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1
Q

What does AML stand for?

A

Anti-Money Laundering

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2
Q

True or False: Money laundering is the process of making illegally obtained money appear legitimate.

A

True

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3
Q

Fill in the blank: The three stages of money laundering are placement, layering, and ______.

A

integration

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4
Q

What is the primary goal of anti-money laundering regulations?

A

To prevent and detect money laundering activities.

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5
Q

Which organization is known for setting international AML standards?

A

Financial Action Task Force (FATF)

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6
Q

What does KYC stand for in the context of AML?

A

Know Your Customer

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7
Q

True or False: KYC procedures are only required for banks.

A

False

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8
Q

Multiple choice: Which of the following is a common method used in the layering stage of money laundering? A) Structuring B) Smurfing C) Shell companies D) All of the above

A

D) All of the above

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9
Q

What is the purpose of a Suspicious Activity Report (SAR)?

A

To report suspicious transactions that may indicate money laundering or other financial crimes.

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10
Q

Fill in the blank: Money laundering can involve the use of ______ to obscure the origins of funds.

A

complex financial transactions

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11
Q

What is ‘placement’ in the context of money laundering?

A

The initial stage where illicit funds are introduced into the financial system.

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12
Q

True or False: AML compliance is solely the responsibility of financial institutions.

A

False

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13
Q

Which U.S. law requires financial institutions to implement AML programs?

A

Bank Secrecy Act (BSA)

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14
Q

Multiple choice: Which of the following is NOT a type of money laundering technique? A) Trade-based money laundering B) Real estate laundering C) Tax evasion D) Structuring

A

C) Tax evasion

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15
Q

What is the role of the Financial Crimes Enforcement Network (FinCEN)?

A

To collect and analyze information about financial transactions to combat money laundering and other financial crimes.

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16
Q

Fill in the blank: The ______ is a global standard-setting body for AML and counter-terrorist financing.

A

FATF

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17
Q

What does the term ‘smurfing’ refer to in money laundering?

A

Breaking up large amounts of illicit money into smaller, less suspicious amounts.

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18
Q

True or False: Money laundering can only occur in cash transactions.

A

False

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19
Q

What is the main purpose of conducting a risk assessment in AML?

A

To identify and assess the risks of money laundering and terrorist financing.

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20
Q

Fill in the blank: Financial institutions must maintain records of transactions for a minimum of ______ years.

A

five

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21
Q

What is the significance of the ‘Customer Due Diligence’ (CDD) process?

A

To verify the identity of customers and assess their risk for money laundering.

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22
Q

Multiple choice: Which entity typically enforces AML regulations? A) Central Bank B) Financial Regulatory Authority C) Both A and B D) None of the above

A

C) Both A and B

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23
Q

True or False: Enhanced Due Diligence (EDD) is required for higher-risk customers.

A

True

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24
Q

What is the role of a compliance officer in AML?

A

To oversee the implementation of AML policies and ensure compliance with regulations.

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25
Fill in the blank: A ______ is a legal entity that exists only on paper and is used to disguise ownership.
shell company
26
What is 'integration' in the money laundering process?
The final stage where illicit funds are reintroduced into the economy as legitimate funds.
27
True or False: All countries have the same AML laws and regulations.
False
28
What is the purpose of AML training for employees?
To educate them about recognizing and reporting suspicious activities.
29
Multiple choice: Which of the following is a common red flag for money laundering? A) Large cash deposits B) Transactions with no clear economic purpose C) Frequent international wire transfers D) All of the above
D) All of the above
30
What does 'politically exposed person' (PEP) mean in AML context?
An individual who holds a prominent public position and may pose a higher risk for money laundering.
31
Fill in the blank: The ______ is responsible for enforcing the Bank Secrecy Act in the United States.
FinCEN
32
True or False: Money laundering activities can only be conducted by organized crime groups.
False
33
What is the main objective of the FATF's 40 Recommendations?
To provide a comprehensive framework for AML and counter-terrorist financing measures.
34
What does the term 'layering' refer to in money laundering?
The process of concealing the origins of illicit funds through a series of complex transactions.
35
Fill in the blank: The ______ is a list of individuals and entities subject to sanctions.
OFAC list
36
What is the purpose of transaction monitoring systems in AML?
To detect unusual or suspicious patterns in financial transactions.
37
True or False: All suspicious transactions must be reported to authorities.
True
38
What is a 'money mule'?
An individual who transfers illegally obtained money on behalf of others.
39
Multiple choice: Which of the following is an example of a non-financial business that must comply with AML regulations? A) Real estate agents B) Car dealerships C) Casinos D) All of the above
D) All of the above
40
What is the significance of 'source of funds' in AML compliance?
To verify the legitimacy of the money being deposited or used in transactions.
41
Fill in the blank: The ______ Act requires financial institutions to report cash transactions over $10,000.
Bank Secrecy
42
True or False: Money laundering can have a negative impact on economic stability.
True
43
What does 'transaction laundering' refer to?
The process of disguising the origins of illicit funds by processing them through legitimate businesses.
44
Multiple choice: Which of the following is a characteristic of money laundering? A) Concealment B) Complexity C) Illegitimacy D) All of the above
D) All of the above
45
What is 'asset forfeiture' in the context of AML?
The legal process of seizing assets derived from illicit activities.
46
Fill in the blank: Financial institutions must conduct due diligence on customers to assess their ______.
risk
47
True or False: The main purpose of AML laws is to generate revenue for the government.
False
48
What is the role of law enforcement in AML efforts?
To investigate and prosecute money laundering and related financial crimes.
49
Multiple choice: Which of the following is NOT a method of money laundering? A) Currency exchange B) Loan sharking C) Selling legitimate goods D) All of the above are methods
C) Selling legitimate goods
50
What does 'risk-based approach' mean in AML?
A strategy that allocates resources based on the level of risk associated with customers and transactions.
51
Fill in the blank: AML programs should include ongoing ______ to stay updated on regulations and risks.
training
52
True or False: Financial institutions can ignore AML regulations if they operate in a low-risk jurisdiction.
False
53
What is the significance of sanctions lists in AML?
To prevent transactions with individuals and entities involved in criminal activities.
54
Multiple choice: Which of the following can be a source of illicit funds? A) Drug trafficking B) Human trafficking C) Fraud D) All of the above
D) All of the above
55
What is 'due diligence' in the context of AML?
The process of thoroughly investigating and verifying customer information.
56
Fill in the blank: The ______ is responsible for implementing and enforcing AML laws in a country.
government
57
True or False: AML compliance is a one-time process.
False
58
What is the purpose of a compliance program in AML?
To establish policies and procedures that ensure adherence to AML regulations.
59
Multiple choice: Which of the following is an example of a red flag in AML? A) Unusual account activity B) Large withdrawals C) Frequent changes in account ownership D) All of the above
D) All of the above
60
What does 'suspicious transaction' mean?
A transaction that raises concerns about its legitimacy and may indicate money laundering.
61
Fill in the blank: The acronym FATF stands for ______.
Financial Action Task Force
62
True or False: Money laundering is only a concern for developed countries.
False
63
What is the significance of international cooperation in AML efforts?
To effectively combat money laundering that crosses borders.
64
Multiple choice: Which of the following is a consequence of money laundering? A) Increased crime B) Economic instability C) Erosion of public trust D) All of the above
D) All of the above
65
What is the role of internal audits in AML compliance?
To assess the effectiveness of AML programs and ensure compliance with regulations.

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