti-money laundering program for a financial institution located in a Financial Action Task Force member country. The institution conducts business with customers located in countries/jurisdictions that are not members of Financia Action Task Force. Which of the following issues should be addressed in the program? Choose the three correct answers.
A. The requirement to identify the beneficial owners of accounts.
B. The requirement for customer identification for the opening of new accounts.
C. The financial institution’s obligation to report suspicious transactions.
D. The obligation to freeze funds involved in suspicious transactions.
ABC
What are the attributes of “Cuckoo Smurfing” the money laundering term FATF added in 2005?
A. It involves the use of multiple individuals for making cash deposits, buying monetary instruments or bank drafts in amounts that are under reportable limit
B. It is linked to alternative remittance systems in which criminal funds are transferred through the accounts of unwitting persons expecting genuine funds from abroad
C. It involves the process of sending multiple wires abroad to money laundering havens and having the funds returned in smuggled bulk cash
D. It involves commercial transactions deliberately routed through retail organization’s bank accounts
B
A relationship manager in a bank has had a private banking customer for 10 years. The customer has business accounts and investments and seeks advice on the creation of a company overseas. The relationship manager refers the customer to the commercial banking manager and vouches for the customer. Which of the following risk factors is the most important?
A. The proposed offshore jurisdiction is known for its strong privacy laws limiting access to customer information by law enforcement.
B. The customer does not want to provide more information than when the first account was opened.
C. The company wants to transfer funds in large, even amounts.
D. Entities that are to receive funds from this company are located in the same country.
B
Which statement is true regarding the FATF standards for SARs/STRs information sharing within a financial group?
A. FIs must retain copies of SARs/STRs and supporting documentation for five years from the date of filing the STRs.
B. FIs cannot share customer information at all since it is confidential.
C. Financial institutions (FIs) should establish sufficient safeguards concerning the confidentiality of information shared for AML purposes.
D. FIs must require approval from regulators to share SARs/STRs information and supporting documentation.
C
Why do organized crime groups often use front companies? (Choose two).
A. Because they are not registered, front companies are not subject to income and other sales taxes.
B. Because using multiple front companies can make it easier to control an entire sector of the economy.
C. Because they are generally subject to lighter due diligence requirements by banks and other financial services providers.
D. Because front companies generally charge higher prices than legitimate companies, so profit margins are higher.
E. Because they can use the company’s bank accounts to comingle deposits with those of legal businesses.
B, E
Which three statements are true about the Fourth EU Directive on Money Laundering? Choose 3
A. It updates European Community legislation to be further in line with the Financial Action Task Force (FATF) 40 Recommendations.
B. It repeats the definition of a politically exposed person in previous directives.
C. It repeats the customer due diligence requirements of the previous directives but adds more detail to the requirements by, for example, including a specific requirement to identify the beneficial owner and includes ongoing monitoring requirements.
D. It includes new definitions for correspondent relationships and senior management.
ACD
A bank located in Arizona is considering a loan application for a new client. The collateral for the loan is a property in Florida. The loan will be in the name of a limited company (LLC) whose ownership is not disclosed to the bank. The LLC was established by a New York-based attorney. The loan will be repaid by the LLC in monthly wire transfers of $9,000 which is more than the required monthly payment. Which aspect indicates the potential for money laundering?
A. The LLC’s ownership is not disclosed to the bank
B. The collateral, a property in Florida, is not located in Arizona
C. The repayment in the amount of $9,000 indicates potential structuring
D. The attorney associated with the account is outside the bank’s lending area
A
An immigrant residing in the United States opens a bank account that includes a debit card. Several months later, the transactional monitoring system identifes small deposits into the account followed by corresponding ATM withdrawals from a country bordering a conflict zone. How should the bank respond?
A. Block any further activity
B. File a suspicious transaction report
C. Initiate an investigation into the activity
D. Contact the customer if the transaction activity continues
C
Which is a key aspect of the first eu directive on money laundering?
A. It extended the scope beyond drug-related crimes.
B. It established drug trafficking as a predicate offense of money laundering.
C. It expanded the definition of criminal activity to all serious crimes.
D. It defined money laundering as a separate crime.
B
Since its last regulatory examination, a financial institution has aggressively grown by adding profitable new products and services. The institution has not historically received regulatory criticism regarding its anti-money laundering compliance program. However, a recent regulatory examination cited significant deficiencies in the anti-money laundering program that were attributed primarily to the lack of oversight by the institution’s leadership in implementing adequate controls over the new products and services.
Which area of international control should leadership first address to correct the weaknesses in the program?
A. Anti-money laundering policy
B. Anti-money laundering procedure
C. Money laundering risk assessment
D. Anti-money laundering compliance staff
C
Identify three key aspects of OFAC sanctions that have extra territorial reach. Choose 3
A. Restricting travel by U.S. citizens to certain countries
B. Economic and trade sanctions based on U.S. foreign policy
C. Freezing foreign assets under U.S. jurisdiction
D. Blocking people on the Specially Designated Nationals and Blocked Persons List
BCD
To ensure the independence of an audit for an AML/CFT program, those involved in the audit would best be described as being:
A. Not involved in the organization’s AML/CFT compliance program and having a reporting line to the organization’s CEO.
B. Not involved in the organization’s STR/SAR filing process having a reporting line to the board of directors or committee thereof.
C. Not involved in the organization’s STR/SAR filing process and having a reporting line to the organization’s CEO.
D. Not involved in the organization’s AML/CFT compliance program and having a reporting line to the board of directors or committee thereof.
D
Which three are examples of best practices terms of ensuring an adequate AML program? (Choose three)
A. Engage an independent party to perform a periodic review of the program
B. Review applicable domestic and international AML guidance
C. Perform a risk analysis on a regular basis and compare it to the coverage of the AML program
D. Review the accuracy of account opening applications
ABC
A financial institution opens a mortgage loan for a customer. During a subsequent internal review of the loan, it was noted that the appraisal used to support the loan was performed by an appraiser who was not on the institution’s approved appraiser list. This exception was approved by the senior loan underwriter. The reviewer, who had examined other loans from the same general area, noted that the value on the loan appeared significantly higher than on other comparable properties. Which of the
following should the anti-money laundering specialist recommend next?
A. Determine whether the loan underwriter reviewed the appraiser’s license for validity.
B. Alert local law enforcement regarding a potential collusive relationship between the underwriter and appraiser.
C. Document the underwriter’s actions prior to filing a suspicious transaction report.
D. Train the appraiser on anti-money laundering compliance for high-end real estate loans.
A
According to the European Union Money Laundering Directives, “knowledge, intent or purpose”’
required as an element for money laundering may be inferred from
A. Objective factual circumstances.
B. Subjective factual circumstances.
C. Objective non-factual circumstances.
D. Subjective non-factual circumstances.
A
Based on studies executed by the OECD which occupation are particularly are vulnerable to the false identification and identity theft
A. Sea port officer
B. Government officer
C. Lawyer
D. Laborers
C
Which situation is required an FI to update ML risk assessment: (choose two)
A. When opening a sales point in a new location in the same city
B. When new product / services or a customer type is introduced
C. When AML compliance team hire new employees
D. When there is a merger / acquisition
E. When new board members are elected
BD
Which one of the following statements is correct in respect of the FATF 40 Recommendations? Countries should:
A. Not allow bearer shares and legal persons that are able to issue bearer shares.
B. Gather statistics on STRs; prosecutions and convictions; on property frozen, seized and confiscated; and on mutual legal assistance, but not necessarily on other international requests for cooperation.
C. Consider the feasibility of a system in which banks and other financial institutions and intermediaries would report currency transactions without indicating a minimum fixed amount.
D. Not approve the establishment or accept the continued operation of shell banks.
D
Which indicator should be suspicious to a compliance officer at a brokerage firm?
A. Trading between accounts controlled by the same person
B. Large number of bid/ask prior to market opening
C. The client imposed limits to their losses from the outset of the relationship
D. A broker splits the bid-ask spread with the investor when matching buy and sell orders
A
According to the basel committee on customer due diligence, what are the four necessary elements of a sound KYC program?
A. Customer acceptance policy, declaraton of beneficial ownership, customer identification and risk management
B. Customer acceptance policy, risk management, monitoring higher risk accounts and customer identification
C. Declaration of beneficial ownership, customer identification, monitoring higher risk accounts and designation of PEPs as higher risk
D. Customer retention policy, risk management, monitoring higher risk accounts and customer identification
B
Which activity associated with new or developing technologies does the FATF recommend FIs pay special attention to?
A. Financial intermediaries performing transactions for customers
B. High volumes of cash transactions
C. Complex or unusually large transactions
D. Non-face to face business relationships or transactions
D
What are “split deposits”? A series of deposits:
A. In which the customer splits a sum of money and makes deposits into two or more accounts that add up to the original amount.
B. Where the customer exchanges large bills for small bills and then deposits the smaller bills just under the local reporting threshold
C. That are made by both an employee and the account holder into a customers account
D. In which the customer deposits in the ATM just before and after closing time to avoid unsual time stamps
A
According to the financial action task force, as part of their risk assessment, which are important data and information that a trust and company service provider must understand when establishing and administering a trust? (choose two.)
A. The source of funds in the structure
B. The general purpose behind the structure
C. The responsibility and authority in the structure
D. The management structure of the trust
E. The general nature of business of the trust
A,B
Which elements can trigger a review of the existing relationship during the opening of a new account? (Choose two.)
A. Incoming transfers from high-risk jurisdictions
B. A false positive result for name screening
C. Regular checks on the flow of funds
D. Estimated total income decrease
E. Recent adverse media on the client
A, E
Which insurance product is particularly vulnerable to money laundering?
A. Annuity
B. Casualty
C. Collateral
D. Regulated pension
A
During the course of work on behalf of a client, a lawyer participated in the movement of money. If the lawyer suspects an act of money laundering, which of the following should the lawyer do according to European Union Money Laundering Directives?
A. Follow bank secrecy laws.
B. Report the facts to the competent authorities.
C. Inform the client of the intent to terminate services.
D. Adhere to business confidentiality laws.
B
A casino incorporated in an offshore location approaches a financial institution to open an account relationship. The casino operates in a country that complies with Financial Action Task Force 40 Recommendations. The casino provides documentation of beneficial ownership. According to the Financial Action Task Force 40 Recommendations, the primary concern for the financial institution prior to opening the account is to
A. Verify the casino is licensed.
B. Secure gaming insurance.
C. Determine whether the casino conducts on-line gaming.
D. Ensure the financial institution knows the casino’s customers.
A
Which statement regarding US Patriot act best describe the key aspects that have extraterritorial reach (choose three):
A. It allows secretary of the treasury to order a US FI to close a correspondent account when a subpoena has not been responded by a foreign bank in a timely manner
B. It allows federal banking supervisor to require records of the identity of the owners of a foreign bank FI operating in the US
C. It allows the US attorney General to subpoena records from a foreign bank with US correspondent account including those which are outside the US.
D. It excludes as foreign FI businesses that would be considered brokers dealers, money transmitters, currency exchangers
E. It allows foreign banks to voluntarily designate a registered agent in the US to accept services of the subpoena
F. It obliges the government to trace the origin funds when a seizure of assets occurred in a correspondent
A,C,E
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 questions 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?
A. Immediately terminate the relationship
B. Schedule a periodic review of activity
C. Perform further investigation, if appropriate report the activity to the authorities and consider terminating the relationship
D. Perform further investigation, if appropriate report the activity to the authorities and place a limit on future transactions
C
How does the asian/pacific financial action task force (fatf)-style regional body help its members implement recommendations from thef atf? (choose two.)
A. Promotes laws that allow judicial challenges to seizure orders by an administrative body
B. Requires members to maintain lists of regional money laundering and terrorists financing issues relevant to their region
C. Encourages cooperative aml efforts in the region
D. Facilitates the adoption and implementation of internationally accepted aml measures by member jurisdictions
E. Endorsed regulations that define money laundering based on the model laws issued by the respective member states
CD
