Anti Money Laundering Regulatory Requirements Quiz

What is the purpose of anti money laundering regulations?

• To promote the use of cash in financial transactions

• To prevent illegal money from being disguised as legitimate income or assets.

• To encourage tax evasion

• To make it easier for criminals to hide their illegal income

Name one regulatory body responsible for enforcing anti money laundering laws.

• Financial Action Task Force (FATF)

• Federal Bureau of Investigation (FBI)

• International Monetary Fund (IMF)

• World Health Organization (WHO)

What are the consequences of non-compliance with anti money laundering regulations?

• Rewards and bonuses for the organization

• No consequences at all

• Heavy fines, legal action, and damage to the reputation of the organization

• Increased trust and credibility in the market

Explain the Customer Due Diligence (CDD) requirements under anti money laundering regulations.

• Accepting large cash deposits without verification

• Verifying the identity of customers, assessing their risk, and monitoring their transactions.

• Ignoring customer transactions

• Asking customers for their favorite color

What are the reporting requirements for suspicious transactions under anti money laundering regulations?

• Informing the customer about the suspicious activity

• Reporting to the local police department

• Posting about the suspicious transaction on social media

• Filing a Suspicious Activity Report (SAR) with the Financial Crimes Enforcement Network (FinCEN)

Describe the role of the Financial Action Task Force (FATF) in setting international anti money laundering standards.

• The FATF oversees global environmental regulations

• The FATF regulates international trade policies

• The FATF monitors stock market trends

• The FATF sets international anti money laundering standards.

What are the record-keeping requirements for financial institutions under anti money laundering regulations?

• Keep records of customer transactions and identification information

• Keep records of employee work schedules

• Keep records of office supply inventory

• Keep records of customer preferences and feedback

Explain the concept of Know Your Customer (KYC) under anti money laundering regulations.

• KYC stands for Keep Your Currency and is a new digital payment system

• KYC is the process of keeping your cash safe in a bank

• KYC is a type of yoga practice for financial advisors

• KYC is the process used by financial institutions to verify the identity of their clients and assess their suitability, along with the potential risks of illegal intentions for the business relationship.

What are the key components of an effective anti money laundering compliance program?

• Customer satisfaction surveys

• Risk assessment, internal policies and procedures, customer due diligence, ongoing monitoring, and employee training

• External marketing strategies

• Frequent cash transactions

Describe the role of the USA PATRIOT Act in combating money laundering and terrorist financing.

• It had no impact on combating money laundering and terrorist financing

• It only focused on traditional forms of money laundering and ignored terrorist financing

• It expanded the scope of anti-money laundering laws to include terrorist financing and provided law enforcement with enhanced tools to combat money laundering and terrorist financing.

• It reduced the penalties for money laundering and terrorist financing