AML Quiz for Crowe Mak 4

Choose three statements that are true?

• FIs are responsible for money laundering or suspicious transactions taking place within their accounts

• Tipping off is punishable

• The dirty money undergoing money laundering will not be confiscated because of privacy laws

• Staff who intentionally ignore clear signs of money laundering may be punished with imprisonment and/or fines.

What is willful blindness defined as?

• Failing to file a Suspicious Transaction Report for dealing with companies or financial institutions from offshore tax havens.

• Not following customer identification procedures as set out in the institution’s procedures

• Deliberate avoidance of knowledge of the facts or ignoring obvious money laundering red flags.

• Deliberate avoidance of a customer on the assumption that his behavior suggested a potential threat as money launderer

What is the reasoning behind implementing a “risk-based anti-money laundering approach”?

• It will keep the regulators focused on money laundering controls in sectors beyond banks

• Institutions can best use their limited resources to focus on matters where the money laundering risks

  are highest

• A quantitative approach will generate better results than a qualitative approach

• It allows the institution to focus on selling products that have a better return on investment.

According to the FATF 40 Recommendations, “designated non-financial businesses and professions” include:

• Casinos, real estate agents and dealers in precious stones

• Money service businesses, gatekeepers, and issuers of electronic money.

• Dealers in precious metals, lawyers, commodity futures traders

• Life insurance companies, real estate agents and notaries

An AML compliance officer is looking to establish a suspicious activity reporting process at her small institution. Which of the following would be the best course of action?

• Allow employees to refer suspicious activity directly to the government authorities to file as quickly as possible.

• Have employees refer all unusual activity to the internal audit department to assess whether the activity should be reported.

• Have employees refer all unusual activity to senior management to ensure they are aware of all unusual activity within the organization.

• . Have employees refer all unusual activity to AML Officer so that she may conduct an investigation into what needs to be reported to authorities.

Establishing compliance as a key responsibility for every employee of a financial institution is best performed how?

• By having senior management require compliance as a condition of employment

• . By having auditors conduct testing on employee compliance

• By pointing out the regulatory consequences of noncompliance in training

• By having the AML officer personally tell associates of their responsibilities

Which is the best way to assess a compliance program?

• Sales staff surveys on AML efforts, customer due diligence error rates, quality assurance testing on STR filings

• Customer due diligence error rates, sales staff surveys on AML efforts, percent of products and services monitored for suspicious activity.

• Quality assurance testing on STR filings, sales staff surveys on AML efforts, percentage of products and services monitored for suspicious activity.

• Customer due diligence error rates, quality assurance testing on STR filings, percentage of products and services monitored for suspicious activity

When assessing a new product, which of the following should be considered as part of the assessment from an AML perspective?

• The inherent risk of the product, the control environment to mitigate the risks presented by the product, the residual risk of the product in light of the controls.

• . The control environment to mitigate the risks presented by the product, the residual risk of the product in light of the controls and the projected profitability of the product.

• The projected profitability of the product, the control environment to mitigate the risks presented by the product and the Inherent risk of the product.

• The residual risk of the product in light of the controls, the inherent risk of the product and the projected profitability of the product.

A compliance officer is looking to provide some way to report on the effectiveness of the AML program to senior management. Which of the following would be the most appropriate means to keep senior management informed of these efforts?

• Develop a report containing metrics that reflect the effectiveness of various key program elements.

• Provide a summary of all reported suspicious activity.

• Rely on the internal audit reporting and regulatory examinations.

• Provide detailed training to senior management on their AML obligations

The compliance officer is trying to put together a set of procedures for handling the review of potentially suspicious transactions. What should the compliance officer recommend be part of these procedures?

• That the institution rely primarily on the back office to identify suspicious trends in account activity

• That the institution make it the responsibility of all employees to identify suspicious activity.

• That the institution rely primarily on the account relationship managers of accounts to identify suspicious activity

• That the institution rely on the dissemination of red flags in each area of the bank to cover all possible suspicious activity