AML 1

Which red flag should a compliance officer prioritize first for investigation?

• A loan is paid off in full with cash after the sale of the vehicle that was used as collateral for the loan.

• Several cross-border transfers are received and immediately wired to another beneficiary.

• A customer has 20 monthly transactions that are repetitive but less than $500 USD per transaction.

• A convenience store cashes government checks for its customers in amounts less than $1,000 USD per day.

The main purpose of the US Treasury Department for OFAC's extraterritorial reach is to:

• accomplish the foreign policy and national security goals of the US.

• defend the US against questionable trade practices of its economic rivals.

• protect allied nations of the US from the economic threats of non-allied nations.

• align OFAC's and other countries' extraterritorial reach requirements.

A SAR/STR should be filed when the accountable institution identifies that:

• a customer makes a cash deposit in round dollars.

• cash transactions have values which avoid reporting thresholds.

• an alert is generated by a transaction monitoring system.

• an employee is not clearing alerts in a timely manner.

Which key factor would result in the decision for a financial institution (FI) to exit a client
relationship?

• After assessing all risk factors the level of residual client risk exceeds the FI's risk appetite.

• The client is a registered charity known to remit funds to high risk geographies where there is limited due diligence information available.

• Closing the client accounts will help reduce the number of transaction monitoring alerts.

• Client transactions generate ongoing transaction monitoring alerts that did not result in any SAR/STR filings.

Financial institutions (FIs) perform AML risk assessments to ensure:

• a record for regulators indicating an AML risk assessment was completed at least once.

• internal audit assurance that all AML-related policy and procedures are board approved.

• satisfaction of the board of directors' approved risk appetite.

• proper controls surrounding higher-risk products, services, customers, and geographic locations.

What national agency is responsible for analyzing and assessing the information it receives to
substantiate possible existence of money laundering or terrorist financing activities?

• The Financial Intelligence Unit (FIU)

• FATF

• The Basel Committee

• The Wolfsberg Group

Which private banking situation requires due diligence actions to be implemented according to the
AML principles of the Wolfsberg group?

• A local wealthy individual wants to become a customer of a local retail bank.

• A beneficial owner of an exchange house wants to open an account with the bank.

• A wealthy individual from a high-risk country wants to open an account with a private bank.

• A new customer asks to set up an exchange house using the bank as the correspondent.

According to the Basel Committee on Banking Supervision, banks should deal with high-risk
customers by:

• maintaining segregated records to enable easy inspection by law enforcement in case of a subpoena.

• assigning those customers to specified private bankers for better monitoring of their offshore transactions.

• performing enhanced due diligence including enhanced ongoing monitoring of the account activity.

• seeking approval from the board of directors before establishing the relationship.

Which transaction should result in a SAR/STR filing?

• A small business owner deposits checks totaling $9,950 USD on a daily basis without providing a legitimate purpose.

• A small business owner deposits $25,000 USD in cash proceeds with a business equipment bill of sale.

• A national food-chain restaurant with multiple cash transactions at various branch locations.

• A national food-chain restaurant makes multiple, anticipated cash transactions that are above the daily reporting threshold.

Which information should be gathered as part of enhanced due diligence (EDD) for a high-risk
customer?

• Explanations for changes in marital status

• Details on individuals with control over the account

• Plans for traveling in business trips

• Personal references