Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

CAMS 3-4 > CAMS 3-4 > Flashcards

CAMS 3-4 Flashcards

1
Q

What does FATF recommend considering when assessing risk?

A
  • Customer risk
  • Geographic risks
  • Product/service risk
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

According to FATF, when should an institution conduct CDD?

A
  • Establishing business relationships.
  • Carrying out occasional transactions under certain circumstances.
  • There is a suspicion of money laundering or terrorist financing.
  • The financial institution has doubts about the veracity or adequacy of previously obtained customer identification data.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

FATF Recommendation 10

A

bank should not establish a banking relationship until the identity of the customer verified

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Targeted Sanctions

A

specifically named individuals, . These sanctions often include the freezing of assets and travel bans where possible.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Sectoral Sanctions

A

aimed at key sectors of an economy to prohibit a very specific subset of financial dealings within those sectors to impede future growth.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Comprehensive Sanctions

A

generally prohibit all direct or indirect import/export, trade brokering, financing or facilitating goods. These are often aimed at regimes responsible for gross human rights violations, and nuclear proliferation.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Specially Designated Nationals and Blocked Persons (SDN)

A

Office of Foreign Assets Control’s (OFAC) list of sanctions persons

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

When should institutions conduct economic sanctions screening?

A

Before a financial institution starts doing business with a new customer or engaging in certain transactions

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What are some of the limitations on screening customers against lists of Politically Exposed Persons?

A

These lists do not always provide all relevant information related to PEPs that would assist in identifying them. For instance, there is no unique identifier, such as a date of birth or address.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Why is the risk-based approach best?

A
  • Flexible
    •Effective
    •Proportionate
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

4 basic elements of financial institution’s AML program?

A 
DC PAT 
•system of internal Policies, procedures and controls,
• designated compliance officer 
•ongoing training 
•independent audit
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Parts of AML compliance training program.

A
  • Who to train,
  • What to train on,
  • How to train,
  • When to train, and
  • Where to train.
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Who reviews the review Suspicious Transaction Reporting (STR) systems?

A

independent audit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Testing of STR

A

review of policies, procedures and processes for referring unusual or suspicious activity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Prohibited

A

The company will not tolerate any dealings of any kind given the risk. Countries subject to economic sanctions or designated as state sponsors of terrorism, such as Sudan or Iran, are prime candidates for prohibited transactions. Prohibited customers would include shell banks,

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

High-Risk

A

firm should apply more stringent controls to reduce the risk, such as conducting enhanced due diligence and more rigorous transaction monitoring. Countries that are noted for corruption or drug trafficking are generally deemed high risk. High-risk customers may include PEPs; high-risk products and services may include correspondent banking and private banking,

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

The 4 risk levels?

A

Prohibited
High
Med.
Low

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

The ultimate responsibility for the AML compliance program rests with the____________

A

board of directors

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

7 CDD Elements

A

I DID ARM
•Full identification of customer and business entities, including source of funds and wealth when appropriate,
•Development of transaction and activity profiles of each customer’s anticipated activity,
•Definition and acceptance of the customer in the context of specific products and services,
•Assessment and grading of risks that the customer or the account present,
•Account and transaction monitoring based on the risks presented,
•Investigation and examination of unusual customer or account activity, and
•Documentation of findings.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Know Your Employee (KYE) program

A

program in place that allows it to understand an employee’s background, conflicts of interest and susceptibility to money laundering complicity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Internal AML Reports

A
  • Daily cash activity in excess or near threshold,
  • Cash activity aggregated over a period ,
  • Wire transfer reports
  • Monetary instrument logs/reports,
  • Check kiting/drawing on uncollected funds (significant debit/credit flows),
  • Significant change reports
  • New account activity reports.
22
Q

5 Parts of suspicious or unusual transaction reporting process

A 
• identify  
•evaluation 
•documentation
- notify management 
•training
23
Q

2 indicators of BMPE

A
  • Payment made in cash or wire by a third party with no connection
  • Payment made with checks, bank drafts or money orders not drawn on the account of the purchaser.
24
Q

Watch list filtering

A

screening new accounts, existing customers, beneficiaries and transaction counterparties against terrorist, criminal and other blocked-persons watch lists,

25
Q

“Corruption Perceptions Index,”

A

•Transparency International

- rates corruption

26
Q

“International Narcotics Control Strategy Report”

A
  • US State Department

- rates AML controls

27
Q

Identify the factors a prosecutor many consider when determining whether or not to bring a case against an institution involving money laundering-related charges.

A
  • criminal history,
  • cooperated with the investigation,
  • self-reported
  • AML program,
  • remedial action,
  • civil remedies available
  • Deterring wrongdoing by others is needed and will be served by a prosecution
28
Q

Describe the steps the bank should consider taking upon receipt of the subpoena.

A
  • notify seniors
  • comply
  • written notice for request to keep account open
29
Q

If the government asks the bank to keep certain accounts open, what is required?

A

request should be obtained in writing under proper letterhead and authority from the government.

30
Q

Steps for a Search Warrant

A
  • call lawyers
  • copy (warrant, affidavit, inventory, names)
  • be present
31
Q

In addition, the institution should maintain a _____________ over all requests and responses

A

centralized control

32
Q

If a bank is under investigation by a government agency for possible money laundering, what steps should the Bank have for its employees follow?

A

be instructed not to produce corporate documents directly, but, rather, should inform senior management or counsel

33
Q

What is the purpose of conducting an internal investigation?

A

learn the nature and extent of any potential wrongdoing, to develop information sufficient to report – when necessary – to the authorities, to enable the institution to minimize its liability, and to stop any potential money laundering.

34
Q

What factors should the Bank consider on whether to close a subpoenaed account?

A
  • legal basis
  • firm policies
  • seriousness of conduct
35
Q

What 6 steps should the institution take to ensure a written report on the internal investigation retains the attorney-client privilege?

A

1) Every page of the report should contain a statement that it is confidential and is subject to the attorney-client privilege and work-product privilege
2) Copies of the report should be numbered,
3) list of persons who are given copies 4) all copies should be returned
5) instructed not to make notes on their copies.
6) copies should be maintained in a file separate from regular institution files

36
Q

commission rogatoire

A
  • sent by the requesting countries central authority
  • includes the information sought, the nature of the request, the criminal charges in the requesting country and the legal provision under which the request is made,
37
Q

What does a country do after receiving commission rogatoire?

A
  • central authority that receives the request sends it to a local financial investigator to find out if the information is available
  • local investigator accompanied by requesting investigator on investigation
38
Q

How is a mutual legal assistance completed?

A
  • The central authority sends the evidence to the requesting central authority
  • 6 Local witnesses may need to attend court hearings in the requesting country.
39
Q

3 gateways that assist with the AML cooperation between countries

A
  • Mutual Legal Assistance Treaties,
  • Financial Intelligence Units
  • The Supervisory Channel.
40
Q

FATF Recommendations 36-40

A

“International aspects of money laundering and terrorist financing”

  • mutual legal assistance treaties, extradition, confiscation of assets and mechanisms to exchange information internationally.
41
Q

Memorandum of Understanding (MOU)

A
  • agreement between 2 parties establishing a set of principles that govern their relationship on a particular matter.
  • often used by countries to govern their sharing of assets in international asset-forfeiture cases or to set out their AML duties
42
Q

Role of FIU with MOU

A

FIUs are task of receiving and analyzing suspicious transaction reports on an ongoing basis and maintaining close links with police and customs authorities, share information among themselves informally in the context of investigations, usually on the basis of an MOU.
- Egmont Group of FIUs has established a model for such MOUs

43
Q

MOU vs MLAT

A

MOU is ordinarily used not for obtaining evidence, but for obtaining intelligence that might lead to evidence.

44
Q

International Business Company (IBC)

A

variety of offshore corporate structures, alternately called “exempt companies,” which are dedicated to business useoutside the incorporating jurisdiction

45
Q

Mutual Legal Assistance Treaty (MLAT)

A

agreement among countries allowing for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial resources in the respective countries, in private and public sectors

46
Q

Physical cross-border transportation of currency

A

Includes currency or bearer negotiable instruments in/out of a country by mail, ship or by person

47
Q

Safe harbor

A

protection for financial institutions, their directors, officers and employees from criminal and civil liability for breach of any restriction on disclosing information to FIU if done in good faith

48
Q

Smurfing

A

use of multiple individuals and/or multiple transactions for making cash deposits, buying monetary instruments or bank drafts in amounts under the reporting threshold.

49
Q

Tax Haven

A

Countries that offer special tax incentives or tax avoidance to foreign investors and depositors.

50
Q

Tipping Off

A

The improper or illegal act of notifying a suspect that he or she is the subject of a Suspicious Transaction Report or is otherwise being investigated or pursued by the authorities.

CAMS 3-4 (1 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions