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CAMS > Module 2 (Part 2) > Flashcards

Module 2 (Part 2) Flashcards

1
Q

What does the 2012 Revision of the FATF 40 Recommendations state

A

some customer types pose heightened risks, and recommend additional customer due diligence on specific customers and activities

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2
Q

What are the 6 areas listed

A
  1. PEPs
  2. Cross-Border Correspondent Banking
  3. Money or Value Transfer Services
  4. New technologies
  5. Wire Transfers
  6. Transparency and Beneficial Ownership of Legal persons and arrangements
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3
Q

Appropriate steps must be taken to _________ PEPs

A

identify

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4
Q

including what 3 steps

A
  1. obtaining senior management approval of such business relationships
  2. taking measures to establish the sources of wealth and funds
  3. conducting ongoing monitoring
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5
Q

Regarding cross-border correspondent banking, appropriate steps must be taken to understand what 4 things about the institutions

A
  1. The institutions business,
  2. reputation
  3. Supervision,
  4. AML controls
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6
Q

What should countries ensure about Money or Value Transfer Services

A

that they are licensed or registered

Subject to AML requirements

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7
Q

What should countries and financial institutions assess regarding new technologies

A

the risks associated with the development of new products, business practices, deliver mechanisms, and technology

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8
Q

What should countries require regarding wire transfers

A

they should require financial institutions to obtain and send required and accurate originator, intermediary, and beneficiary information with wires

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9
Q

what should financial instutions monitor wires for

A

incomplete information and take appropriate measures

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10
Q

what should they also monitor wires for

A

for those involving parties designated by the UN Security council

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11
Q

what should they do if they involve such parties

A

take freezing actions or otherwise prohibit the transactions from occurring

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12
Q

Regarding transparency and beneficial ownership of legal persons and arrangements what should countries do

A

take appropriate measures to prevent the misuses of legal persons for money laundering or terrorist financing,

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13
Q

including what

A

ensuring information about the BO and control of such legal persons is available to competent authorities

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14
Q

particularly with regard to what types of legal persons

A

legal persons that can issue bearer shares or have nominee shareholders or directors

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15
Q

how many members is FATF currently comprised of

A

35 member jurisdictions and 2 regional organizations

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16
Q

what are the 2 regional organizations

A

the gulf cooperation council

European commission

17
Q

What else are there in the organization

A

31 associate members or observers of FATF

18
Q

What are the first 10 members of FATF

A
  1. Argentina
  2. Australia
  3. Austria
  4. Belgium
  5. Brazil
  6. Canada
  7. China
  8. Denmark
  9. Finland

10 France

19
Q

What are the second group of 10

A
  1. Germany
  2. Greece
  3. Hong Kong (China)
  4. Iceland
  5. India
  6. Ireland
  7. Italy
  8. Japan
  9. Korea
  10. Luxembourg
20
Q

What is the third group of 10

A
  1. Malaysia
  2. Mexico
  3. Netherlands
  4. New Zealand
  5. Norway
  6. Portugal
  7. Russian Federation
  8. Singapore
  9. South Africa
  10. Spain
21
Q

What are the final 5

A
  1. Sweden
  2. Switzerland
  3. Turkey
  4. United Kingdom
  5. United States
22
Q

What is the primary global standard-setter for the prudential regulation of banks

A

The Basel Committee on Banking Supervision

23
Q

What kind of forum does it provide

A

cooperation on banking supervisory matters

24
Q

what is the committees mandate

A

to strengthen the regulation, supervison and practices of banks worldwide with the purpose of enhancing financial stability

25
Q

What paper did the basel committee publish in october of 2001

A

Customer Due Diligence for Banks

26
Q

what are the 4 areas it addresses

A
  1. Importance of KYC standards for supervisors and banks
  2. Essential elements of KYC standards
  3. The role of supervisors
  4. Implementation of KYC standards in a cross-border context
27
Q

what does the paper specify as the four key elements of KYC program

A
  1. Customer identification
  2. Risk management
  3. Customer acceptance
  4. Monitoring
28
Q

Banks should not only establish the identity of their customers, but what

A

should also monitor account activity to identify transactions that do not conform to the normal or expected transactions for that customer or type of account

29
Q

Should numbered accounts be prohibited?

A

No

30
Q

but what

A

should be subjected to exactly the same KYC procedures as other customer accounts

31
Q

What does the paper also identify

A

specific customer identification issues related to higher risk customers

32
Q

what should banks develop

A

customer acceptance policies and procedures

33
Q

what should these policies and procedures describe

A

background, country of origin, business activities, and other risk indicators

34
Q

what is the second bullet point

A

banks should use standard identification procedures when dealing with non face to face customers

35
Q

what is the third

A

banks should provide periodic bank-wide employee training that explains the importance of the KYC policies and AML requirements

36
Q

what is the final bullet point

A

conduct continued monitoring of high risk accounts by compliance personnel to obtain a greater understanding of the customers’ “normal activities” and to enable the updating of identification papers and the detection of suspicious transaction patterns

CAMS (19 decks)

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