CAMS-FCI Flashcards by Andrew Van Woert

Which main vulnerability has led to an increase in the ransomware attacks perpetuated on small businesses?

Weaker cybersecurity controls

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As noted from the KYC profile, the corporate customer is working in the wood industry. with
the last account review completed 3 months ago. Since the account’s opening. there has been no history of a large amount of funds flowing through the account. The investigator conducts an Internet search and finds that the remitter is a food beverage company. The same morning, the investigator receives a call from a financial intelligence unit (FIU)
inquiring about the same incident. The FIU states that it will issue a warrant to freeze the account on the same day. After further review, the decision is made that transactions appear suspicious. Which are the next steps the investigator should take?

Provide additional information to the LE upon receiving a formal request.

Gather all the information that would be useful for law enforcement (LE) and recommend filing a SAR/STR

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A bank’s transaction surveillance system triggers an alert for a deposit of 250.000 USO into a client’s account. According to the bank’s KYC information, the client works for a financial advisory firm, and earns approximately 100,000 USD per year. Which actions should be taken?

Request information and documentation from the client on the background of the transaction.

Contact the client advisor to learn if he has any insight on the transaction background.

Review the transaction background in the bank’s transaction platform.

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During onboarding al Private Bank A, client C indicated that the account would be initially funded with a transfer from Bank B totaling 50 million USD. On which source of funds should Bank A conduct additional scrutiny?

Third-party transfer

Transfer from Bank B

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An analyst reviews an alert for high volume Automated Clearing House (ACH) activity in an account. The analyst’s initial research finds the account is for a commercial daycare account that receives high volumes of large government-funded ACH transactions to support the programs. The account activity consists of checks (cheques) made payable to individual names in varying dollar amounts. One check indicates rent to another business.

An Internet search finds that the daycare company owner has previous government-issued violations for safety and classroom size needs, such as not having enough chairs and tables per enrollee. These violations were issued to a different daycare name. Simultaneous to this investigation, another analyst sends an email about negative news articles referencing local child/adult daycare companies misusing governmental grants. This prompts the financial institution (Fl) to search all businesses for names containing daycare’ or care. Text searches return a number of facilities as customers at the Fl and detects that three of these businesses have a similar transaction flow of high volume government ACH funding with little to no daycare expenses.

The analyst determines that site visits should be conducted for the three daycare businesses.

Which observations at the on-site visits would justify writing a SAR/STR?

Signs of severe wear and poor maintenance at the site

Lights turned off at the site during operational hours

A full parking lot of cars with no staff at the site

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A financial institution FI might use which option as intelligence to file a SAR/STR?

The Fl is unable to obtain evidence of required licensing or registration despite suspicion of money transmitting.

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The analyst determines that site visits should be conducted for the three daycare businesses.

Which red flags would be an indicator that activity is connected to a corruption/bribery typology?

Large checks issued to various individuals with the memos noting “gift”, “thank you”, “favor”

Negative news found on the customer related to government-issued violations for safety

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A client that runs a non-profit organization that aids refugees in leaving their home countries received a remittance from a money services business that was ten times the average. The client was recently detained for providing falsified passports to illegal immigrants. Which predicate offenses could be considered in the SAR/STR?

Human smuggling/trafficking

Terrorist financing

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The investigator initiated an enhanced KYC investigation on the LLC. The financial institution opened the LLC account a couple of weeks prior to the series of transactions. The names associated with the LLC had changed multiple times since the account opened. A search of those names revealed relations with multiple LLCs. Public records about the LLCs did not show any identifiable business activities. Open-source research identified mixed reports about the brokerage firm. The firm indicated it purchased mutual funds for its clients and dispensed returns to clients. Media reports claimed the firm laundered money by holding for a fee before returning it to
investors. The investigator discovers that the bank has no records pertaining to ownership of the LLC.

What would this mean for the bank and/or investigator?

The bank is out of compliance with CIP regulations.

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During a review of the accounts related to Richard Aston, an investigator notices a high number of incoming payments from various individuals. They also notice that these incoming payments typically occur during large sporting events or conferences. As a result of the account review, of which illegal activity does the investigator have reasonable grounds to suspect Richard Aston?

Aftermarket sales of entertainment admission tickets

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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?

The responsibility and authority in the structure

The general purpose behind the structure

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The training department is conducting awareness training for unusual customer identification scenarios. Which two indicators should be included?

The customer opens the account in the name of a family member who begins making large deposits.

The customer’s name and home address cannot be verified

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During the investigation, it was determined that some of the checks were issued to a mother-in-law of a PEP and deposited into her account with the Fl. This customer was not found on the Fl’s PEP list. How should the investigator proceed in this situation”?

Conduct the investigation as usual, since the activity in question is not directly connected to the PEP.

Send a referral to Sanctions/List Screening, or similar department/responsible individual, to ensure that the customer due diligence information is up to date.

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Which information is it best practice to share at the very beginning of a well-written SAR/STR narrative?

The purpose of the SAR/STR narrative and a general description of the known or alleged violation

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Law enforcement (LE) suspects human trafficking to occur during a major sporting event LE officers asked several financial institutions (FIs) to monitor financial transactions occurring before, during, and after the event. An investigator identified a pattern linked to a business. The business’ account received multiple even dollar deposits between midnight and 4:00 AM. They occurred each day for several days prior to the date of the sporting event. Also, large cash deposits, typically between 2,000 USD and 3,000 USD. made by a person to the business’ account occurred in many branches in the days after the sports event. There was little information about the company. The company did not have any history of employee payroll expenses or paying taxes. Expenses from the business account included air travel and hotel expenses. Searches about the person making cash deposits showed little. An online social media platform webpage with the individual’s name showed ads for dates’ and “companionship.” The Fl wants to create an automated alert for human trafficking money laundering after this investigation.

Which activity type should they target?

Multiple deposits between midnight and 4:00 AM

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An EU bank account received 1.8 million EUR from a Swiss bank. The EU bank determines the originator was indicted by U.S. law enforcement, arrested in Switzerland, and extradited for alleged insider trading.

Which is the best reason the EU bank should file a SAR/STR?

The events raise concerns that the payment represents proceeds from insider trading.

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Which payment method for purchasing luxury items is a red flag for potential money laundering?

Cash

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Which scenarios are common to money laundering through online marketplaces and trade-based money laundering?

Over-valuation of the stated price of goods

No evidence of delivery of goods or shipping expenses

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Due to an ever-diversifying business model and multi-jurisdictional footprint, a casino has decided to outsource the source of funds and wealth checks to a third-party provider. Why is it important for the casino to maintain control of the output from the provider?

The casino maintains ultimate responsibility for this activity and should maintain control to avoid non-compliance.

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What action does the USA PATRIOT Act allow the US government to take regarding financial institutions (FIs) that are based outside of the US?

Subpoena documents from FIs that have no presence in the US.

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Which is a key characteristic of the Financial Action Task Force (FATF) Regional Style Bodies for combating money laundering/terrorist financing?

Implementing regional mutual evaluation procedures

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An investigator at a corporate bank is conducting transaction monitoring alerts clearance.

KYC profile background: An entity customer, doing business offshore in Hong Kong, established a banking business relationship with the bank in 2017 for deposit and loan purposes. It acts as an offshore investment holding company. The customer declared that the ongoing source of funds to this account comes from group-related companies.
* X is the UBO. and owns 97% shares of this entity customer;
* Y is the authorized signatory of this entity customer.

This entity customer was previously the subject of a SAR/STR.

KYC PROFILE
Customer Name: AAA International Company. Ltd
Customer ID: 123456
Account Opened: June 2017
Last KYC review date: 15 Nov 2020
Country and Year of Incorporation: The British Virgin Islands, May 2017 AML risk level: High
Account opening and purpose: Deposits, Loans, and Trade Finance
Anticipated account activities: 1 to 5 transactions per year and around 1 million per transaction amount

During the investigation, the investigator reviewed remittance transactions activities for the period from
Jul 2019 to Sep 2021 and noted the following transactions pattern:

TRANSACTION JOURNAL
Review dates: from July 2019 to Sept 2021

For Hong Kong Dollars (HKD) currency:
Incoming transactions: 2 inward remittances of around 1.88 million HKD in total from different third parties
Outgoing transactions: 24 outward remittances of around 9 4 million HKD in total to different third parties

For United States Dollars (USD) currency:
Incoming transactions: 13 inward remittances of around 3.3 million USD in total from different third parties Outgoing transactions: 10 outward remittances of around 9.4 million USD in total to different third parties.

RFI Information and Supporting documents:
According to the RFI reply received on 26 May 2021, the customer provided the bank with the information below:
1) All incoming funds received in HKD & USD currencies were monies lent from noncustomers of the bank.
Copies of loan agreements had been provided as supporting documents. All of the loan agreements were in the same format and all the lenders are engaged in trading business.
2) Some loan agreements were signed among four parties, including among lenders, borrower (the bank’s customer), guarantor, and guardian with supplemental agreements, which stated that the customer, as a borrower, who failed to repay the loan

Which additional information would support escalating this account for closure?

A review of outward remittances reveals the same pattern of several simple steps for each transaction

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Law enforcement (LE) suspects human trafficking to occur during a major spotting event. LE officers asked several financial institutions (FIs) to monitor financial transactions occurring before, during, and after the event. An investigator identified a pattern linked to a business. The business account received multiple even dollar deposits between midnight and 4:00 AM. They occurred each day for several days prior to the date of the sporting event. Also, large cash deposits, typically between 2,000 USD and 3.000 USD. made by a person to the business’ account occurred in many branches in the days after the sports event There was little information about the company. The company did not have any history of employee payroll expenses or paying taxes. Expenses from the business account included air travel and hotel expenses. Searches about the person making cash deposits showed little. An online social media platform webpage with the individual’s name showed ads for dates” and “companionship.”

If the investigator uncovers evidence that foreign nationals are involved in this activity, they should also note the possible presence of:

Human smuggling

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Which are primary purposes of Financial Action Task Force (FATF)-Style Regional Bodies?

Providing expertise and input in FATF policy-making

Promoting effective implementation of FATF recommendations

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In the past 6 months, a small financial institution (Fl) has received regular remittances that are increasing in value from a country with high piracy activity. The Fl's AML officer (AMLO) has also noted that piracy in this country has increased in the same time frame. Which recommendation should the AMLO make?

Conduct an in-depth investigation into accumulated remittance information in the past year to find the trend of such transactions.

An investigator at a bank triggered a review in relation to potential misuse of legal persons and a complex network of corporate entities owned by customer A. For the investigator to provide a holistic view of the underlying risk, which action should be the initial focus of the investigation?

Review the customer due diligence documents of each entity and examine the year of incorporation and on-boarding channel.

Which reputations risk consequence could a financial entity face for violating AML laws?

Monetary penalties

Which statement most accurately characterizes the methods used by transnational criminal organizations?

They routinely engage in many different types of criminal activities as long as they think it will benefit them.

A U.S. financial institution (Fl) receives a grand jury subpoena for a corporate client's account. The Fl should:

Review the corporate account's activity and transactions

A financial institution (Fl) has considered the available relevant factors in a transaction and has determined it will file a SAR/STR. Which is needed to support the contents of the report to the financial intelligence unit?

Low evidentiary threshold about the suspicious activity

A new customer has just been on-boarded in a securities firm. After a few weeks, there are unusual trading patterns that are being flagged. Which pattern is most concerning to the compliance officer?

The customer accumulates securities of a low volume counter in small increments on a weekly basis.

A financial regulator is evaluating the effectiveness of a financial institution's (Fl) anti-financial crime program. Which condition should be met to satisfy the regulator?

The program is drafted using a risk-based approach to avoid the Fl being used as a conduit for criminal activities.

A client with many personal and business deposits with the financial institution (Fl) seeks a business loan. The client wants to guarantee the loan with a trust for which they are the beneficiary. An investigator examines the trust. The trust has many layers, including shell companies in known tax havens. The client's ultimate beneficial ownership claim cannot be validated, and the loan is denied. Two months later, the Fl receives a law enforcement (LE) request on one of the client's business accounts. While reviewing the business account, the Fl receives another LE request on the same account from another agency. The requested information is shared. Three months later, a branch manager receives a request to open a business deposit account related to a complex trust. The manager forwarded the request because of the complexity. The trust was the same as the previously examined trust, but the request came from a different client. The second client also has many accounts with the Fl. Further inspection finds links between the second client and the Paradise Papers. The Papers state the client led illegal activities and committed tax evasion. What steps should the investigator perform in reference to the first client's existing accounts?

Review all client-signed documents relating to all accounts. Perform secondary scans of the client's other owners authorized signers Prepare a relationship flow chart of all existing accounts to better understand the client's activities.

An investigator receives an alert documenting a series of transactions. A limited liability corporation (LLC) wired 59.000,000 USD to an overseas account associated with a state-run oil company. A second account associated with the state-run oil company wired 600,000,000 USD to the LLC. The LLC then wired money to other accounts, a money brokerage firm, and real estate purchases. The investigator initiated an enhanced KYC investigation on the LLC. The financial institution opened the LLC account a couple of weeks prior to the series of transactions. The names associated with the LLC had changed multiple times since the account opened. A search of those names revealed relations with multiple LLCs. Public records about the LLCs did not show any identifiable business activities. Open-source research identified mixed reports about the brokerage firm. The firm indicated it purchased mutual funds for its clients and dispensed returns to clients. Media reports claimed the firm laundered money by holding for a fee before returning it to investors. The investigator discovers that the bank has no records pertaining to ownership of the LLC. What is the total suspicious transaction amount that the investigator should report?

659,000,000 USD

A SAR/STR has been submitted on five transactions conducted on the correspondent banking relationship with ABC Bank. Client Information: Remitter information: DEF Oil Resource Ltd. is the oldest member of the DEF Group. It was founded in 1977 as a general trading business with a primary focus on exports from Africa and North America. The group has business activities that span the entire energy value chain. Their core field of endeavor is centered within the oil and gas industry and its associated sub-sectors. Beneficiary Information: As per the response received from ABC Bank, it was determined that the beneficiaries are related to DEF Oil Resource Ltd. These were created by DEF Oil Resource Ltd. to purchase property in a foreign country on behalf of their senior management as part of a bonus scheme. The purpose behind this payment was for purchase of property in another country. Payment Reference: ABCXXXXX31PZFG2H ABCXXXXXX51PQGEH ABCXXXXXX214QWVG ABCXXXXXX41PSXA2 ABCXXXXXX815QWS3 Concerns: * We are unsure about the country of incorporation of the beneficiaries. * We are concerned about the transactional activity since the payment made towards entities (conducted on behalf of individuals) appears to be possible tax evasion. * There appears to be an attempt to conceal the identity of individuals (senior management), which again raises concerns about the source of funds. * Referring to the response received from ABC Bank, we are unclear about the ultimate beneficiary of funds. * The remitter is involved in a high-risk business, (i.e., oil and crude products trading), and the beneficiary is involved in a real estate business which again poses a higher risk. The monitoring system of the correspondent institution flags the transaction as suspicious activity. The correspondent bank needs to send a request for information to the respondent bank. Which elements should be included in the request?

Details of DEF Oil Resource Ltd parent company and the name(s) of the beneficial owner(s) The account profile of the customer and their KYC data The contract pertaining to the purchase of property in another country

An investigator at a corporate bank is conducting transaction monitoring alerts clearance. KYC profile background: An entity customer, doing business offshore in Hong Kong, established a banking business relationship with the bank in 2017 for deposit and loan purposes. It acts as an offshore investment holding company. The customer declared that the ongoing source of funds to this account comes from group-related companies. * X is the UBO. and owns 97% shares of this entity customer; * Y is the authorized signatory of this entity customer. This entity customer was previously the subject of a SAR/STR. KYC PROFILE Customer Name: AAA International Company. Ltd Customer ID: 123456 Account Opened: June 2017 Last KYC review date: 15 Nov 2020 Country and Year of Incorporation: The British Virgin Islands, May 2017 AML risk level: High Account opening and purpose: Deposits, Loans, and Trade Finance Anticipated account activities: 1 to 5 transactions per year and around 1 million per transaction amount During the investigation, the investigator reviewed remittance transactions activities for the period from Jul 2019 to Sep 2021 and noted the following transactions pattern: TRANSACTION JOURNAL Review dates: from July 2019 to Sept 2021 For Hong Kong Dollars (HKD) currency: Incoming transactions: 2 inward remittances of around 1.88 million HKD in total from different third parties Outgoing transactions: 24 outward remittances of around 9 4 million HKD in total to different third parties For United States Dollars (USD) currency: Incoming transactions: 13 inward remittances of around 3.3 million USD in total from different third parties Outgoing transactions: 10 outward remittances of around 9.4 million USD in total to different third parties. RFI Information and Supporting documents: According to the RFI reply received on 26 May 2021, the customer provided the bank with the information below: 1) All incoming funds received in HKD & USD currencies were monies lent from noncustomers of the bank. Copies of loan agreements had been provided as supporting documents. All of the loan agreements were in the same format and all the lenders are engaged in trading business. 2) Some loan agreements were signed among four parties, including among lenders, borrower (the bank's customer), guarantor, and guardian with supplemental agreements, which stated that the customer, as a borrower, who failed to repay the loan Based on the KYC profile and the transaction journal, the pattern of activity shows a deviation in:

Expected vs. actual activity

A financial institution (Fl) receives an urgent request for information from the financial intelligence unit (Fl country. According to FATF recommendations, which is the best action for the FI to take?

Provide as much information as possible to the FIU immediately

An AML investigator at a bank identifies an unusually high number of deposits from a few customers resulting from the encashment of multiple gambling tickets from a legitimate gambling company. It is noted that the transactions are inconsistent with the customers' profiles and that reverse (corrective) transactions did not occur. Which suspicious activity is most likely?

The winning tickets are traded to criminals who. in turn, use the customers' accounts

During transaction monitoring. Bank A learns that one of their customers. Med Supplies 123, is attempting to make a payment via wire totaling 382,500 USD to PPE Business LLC located in Mexico to purchase a large order of personal protective equipment. Specifically surgical masks and face shields. Upon further verification. Bank A decides to escalate and refers the case to investigators. Bank A notes that, days prior to the above transaction, the same customer went to a Bank A location to wire 1,215,280 USD to Breath Well LTD located in Singapore. Breath Well was acting as an intermediary to purchase both 3-ply surgical masks and face shields from China. Bank A decided not to complete the transaction due to concerns with the involved supplier in China. Moreover, the customer is attempting to send a third wire in the amount of 350,000 USD for the purchase of these items, this time using a different vendor in China. The investigator must determine next steps in the investigation and what actions, if any should be taken against relevant parties. Upon further investigation. Bank As investigator earns that both the Mexico- and Singapore-based companies are linked to the alleged suppliers in China. Which additional indicators would the investigator need to identify to determine if this fits a fentanyl (drug) trafficking typology?

Review of the invoices and transportation documents, provided by the customer, reveal significant discrepancies between the description of goods Review of the account activity reveals that wires were mainly funded by multiple cash deposits, conducted in amounts of 10.000 USD or below

While each is potentially important, which allows an investigations analyst to better write a SAR/STR narrative that is useful to law enforcement?

Including a detailed description of the known or suspected criminal violation or suspicious activity Ensuring all information in the SAR/STR is complete and accurate based on what the institution knows

The investigative department of a financial institution (Fl) receives an internal escalation notice from the remittance department for a SWIFT message requesting a refund due to potential fraud. The notice indicates that a total of three international incoming remittances were transferred to a corporate customer from Country A, in the amount of approximately 5 million EUR for each. The first two incoming remittances had been exchanged into currency B and transferred out to Country B a few days ago. The third incoming remittance has been held by the remittance department. As noted from the KYC profile, the corporate customer is working in the wood industry. with the last account review completed 3 months ago. Since the account's opening. there has been no history of a large amount of funds flowing through the account. The investigator conducts an Internet search and finds that the remitter is a food beverage company. The same morning, the investigator receives a call from a financial intelligence unit (FIU) inquiring about the same incident. The FIU states that it will issue a warrant to freeze the account on the same day. Which steps for documenting the final investigation decision are appropriate for the investigator in this scenario?

Document the investigation process and retain all relevant documents in the case management system.

CLIENT INFORMATION FORM Client Name: ABC Tech Corp Client ID Number: 08125 Name: ABC Tech Corp Registered Address: Mumbai, India Work Address: Mumbai, India Cell Phone: "**"'" Alt Phone: "*""* Email: ........" Client Profile Information: Sector: Financial Engaged in business from (date): 02 Jan 2020 Sub-sector: Software-Cryptocurrency Exchange Expected Annual Transaction Amount: 125,000 USD Payment Nature: Transfer received from clients' fund Received from: Clients Received for: Sale of digital assets The client identified itself as Cryptocurrency Exchange." The client has submitted the limited liability partnership deed. However, the bank's auditing team is unable to identify the client's exact business profile as the cryptocurrency exchange specified by the client as their major business awaits clearance from the country's regulator. The client has submitted documents/communications exchanged with the regulator and has cited the lack of governing laws in the country of their operation as the reason for the delay. During the financial crime investigation, the investigator discovers that some of the customer due diligence (CDD) documents submitted by the client were fraudulent. The investigator also finds that some of the information in the financial institution's information depository is false. What should the financial crime investigator do next?

Escalate to the compliance officer/money laundering reporting officer to file a SAR/STR

A SAR/STR regarding money-mule activity prompts law enforcement action. Under U.S. law, the alleged money mules can be prosecuted:

Even if they were unaware that money was transferred

An investigator is reviewing an alert for unusual activity. System scanning detected a text string within a company customer's account transactions that indicates the account may have been used for a drug or drug paraphernalia purchase Based on the KYC profile, the investigator determines the customer's company name and business type are marketed as a gardening supplies company. The investigator reviews the account activity and notes an online purchase transaction that leads the investigator to a website that sells various strains of marijuana. Additional account review detects cash deposits into the account at the branch teller lines, so the investigator reaches out to the teller staff regarding the transactions. The teller staff member reports that the business customers have frequently deposited cash in lower amounts. The teller, without prompting, adds that one of the transactors would occasionally smell of a distinct scent of marijuana smoke. Which are the best next steps for the investigator to take?

Review the customer's transaction history Check internal KYC information Identify if the customer has opened accounts in an urban city area

A client with many personal and business deposits with the financial institution (Fl) seeks a business loan. The client wants to guarantee the loan with a trust for which they are the beneficiary. An investigator examines the trust. The trust has many layers, including shell companies in known tax havens. The client's ultimate beneficial ownership claim cannot be validated, and the loan is denied. Two months later, the Fl receives a law enforcement (LE) request on one of the client's business accounts. While reviewing the business account, the Fl receives another LE request on the same account from another agency. The requested information is shared. Three months later, a branch manager receives a request to open a business deposit account related to a complex trust. The manager forwarded the request because of the complexity. The trust was the same as the previously examined trust, but the request came from a different client. The second client also has many accounts with the Fl. Further inspection finds links between the second client and the Paradise Papers. The Papers state the client led illegal activities and committed tax evasion. What steps should the investigator take to review the accounts held by the second client who is listed in the Paradise Papers?

Recommend a SAR/STR be filed regarding the second client's use of a questionable trust to open an account Monitor all accounts and entities related to the second client

Law enforcement agents arrive at a broker-dealer's premises with a search warrant. In addition to cooperation with the warrant, which instructions should the person in charge of the broker-dealer provide to their employees?

Take notes on the questions and comments made by the agents

A criminal is engaged in chain hopping while trying to launder ransomware payments. The criminal will likely

Convert the funds to a different type of cryptocurrency

An analyst reviews an alert for high volume Automated Clearing House (ACH) activity in an account. The analyst's initial research finds the account is for a commercial daycare account that receives high volumes of large government-funded ACH transactions to support the programs. The account activity consists of checks (cheques) made payable to individual names in varying dollar amounts. One check indicates rent to another business. An Internet search finds that the daycare company owner has previous government-issued violations for safety and classroom size needs, such as not having enough chairs and tables per enrollee. These violations were issued to a different daycare name. Simultaneous to this investigation, another analyst sends an email about negative news articles referencing local child/adult daycare companies misusing governmental grants. This prompts the financial institution (Fl) to search all businesses for names containing daycare' or care. Text searches return a number of facilities as customers at the Fl and detects that three of these businesses have a similar transaction flow of high volume government ACH funding with little to no daycare expenses. During the investigation, new suspicious patterns and trends related to check cashing are observed. The Fl decides to conduct a training to ensure that 1) the AML program is robust and 2) the training program is relevant and appropriate. Which parties should be trained on emerging trends and red flags?

Financial crimes investigation unit Branch personnel

A SAR/STR on cash activity is filed for a company registered in the Marshall Islands operating a Mediterranean beach bar and hotel. The company has three nominee directors, one nominee shareholder, and another individual declared as both the beneficial owner and authorized signatory. Which information is key for law enforcement's physical surveillance of cash activity?

The company's operating address The identification details of the beneficial owner and authorized signatory

Which most likely indicates that a business email compromise attack has occurred?

A company sends a recurring payment to a new account number

A KYC specialist from the first line of defense at a bank initiates an internal escalation based on a letter of credit received by the bank. MEMO To: Jane Doe. Compliance Manager, Bank B From: Jack Brown, KYC Specialist, Bank B RE: Concerning letter of credit A letter of credit (LC) was received from a correspondent bank. Bank A. in Country A. in Asia with strict capital controls, providing guarantee of payment to Bank B's client for the export of 10 luxury cars located in Country B. located in Europe. Bank A's customer is a general in the army where Bank A is headquartered. The information contained in the LC is as follows: * Advising amount per unit 30.000.00 EU *10 units of BMW * Model IX3 * Year of registration: 2020 Upon checks on Bank B's client, the exporter mentioned that the transactions were particularly important, and a fast process would be much appreciated in order to avoid reputational damage to the firm and the banks involved in the trade finance process. The exporter has a longstanding relationship with Bank B and was clearly a good income generator. The exporter indicated that, as a general, the importer was trustworthy. The relationship manager (RM) was contacted to conduct a full review of the exporter and to conduct a site visit. Feedback from the RM: The RM contacted the exporter for a client courtesy visit, but it was rearranged four times as the exporter kept cancelling the appointments. When the exporter was finally pinned down for an interview, employees were reluctant to provide clear answers about the basis of the transaction. The employees were evasive when asked about the wider business and trade activity in the country. Findings from the investigation from various internal and external sources of information: * There were no negative news or sanctions hits on the exporter company, directors, and shareholders. * The registered address of the exporting business was a residential address. * The price of the cats was checked and confirmed to be significantly below the market price of approximately 70,000 EU based on manufacturer's new price guide. * The key controllers behind the exporting company, that is the directors and during the investigation, the investigator determines that a nephew of the general.....

Should be flagged as a senior PEP

Law enforcement (LE) suspects human trafficking to occur during a major sporting event LE officers asked several financial institutions (FIs) to monitor financial transactions occurring before, during, and after the event. An investigator identified a pattern linked to a business. The business' account received multiple even dollar deposits between midnight and 4:00 AM. They occurred each day for several days prior to the date of the sporting event. Also, large cash deposits, typically between 2,000 USD and 3,000 USD. made by a person to the business' account occurred in many branches in the days after the sports event. There was little information about the company. The company did not have any history of employee payroll expenses or paying taxes. Expenses from the business account included air travel and hotel expenses. Searches about the person making cash deposits showed little. An online social media platform webpage with the individual's name showed ads for dates' and "companionship." Which fact should not be included in the SAR/STR narrative?

The time of the cash deposits

During transaction monitoring. Bank A learns that one of their customers. Med Supplies 123, is attempting to make a payment via wire totaling 382,500 USD to PPE Business LLC located in Mexico to purchase a large order of personal protective equipment. Specifically surgical masks and face shields. Upon further verification. Bank A decides to escalate and refers the case to investigators. Bank A notes that, days prior to the above transaction, the same customer went to a Bank A location to wire 1,215,280 USD to Breath Well LTD located in Singapore. Breath Well was acting as an intermediary to purchase both 3-ply surgical masks and face shields from China. Bank A decided not to complete the transaction due to concerns with the involved supplier in China. Moreover, the customer is attempting to send a third wire in the amount of 350,000 USD for the purchase of these items, this time using a different vendor in China. The investigator must determine next steps in the investigation and what actions, if any. should be taken against relevant parties. During the investigation, Bank A receives a USA PATRIOT Act Section 314(a) request related to Med Supplies 123. Which steps should the investigator take when fulfilling the request?

Report to Financial Crimes Enforcement Network (FinCEN) that a match was found without revealing any other details. Report back to the Financial Crimes Enforcement Network (FinCEN) within 15 days of receipt of the request via a secure internet website. Search its records expeditiously to determine whether it maintains(ed) any accounts for the subject(s) listed in the request.

Law enforcement (LE) suspects human trafficking to occur during a major sporting event LE officers asked several financial institutions (FIs) to monitor financial transactions occurring before, during, and after the event. An investigator identified a pattern linked to a business. The business' account received multiple even dollar deposits between midnight and 4:00 AM. They occurred each day for several days prior to the date of the sporting event. Also, large cash deposits, typically between 2,000 USD and 3,000 USD. made by a person to the business' account occurred in many branches in the days after the sports event. There was little information about the company. The company did not have any history of employee payroll expenses or paying taxes. Expenses from the business account included air travel and hotel expenses. Searches about the person making cash deposits showed little. An online social media platform webpage with the individual's name showed ads for dates' and "companionship." The Fl receives a keep open' letter from LE for the identified account and agrees to keep the account open. What is the Fl required to do?

Ensure that the request includes an end date

In a review of the account activity associated with Nadine Kien, an investigator observes a large number of small- to medium-size deposits from numerous individuals from several different global regions. The money is then transferred to a numbered company. Which is the next best course of action for the investigator?

File a SAR/STR on the account activity in relation to a potential funnel account

During transaction monitoring. Bank A learns that one of their customers. Med Supplies 123, is attempting to make a payment via wire totaling 382,500 USD to PPE Business LLC located in Mexico to purchase a large order of personal protective equipment. Specifically surgical masks and face shields. Upon further verification. Bank A decides to escalate and refers the case to investigators. Bank A notes that, days prior to the above transaction, the same customer went to a Bank A location to wire 1,215,280 USD to Breath Well LTD located in Singapore. Breath Well was acting as an intermediary to purchase both 3-ply surgical masks and face shields from China. Bank A decided not to complete the transaction due to concerns with the involved supplier in China. Moreover, the customer is attempting to send a third wire in the amount of 350,000 USD for the purchase of these items, this time using a different vendor in China. The investigator must determine the next steps in the investigation and what actions, if any. should be taken against relevant parties. The investigator is gathering more information to determine if a SAR/STR filing is needed. Which steps are the correct ways of collecting the additional information?

Reach out to the relationship manager asking if more up-to-date customer due diligence information can be collected on the customer Conduct open-source research to determine if the customer and involved counterparties are in the same business field

The intended benefits of section 314(b) of the USA PATRIOT Act include

Participating FIs sharing information about suspicious activity by customers that may have otherwise gone unnoticed Detecting money laundering and TF approaches and schemes across multiple financial institutions (FIs). Obtaining additional information on customers or transactions regarding potential money laundering or terrorist financing (TF)

Sanctions screening requirements include that a financial institution should

Compare customer and transaction records against periodically updated sanctions lists provided by governmental bodies

When crafting internal procedures on writing and submitting SARs/STRs, one should

Consider the guidelines issued by the national financial intelligence unit {FIU) and local regulator and incorporate any country-specific requirements

A SAR/STR has been submitted on five transactions conducted on the correspondent banking relationship with ABC Bank. Client Information: Remitter information: DEF Oil Resource Ltd. is the oldest member of the DEF Group. It was founded in 1977 as a general trading business with a primary focus on exports from Africa and North America. The group has business activities that span the entire energy value chain. Their core field of endeavor is centered within the oil and gas industry and its associated sub-sectors. Beneficiary Information: As per the response received from ABC Bank, it was determined that the beneficiaries are related to DEF Oil Resource Ltd. These were created by DEF Oil Resource Ltd. to purchase property in a foreign country on behalf of their senior management as part of a bonus scheme. The purpose behind this payment was for purchase of property in another country. Payment Reference: ABCXXXXX31PZFG2H ABCXXXXXX51PQGEH ABCXXXXXX214QWVG ABCXXXXXX41PSXA2 ABCXXXXXX815QWS3 Concerns: * We are unsure about the country of incorporation of the beneficiaries. * We are concerned about the transactional activity since the payment made towards entities (conducted on behalf of individuals) appears to be possible tax evasion. * There appears to be an attempt to conceal the identity of individuals (senior management), which again raises concerns about the source of funds. * Referring to the response received from ABC Bank, we are unclear about the ultimate beneficiary of funds. * The remitter is involved in a high-risk business, (i.e., oil and crude products trading), and the beneficiary is involved in a real estate business which again poses a higher risk. When drafting the SAR/STR narrative, the investigator notes several payment references. What additional information should the investigator include in the narrative?

The suspicious accounts and transactions identified

In which case should an investigator avoid escalating a suspicious event to the chief compliance officer and pursue other channels?

A close family member of the chief compliance officer is the beneficiary of a cross-border transfer

The investigations team of a financial institution (Fl) wants to perform enhanced due diligence measures on operations done by a foreign bank related to transactions of companies that export scrap gold and silver. What would be the next best steps for the investigations team?

Ask the respondent bank if it has a risk rating for the exporting companies, if the customer profiles are updated, and if so. when was the last time it was done. Ask the respondent bank if the exporting companies have obtained an official license that permits the exporting of scrap gold and silver

An investigator is reviewing a case generated from the transaction monitoring system, with two large amounts of incoming remittance (IR) to an individual customer. Based on the KYC profile, the customer is a plant manager of a famous multi-national electronics manufacturing firm. As the customer has no similarly large transaction patterns for the past 2 years, the investigator sends an inquiry to the relationship manager (RM) about the nature of the transaction. The RM replies that the transaction is a consultancy fee provided from two different electronics companies with a debit note provided However, there is no detail of service provided on the debit note, and the remitters are two individuals. Which actions should the investigator recommend to mitigate risk?

Conduct enhanced due diligence. Re-evaluate the customer risk profile.

A compliance analyst is reviewing the account activity of a customer that they suspect may be indicative of money laundering activity. Which is difficult to determine solely from the customer's account activity and KYC file?

If there is negative media associated with counterparties

An unusual spike in activity has occurred for a customer who is a supplier of aviation parts to a military force. The customer's current line of business is consistent with the banks records, and no adverse media hits have occurred. Which is the best reason for an investigator to continue an investigation?

The end-user is a military force

A KYC specialist from the first line of defense at a bank initiates an internal escalation based on a letter of credit received by the bank. MEMO To: Jane Doe. Compliance Manager, Bank B From: Jack Brown, KYC Specialist, Bank B RE: Concerning letter of credit A letter of credit (LC) was received from a correspondent bank. Bank A. in Country A. in Asia with strict capital controls, providing guarantee of payment to Bank B's client for the export of 10 luxury cars located in Country B. located in Europe. Bank A's customer is a general in the army where Bank A is headquartered. The information contained in the LC is as follows: * Advising amount per unit 30.000.00 EU *10 units of BMW * Model IX3 * Year of registration: 2020 Upon checks on Bank B's client, the exporter mentioned that the transactions were particularly important, and a fast process would be much appreciated in order to avoid reputational damage to the firm and the banks involved in the trade finance process. The exporter has a longstanding relationship with Bank B and was clearly a good income generator. The exporter indicated that, as a general, the importer was trustworthy. The relationship manager (RM) was contacted to conduct a full review of the exporter and to conduct a site visit. Feedback from the RM: The RM contacted the exporter for a client courtesy visit, but it was rearranged four times as the exporter kept cancelling the appointments. When the exporter was finally pinned down for an interview, employees were reluctant to provide clear answers about the basis of the transaction. The employees were evasive when asked about the wider business and trade activity in the country. Findings from the investigation from various internal and external sources of information: * There were no negative news or sanctions hits on the exporter company, directors, and shareholders. * The registered address of the exporting business was a residential address. * The price of the cats was checked and confirmed to be significantly below the market price of approximately 70,000 EU based on manufacturer's new price guide. * The key controllers behind the exporting company, that is the directors and During the investigation, the investigator determines that a nephew of the general (Bank A's customer) is a customer at Bank B. Which step should the investigator take next?

Flag the nephew as a PEP by association

During a review, an analyst notices discrepancies between a customer's nature of business listed on the business registry and what was stated on the customers application. The analyst should:

Clarify discrepancies noted in the customer's declared profile given the downstream impact on the risk assessment

The fact that one of the transactors occasionally smelled of marijuana smoke

A client at a financial institution deposits large amounts of money into an account, and almost immediately, the funds are then distributed to numerous individuals' accounts. The transaction activity described in the scenario is a pattern of

Deposit trading

Which action is part of the enhanced due diligence process?

Collecting beneficial ownership details regarding the client's account

A national financial intelligence unit (FIU) is undertaking the country risk assessment for the financing of the proliferation of weapons of mass destruction (WMD). The evaluation involves determining the exposure that financial institutions (FIs) have to operations that evade sanctions. Which should be performed by the FIU to assess proliferation financing risk?

Cross-reference the databases of international commerce/logistics transactions between the country and WMD proliferation sanctioned states with the corresponding international financial operations of those transactions Evaluate a sample of the amount of false-positive and false-negative alerts that FIs have regarding proliferation sanctions evasion to determine root causes of non-detection

A compliance officer of a financial institution is reviewing a payment for sanctions compliance between two parties in Europe and Asia. The payment is in Euros and involves the provision of services to a company located in a jurisdiction subject to Office of Foreign Assets Control secondary sanctions. Which factor is most important in determining the compliance officer's response?

The threat of US sanctions against foreign individuals and entities continues to exist despite the absence of a US nexus

How does the Financial Action Task Force (FATF) measure the effectiveness of a country's efforts to combat money laundering and terrorist financing?

Mutual evaluation

A government entity established a trust to provide social welfare programs. The entity wants cash payments made to persons without supporting documentation. These persons would oversee the allocation of funds to beneficiaries without complying with internal disbursement of government funds controls. Which is the main premise for filing a SAR/STR?

The entity is not implementing adequate internal controls according to what is expected, and mishandling of funds could be occurring

Which pattern of activity most strongly indicates an individual is a foreign terrorist fighter?

A large cash advance on a credit card and purchases at travel and sporting goods websites

Which is the first valid step in the Mutual Legal Assistance Treaties international cooperation process?

The central authority of the requesting country sends a letter of request to the central authority of the other country

A bank investigator notices an account receiving multiple deposits from the same employer under different employees' names. A cash withdrawal occurs one day after each deposit. The outcome of this investigation will likely uncover which crime typology?

Bribery and corruption

When writing or reviewing a SAR/STR, it is important to:

Ensure the narrative is kept to the point; easy to read; and addresses the who, what, when, where, why, and how

The law enforcement agency (LEA) of a foreign jurisdiction contacts a financial institution (Fl) regarding one of the Fl's clients. The LEA advises that the client is currently wanted for prosecution as a result of a series of human trafficking charges. What should the Fl do?

Review the client's activity, determine if suspicious activity exists, and report accordingly Inform local LEA and regulator of the request for awareness

An investigator receives an alert documenting a series of transactions. A limited liability corporation (LLC) wired 59.000,000 USD to an overseas account associated with a state-run oil company. A second account associated with the state-run oil company wired 600,000,000 USD to the LLC. The LLC then wired money to other accounts, a money brokerage firm, and real estate purchases. The investigator initiated an enhanced KYC investigation on the LLC. The financial institution opened the LLC account a couple of weeks prior to the series of transactions. The names associated with the LLC had changed multiple times since the account opened. A search of those names revealed relations with multiple LLCs. Public records about the LLCs did not show any identifiable business activities. Open-source research identified mixed reports about the brokerage firm. The firm indicated it purchased mutual funds for its clients and dispensed returns to clients. Media reports claimed the firm laundered money by holding for a fee before returning it to investors. Which information should the investigator review first when examining the wire transaction documentation?

How the wire transfers were initiated (e.g., phone, online, branch visit)

In a SAR/STR narrative concerning Individual A. which statement indicates a product of analysis rather than a fact or judgement?

Individual A made structured cash deposits possibly to circumvent regulatory reporting requirements

Which might suggest misuse of crowdfunding resources by a terrorist?

Multiple small deposits followed by the purchase of airplane tickets

Online payments from a customer's account to three foreign entities trigger an investigation. The investigator knows the funds originated from family real estate after an investment company approached the customer online. Funds were remitted for pre-lPO shares. Which should now occur in the investigation?

Review the structure of the transactions to the three entities

A financial institution (Fl) banks a money transmitter business (MTB) located in Miami. The MTB regularly initiates wire transfers with the ultimate beneficiary in Cuba and legally sells travel packages to Cuba. The wire transfers for money remittances comply with the country's economic sanctions policies. A Fl investigator on the sanctions team reviews each wire transfer to ensure compliance with sanctions and to monitor transfer details. An airline located in Cuba, unrelated to the business, legally sells airline tickets in Cuba to Cuban citizens wanting to travel outside of Cuba. The airline tickets are purchased using Cuban currency (CUC). The MTB wants 100,000 USD worth of CUC. Purchasing CUC from a Cuban bank includes a 4% fee. The MTB contacts the airline to ask if the airline will trade its CUC for USD at a lower exchange fee than the Cuban bank. The airline agrees to a 1% fee. The MTB initiates a wire transfer to the airline which appears as normal activity in the monitoring system because of the business' travel package sales. The investigator recommends that a SAR/STR be filed. What documentation should be referenced in the SAR/STR filing?

Cumulative dollar amount of the wire transfer activity All documents related to the agreement between the airline and the MTB Licensing information regarding the travel agency providing tourist sales to Cuba

Potential indicators of money laundering associated with Trust and Company Service Providers include

Use of legal persons in jurisdictions with strict secrecy laws Multi-jurisdictional wire transfers with no legal purpose

Why is a more robust supervisory approach needed by regulators when overseeing small and medium sized money service businesses (MSBs) compared to larger MSBs for combating terrorist financing (TF)?

Small and medium-sized MSBs are more at risk of allowing transactions linked to TF due to the lack of skilled compliance resources

CLIENT INFORMATION FORM Client Name: ABC Tech Corp Client ID Number: 08125 Name: ABC Tech Corp Registered Address: Mumbai, India Work Address: Mumbai, India Cell Phone: "**"'" Alt Phone: "*""* Email: ........" Client Profile Information: Sector: Financial Engaged in business from (date): 02 Jan 2020 Sub-sector: Software-Cryptocurrency Exchange Expected Annual Transaction Amount: 125,000 USD Payment Nature: Transfer received from clients' fund Received from: Clients Received for: Sale of digital assets The client identified itself as Cryptocurrency Exchange." The client has submitted the limited liability partnership deed. However, the bank's auditing team is unable to identify the client's exact business profile as the cryptocurrency exchange specified by the client as their major business awaits clearance from the country's regulator. The client has submitted documents/communications exchanged with the regulator and has cited the lack of governing laws in the country of their operation as the reason for the delay. Investigators determine the ultimate beneficial owner of ABC Tech Corp is a high-net-worth client. The client owns a real estate agency left to her when her spouse died. The spouse provided seed capital for ABC Tech Corp through a direct 1,000.000 Great British Pound (GBP) deposit. What additional information would trigger filing a SAR/STR?

The funds for the seed capital were in the form of 50 cashier's checks of 10,000 GBP each and 50 money orders of 10,000 GBP

An investigator at a corporate bank is conducting transaction monitoring alerts clearance. KYC profile background: An entity customer, doing business offshore in Hong Kong, established a banking business relationship with the bank in 2017 for deposit and loan purposes. It acts as an offshore investment holding company. The customer declared that the ongoing source of funds to this account comes from group-related companies. * X is the UBO. and owns 97% shares of this entity customer; * Y is the authorized signatory of this entity customer. This entity customer was previously the subject of a SAR/STR. KYC PROFILE Customer Name: AAA International Company. Ltd Customer ID: 123456 Account Opened: June 2017 Last KYC review date: 15 Nov 2020 Country and Year of Incorporation: The British Virgin Islands, May 2017 AML risk level: High Account opening and purpose: Deposits, Loans, and Trade Finance Anticipated account activities: 1 to 5 transactions per year and around 1 million per transaction amount During the investigation, the investigator reviewed remittance transactions activities for the period from Jul 2019 to Sep 2021 and noted the following transactions pattern: TRANSACTION JOURNAL Review dates: from July 2019 to Sept 2021 For Hong Kong Dollars (HKD) currency: Incoming transactions: 2 inward remittances of around 1.88 million HKD in total from different third parties Outgoing transactions: 24 outward remittances of around 9 4 million HKD in total to different third parties For United States Dollars (USD) currency: Incoming transactions: 13 inward remittances of around 3.3 million USD in total from different third parties Outgoing transactions: 10 outward remittances of around 9.4 million USD in total to different third parties. RFI Information and Supporting documents: According to the RFI reply received on 26 May 2021, the customer provided the bank with the information below: 1) All incoming funds received in HKD & USD currencies were monies lent from noncustomers of the bank. Copies of loan agreements had been provided as supporting documents. All of the loan agreements were in the same format and all the lenders are engaged in trading business. 2) Some loan agreements were signed among four parties, including among lenders, borrower (the bank's customer), guarantor, and guardian with supplemental agreements, which stated that the customer, as a borrower, who failed to repay the loan After reviewing the transaction journal, request for information response, and supporting documentation, the investigator determines that additional information is needed. Which additional information should the investigator request?

Source of the incoming funds to the group-related companies

Which are some of the negative impacts from illegal wildlife trade and environmental crimes?

Loss of potential tax proceeds Threats to biodiversity

Which test should be included in a bank's Office of Foreign Assets Control sanctions screening audit program?

Ensuring that all clients with foreign identification are subject to enhanced due diligence

A financial institution (Fl) banks a money transmitter business (MTB) located in Miami. The MTB regularly initiates wire transfers with the ultimate beneficiary in Cuba and legally sells travel packages to Cuba. The wire transfers for money remittances comply with the country's economic sanctions policies. A Fl investigator on the sanctions team reviews each wire transfer to ensure compliance with sanctions and to monitor transfer details. An airline located in Cuba, unrelated to the business, legally sells airline tickets in Cuba to Cuban citizens wanting to travel outside of Cuba. The airline tickets are purchased using Cuban currency (CUC). The MTB wants 100,000 USD worth of CUC. Purchasing CUC from a Cuban bank includes a 4% fee. The MTB contacts the airline to ask if the airline will trade its CUC for USD at a lower exchange fee than the Cuban bank. The airline agrees to a 1% fee. The MTB initiates a wire transfer to the airline which appears as normal activity in the monitoring system because of the business' travel package sales. Which investigative actions should the investigator take concerning the 100.000 USD wire transfer?

Review the wire transfer protocols for this customer Review regulations applicable to foreign currency trading transactions Locate and review licenses, registrations, and account operating agreements associated with the MTB account

Potentially suspicious activity following an increase in the volume of transactions by an import company included outgoing wires to Indonesia and Uganda referencing invoice numbers. Incoming funds included large cash deposits and checks/wires from pet stores, breeders, and private individuals. What financial crime might the bank reference in the SAR/STR?

Illegal wildlife trade

Each month the automated transaction monitoring system generates alerts based on predetermined scenarios. An alert was generated in relation to the account activity of ABC Foundation. Below is the transaction history for ABC Foundation (dates are in DD/MM/YYYY format). The relationship manager for ABC Foundation contacts the client to request more information on the beneficiary of the transfer in Turkey. ABC Foundation advises that this is a not-for-profit charity group called 'Forever Free." Which is the best next step in the investigation?

Check the junsdiction's list of known chanties with connections to terrorist activity

Which reputations risk consequence could a financial entity face for violating AML laws?

Monetary penalties

How does the Asian/Pacific Financial Action Task Force (FATF)-Style Regional Body help its members implement recommendations from the FATF?

Facilitates the adoption and implementation of internationally accepted AMI measures by member jurisdictions Encourages cooperative AML efforts in the region

As part of an internal fraud investigation, an AML officer has decided to interview an employee. Which statement is most consistent with best practices?

Information on the employee can be gathered from coworkers and supervisors before the employee is interviewed.

The compliance learn is reviewing multiple data points to include in its data analytics program to detect shell or front company red flags. Which data points should the compliance team include?

Entities whose principal place of business is a non-residential address Entities transacting with or having relation to tax haven or high-risk countries

A retail bank prepares a yearly AML risk assessment. Which inherent risk factor is likely the most relevant?

The provision of cash services

A SAR/STR has been submitted on five transactions conducted on the correspondent banking relationship with ABC Bank. Client Information: Remitter information: DEF Oil Resource Ltd. is the oldest member of the DEF Group. It was founded in 1977 as a general trading business with a primary focus on exports from Africa and North America. The group has business activities that span the entire energy value chain. Their core field of endeavor is centered within the oil and gas industry and its associated sub-sectors. Beneficiary Information: As per the response received from ABC Bank, it was determined that the beneficiaries are related to DEF Oil Resource Ltd. These were created by DEF Oil Resource Ltd. to purchase property in a foreign country on behalf of their senior management as part of a bonus scheme. The purpose behind this payment was for purchase of property in another country. Payment Reference: ABCXXXXX31PZFG2H ABCXXXXXX51PQGEH ABCXXXXXX214QWVG ABCXXXXXX41PSXA2 ABCXXXXXX815QWS3 Concerns: * We are unsure about the country of incorporation of the beneficiaries. * We are concerned about the transactional activity since the payment made towards entities (conducted on behalf of individuals) appears to be possible tax evasion. * There appears to be an attempt to conceal the identity of individuals (senior management), which again raises concerns about the source of funds. * Referring to the response received from ABC Bank, we are unclear about the ultimate beneficiary of funds. * The remitter is involved in a high-risk business, (i.e., oil and crude products trading), and the beneficiary is involved in a real estate business which again poses a higher risk. While reviewing the account activity, it is noted that several transfers are sent to a company located in an offshore jurisdiction. Which step should the investigator take next?

Request information about the beneficiaries related to the company

A country that does not have strong predicate offenses and is lax in prosecuting AML cases could suffer which social/economic consequence?

Increased organized crime and corruption

An investigator at a corporate bank is conducting transaction monitoring alerts clearance. KYC profile background: An entity customer, doing business offshore in Hong Kong, established a banking business relationship with the bank in 2017 for deposit and loan purposes. It acts as an offshore investment holding company. The customer declared that the ongoing source of funds to this account comes from group-related companies. * X is the UBO. and owns 97% shares of this entity customer; * Y is the authorized signatory of this entity customer. This entity customer was previously the subject of a SAR/STR. KYC PROFILE Customer Name: AAA International Company. Ltd Customer ID: 123456 Account Opened: June 2017 Last KYC review date: 15 Nov 2020 Country and Year of Incorporation: The British Virgin Islands, May 2017 AML risk level: High Account opening and purpose: Deposits, Loans, and Trade Finance Anticipated account activities: 1 to 5 transactions per year and around 1 million per transaction amount During the investigation, the investigator reviewed remittance transactions activities for the period from Jul 2019 to Sep 2021 and noted the following transactions pattern: TRANSACTION JOURNAL Review dates: from July 2019 to Sept 2021 For Hong Kong Dollars (HKD) currency: Incoming transactions: 2 inward remittances of around 1.88 million HKD in total from different third parties Outgoing transactions: 24 outward remittances of around 9 4 million HKD in total to different third parties For United States Dollars (USD) currency: Incoming transactions: 13 inward remittances of around 3.3 million USD in total from different third parties Outgoing transactions: 10 outward remittances of around 9.4 million USD in total to different third parties. RFI Information and Supporting documents: According to the RFI reply received on 26 May 2021, the customer provided the bank with the information below: 1) All incoming funds received in HKD & USD currencies were monies lent from noncustomers of the bank. Copies of loan agreements had been provided as supporting documents. All of the loan agreements were in the same format and all the lenders are engaged in trading business. 2) Some loan agreements were signed among four parties, including among lenders, borrower (the bank's customer), guarantor, and guardian with supplemental agreements, which stated that the customer, as a borrower, who failed to repay the loan Which suspicious activity should the investigator identify during the review of the loan agreements?

Y signed on behalf of the lenders

Which actions should financial institutions perform to ensure proper data governance?

Establish an appropriate data management method for collecting and storing information Ensure the accuracy of customer identification records and transaction records and appropriately manage data as a prerequisite for the effective use of IT systems Periodically validate integrity and accuracy of information used for IT systems such as customer information, customer identification records, and transaction records