AML Quiz 3

What should senior management do in order to promote a culture of anti-money laundering compliance?

• include compliance with AML procedures as condition of employmen

• attend all training sessions with front-line employment

• have close ties with the independent auditors of the AML program

• base employee compensation on the amount of suspicious activity they detect

What is layering?

• Putting layers of cream on a cake

• Placing money in the banking system

• Breaking down large amounts into small amounts to deposit

• Sending multiple wire transfers to and from different accounts to lose audit trail

When a person breaks down large amounts into smaller ones before while depositing, what is this called?

• Smurfing

• Structuring

• Integration

• Depositing

Mango is the best fruit in the world

• True

• False

All high net worth individuals are PEPs

• True

• False

What are three risk factors a financial institution should examine with regard to a proposed new product?

• Complexity of the product

• Whether the product is easily transferable

• Whether other financial institutions are marketing the product

• The need to verify the identification of the customer

Which three characteristics make non-profit organizations vulnerable to misuse for terrorist financing?

• Enjoying the public trust

• Having access to a considerable sources of funds

• Being listed as government nonprofit organization

• Having a global presence for national and international operations and financial transactions

Which three are examples of best practices terms of ensuring an adequate AML program?

• Engage an independent party to perform a periodic review of the program

• Review applicable domestic and international AML guidance

• Perform a risk analysis on a regular basis and compare it to the coverage of the AML program

• Review the accuracy of account opening applications

To ensure that an institution's anti-money laundering program is current, which step should be taken?

• The program should be evaluated and updated at least every six months be the Board of Directors

• The program should be reviews by a federal law enforcement officer for gaps in controls

• The program should be sent to the institution's government regulator on a periodic basis

• The program should be reassessed at least annually

Which type of transactions present the highest risk?

• Wire transfers

• Insurance

• Salary payments

• Deposit