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NEW QUESTION # 348
According to Basel Committee on Banking Supervision's Customer Due Diligence for Banks, which of the following should provide an evaluation of a bank's policies and procedures independent from its management?
- A. The Board
- B. The credit risk department
- C. A peer institution
- D. The compliance function
Answer: D
NEW QUESTION # 349
Which of the following are the most suspicious transaction indicators related to casino activities?
1. A client requests a winnings check (cheque) in a third party's name.
2. Acquaintances bet against each other in even-money games and it appears they are intentionally losing to one of the parties.
3. A new client who is a large volume player asks the casino operator about the ability to transfer the funds to other locations in the same country.
4. A client requests the transfer of winnings to the bank account of a third party in a country without an effective anti-money laundering regime.
- A. 2, 3, and 4 only
- B. 1, 2, and 3 only
- C. 1, 3, and 4 only
- D. 1, 2, and 4 only
Answer: D
Explanation:
The most suspicious transaction indicators related to casino activities are:
A client requests a winnings check (cheque) in a third party's name. This could indicate an attempt to conceal the source or ownership of the funds, or to evade reporting requirements.
Acquaintances bet against each other in even-money games and it appears they are intentionally losing to one of the parties. This could indicate a scheme to launder money through the casino by transferring funds from one party to another without attracting attention.
A client requests the transfer of winnings to the bank account of a third party in a country without an effective anti-money laundering regime. This could indicate an attempt to move funds to a high-risk jurisdiction or to a person or entity that is involved in illicit activities.
The option that is not suspicious is:
A new client who is a large volume player asks the casino operator about the ability to transfer the funds to other locations in the same country. This could be a legitimate inquiry from a high-net-worth individual who travels frequently and wants to access their funds conveniently.
References:
ACAMS CAMS Certification Video Training Course - Exam-Labs1
Exam CAMS: Certified Anti-Money Laundering Specialist (the 6th edition)2 ACAMS Study Guide for the Certification Examination, 6th Edition, Chapter 8, page 173
https://www.acams.org/wp-content/uploads/2019/08/ACAMS-Study-Guide-6th-Edition-Chapter-8.pdf
NEW QUESTION # 350
What does designing a country as being of "prime money laundering concern" allow the U.S. government to do?
- A. Ensure the inclusion of that country onto FATF's Non-Cooperative Country and Territory list
- B. Obtain transactional information from U.S.-owned subsidiary banks located outside the U.S.
- C. Ensure the inclusion of that country into the office of Foreign Asset Control country sanctions programs
- D. Close some or all correspondent or payable-through accounts
Answer: D
Explanation:
Designating a country as being of "prime money laundering concern" allows the U.S. government to impose one or more of five special measures under Section 311 of the USA PATRIOT Act12. These special measures are intended to protect the U.S. financial system from the risks posed by the designated country, such as money laundering, terrorist financing, or other illicit activities. The fifth special measure, which is the most severe, authorizes the Treasury Department to prohibit U.S. financial institutions from opening or maintaining correspondent or payable-through accounts for foreign financial institutions that involve the designated country12. Correspondent accounts are accounts that enable foreign banks to access the U.S. financial system and provide services to their customers, while payable-through accounts are accounts that allow foreign banks to offer their customers direct access to the U.S. financial system3. Closing these accounts effectively cuts off the designated country from the U.S. financial system and imposes significant costs and burdens on its financial sector.
References:
1: 311 Actions | U.S. Department of the Treasury
2: Press Releases - U.S. Department of the Treasury
3: Anti-Money Laundering Laws and Regulations USA 2023-2024
NEW QUESTION # 351
Which three circumstances are indicators for defining a customer as required additional diligence according to the Wolfsberg Principles on Private Banking? Choose 3 answers
- A. Persons residing in a having funds from countries with inadequate AML standards
- B. Persons determined to be Politically Exposed Persons (PEPs)
- C. Persons engaged in business activities known to be susceptible to money laundering
- D. Persons who receive funds from a correspondent banking relationship
Answer: A,B,C
NEW QUESTION # 352
Which three methods are commonly used by an accountant to launder money? (Choose three.)
- A. Acting as a conduit for transferring cash between accounts
- B. Understanding income to take a tax loss
- C. Overstating income to hide excess cash
- D. Acting as a designee for someone who wishes to hide their identity
- E. Representing a client court
Answer: A,C,D
Explanation:
Accountants can be involved in money laundering schemes in various ways, either knowingly or unknowingly.
Some of the common methods that accountants can use to launder money are:
Overstating income to hide excess cash: This method involves inflating the revenues or profits of a business to conceal the origin of illicit funds. For example, an accountant can create fake invoices or receipts to justify the deposit of cash from illegal sources into the business account. This can make the cash appear as legitimate income from the business operations.
Acting as a conduit for transferring cash between accounts: This method involves using the accountant's own account or a third-party account to move funds around and obscure the audit trail. For example, an accountant can receive cash from a client and deposit it into their own account, then transfer it to another account or withdraw it in a different location. This can make it difficult to trace the source and destination of the funds.
Acting as a designee for someone who wishes to hide their identity: This method involves using the accountant's name or credentials to open accounts or conduct transactions on behalf of a client who wants to remain anonymous. For example, an accountant can act as a nominee director or shareholder for a shell company that is used to launder money. This can make it appear as if the accountant is the owner or beneficiary of the funds, while the actual owner or beneficiary is hidden.
References:
Money Laundering: What It Is and How to Prevent It - Investopedia, The Process of Laundering Money Revealed: accountants aiding money laundering - Accountancy Age, Accountants' methods Accountants in the anti-money laundering front line, Accountants' obligations
https://www.ojp.gov/pdffiles1/Digitization/119840NCJRS.pdf
NEW QUESTION # 353
Which three criteria does a shell bank meet according to the Wolfsberg Principles on Correspondent Banking?
Choose 3 answers.
- A. It is not subject to inspection by the banking authority that licensed it to conduct banking activities
- B. It does not employ one or more individuals at its fixed address where it is authorized to conduct business or maintain operating records at that address
- C. It does not conduct business at a fixed address in a jurisdiction in which it is authorized to conduct business.
- D. It is not subject to AML laws that require it to implement an AML program
Answer: A,B,D
NEW QUESTION # 354
Typical events to identify and investigate potential AML activities include: (Select Three.)
- A. accounts going to dormant status.
- B. subpoenas requesting information for civil cases.
- C. internal tips from employees of the bank about potential suspicious activity.
- D. blocked transactions involving individuals included in the Office of Foreign Assets Control Specially Designated Nationals and Blocked Persons List.
- E. requests from law enforcement agencies.
- F. alerts triggered by the automated AML monitoring system.
Answer: C,D,F
Explanation:
Explanation
Typical events to identify and investigate potential AML activities include: A) blocked transactions involving individuals included in the Office of Foreign Assets Control Specially Designated Nationals and Blocked Persons List; B) internal tips from employees of the bank about potential suspicious activity; and C) alerts triggered by the automated AML monitoring system [1]. Blocked transactions are those which involve individuals included on the Specially Designated Nationals and Blocked Persons List - this is a list maintained by the Office of Foreign Assets Control of individuals who are subject to economic or trade sanctions [1], or who may be involved in money laundering or terrorist activities [2]. Internal tips are those which are provided by employees of the bank who may have observed suspicious activity, or have reason to believe that certain transactions or activities may be related to potential money laundering. Alerts triggered by the automated AML monitoring system are those which are generated by the banks systems and processes which are designed to detect potential money laundering.
NEW QUESTION # 355
The anti-money laundering compliance officer for a small money transmitter has several agent locations in the same geographic area in the United States. The customers are immigrants from Country A and the majority of the funds are remitted to Country A.
In a meeting with one of the agents, it is recently discovered that two new customers have been coming in three times a week and sending funds to the same recipient in Country
B. Each cash transaction always totals exactly
$8,000.
What should alert the agent to possible money laundering activity by the two customers?
- A. They have been coming in three times a week
- B. Each of their transactions is just below the cash reporting threshold
- C. It is unusual for customers to remit to Country B
- D. They remit funds to the same person
Answer: D
NEW QUESTION # 356
A money transmitter's nation-wide agent network remits funds to a country in Africa on behalf of an immigrant community based in the United States. A terrorist group is known to operate openly in this African country. In reviewing transaction records, the compliance officer detects a pattern where two customers together visit the same agent each week and remit the same amount of funds. $2,500, to the same recipient in the country in Africa.
What should alert the compliance officer to possible money laundering or terrorist financing activity by the two customers?
- A. The customers always visit together.
- B. The customers always visit the same agent.
- C. The funds are being sent to the same recipient each week.
- D. The dollar amount of each transaction is just below the record keeping threshold.
Answer: D
NEW QUESTION # 357
A bank located in Arizona is considering a loan application for a new client. The collateral for the loan is a property in Florida.
The loan will be in the name of a limited company (LLC) whose ownership is not disclosed to the bank. The LLC was established by a New York-based attorney.
The loan will be repaid by the LLC in monthly wire transfers of $9,000 which is more than the required monthly payment.
Which aspect indicates potential for money laundering?
- A. The LLC's ownership is not disclosed to the bank
- B. The repayment in the amount of $9,000 indicates potential structuring
- C. The collateral, a property in Florida, is not located in Arizona
- D. The attorney associated with the account is outside the bank's lending area
Answer: A,B
Explanation:
According to the ACAMS study guide, one of the red flags for money laundering in loan transactions is "the use of shell companies or other legal entities whose ownership is not transparent or whose beneficial owners are unknown" (p. 223). Money launderers may use such entities to hide their identity and the source of their funds, or to create complex layers of transactions to obscure the trail of money. The other options are not necessarily indicative of money laundering risk, as they could be explained by legitimate factors such as the location of the property, the repayment schedule, or the choice of attorney.
References:
ACAMS. (2020). Study Guide for the Certification Examination for Anti-Money Laundering Specialists (6th ed.). Miami, FL: ACAMS.
MLO Mentor: Anti-Money Laundering 1
Compliance Obligations of Certain Loan or Finance Company Affiliates of Federally Regulated Banks and Other Financial Institutions 2
NEW QUESTION # 358
Which three criteria does a shell bank meet according to the Wolfsberg Principles on Correspondent Banking? Choose 3 answers.
- A. It is not subject to inspection by the banking authority that licensed it to conduct banking activities
- B. It does not employ one or more individuals at its fixed address where it is authorized to conduct business or maintain operating records at that address
- C. It is not subject to AML laws that require it to implement an AML program
- D. It does not conduct business at a fixed address in a jurisdiction in which it is authorized to conduct business.
Answer: B,C,D
NEW QUESTION # 359
Outgoing foreign transactions of similar amounts trigger a monitoring alert for a customer's accounts. During the evaluation of the accounts, the bank discovers the wire transfers were very small amounts and occurred within the last 3 months following a long period of inactivity. The wire transfers appear to originate from legal sources. To assess the potential of terrorist financing, the institution must ensure the:
- A. account holder does not reside in a country included on the U.S. State Department State Sponsors of Terrorism List.
- B. beneficiaries of transfers are not included on the Transparency International List.
- C. account holder presents proof the funds are legal.
- D. beneficiaries of transfers are not on a terrorist watch list.
Answer: D
NEW QUESTION # 360
A suspicious transaction report filed on a car dealer structuring deposits initiates a criminal investigation. The dealer changes branches and begins placing transactions with a frontline employee to whom the dealer has given numerous gifts.
This employee handles all of the dealer's structured deposits and does not report the suspicious activity internally.
The competent authority has advised the anti-money laundering specialist to avoid tipping off the employee until the investigation is finalized.
What action should the specialist take next?
- A. Recommend the immediate termination of the employee.
- B. Advise that the dealer's accounts should be closed.
- C. Consult with senior management and the legal advisor.
- D. Inform the institution's regulatory agency of the situation.
Answer: C
NEW QUESTION # 361
In 2004, Consolidated KYC Risk Management was issued by the Basel Committee on Banking Supervision (BCBS). What is a key message in this document?
- A. Policies and procedures should be designed not merely to comply strictly with all relevant laws and regulations
- B. KYC Risk Management required a yearly consolidation effort
- C. KYC Risk Management means as established decentralized process for promulgating policies and procedures
- D. Consolidated KYC risk management for a group is critical and trumps jurisdictional rules hat limit information sharing
Answer: A
NEW QUESTION # 362
Which of the following reflect money laundering risk indicators in relation to a securities account?
1. A high level of activity in that securities account immediately followed by a high volume of securities transactions.
2. Frequent wire transfers into an account immediately followed by debit card transactions.
3. Frequent wire transfers into an account immediately followed by checks (cheques) or other payment instruments drawn on the account.
- A. 2 and 3 only
- B. 1 and 3 only
- C. 1, 2, and 3
- D. 1 and 2 only
Answer: C
Explanation:
All of the three options reflect money laundering risk indicators in relation to a securities account, as they could suggest attempts to conceal the source or destination of illicit funds, or to avoid detection or reporting by authorities. According to the FATF Guidance for a Risk-Based Approach for the Securities Sector1, some of the common indicators of money laundering in securities transactions include:
A high level of activity in securities accounts inconsistent with the customer's profile or investment objectives Frequent or large movements of funds between accounts or institutions, especially involving high-risk jurisdictions or offshore locations Use of debit cards or other payment instruments to access funds from securities accounts Use of complex or unusual transactions or structures without apparent economic or legal purpose References: 1 FATF Guidance for a Risk-Based Approach for the Securities Sector, pages 43-44.
NEW QUESTION # 363
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