WorksheetsSession 6
Total questions: 23
Worksheet time: 12mins
A financial institution receives a regulatory finding that indicates gaps in its AML program. What should the institution do first?
Inform the media about the gaps
Escalate the findings to senior management and implement remedial measures
Ignore the findings unless a formal investigation is initiated
Temporarily shut down operations
A customer deposits $25,000 in cash over three days and sends $30,000 in wire transfers within a week. What should the institution investigate?
The source of cash deposits
The beneficiary of the wire transfers
Both A and B
Neither, as these are typical transactions
An employee reports suspicious activity involving potential fraud using the company hotline. What is the correct procedure?
File a Suspicious Transaction Report (STR) immediately
Retaliate against the employee for making the report
Investigate the report through compliance and legal departments
Ignore the report
A financial institution sees a negative news report about a customer linked to illicit activities. What should the compliance analyst do?
File an STR immediately
Research additional authoritative sources to validate the claim
Close the customer’s account without further investigation
Ignore the report unless contacted by law enforcement
What should a financial institution do upon receiving a government subpoena?
Notify the customer being investigated
Comply with the subpoena after review by senior management or counsel
Refuse to comply unless formally threatened with penalties
Publicly disclose the details of the subpoena
During a search warrant execution, what is the financial institution’s responsibility?
Prevent law enforcement from accessing records
Request a copy of the warrant and monitor the inventory of items seized
Provide law enforcement access to all records, including attorney-client documents
Allow agents unrestricted access without verifying the warrant
What factors should be considered when deciding to file an STR?
The regulatory timeline and aggravating factors of the case
The personal reputation of the customer
Only the internal policy requirements
The tax implications for the customer
What is the primary purpose of a Mutual Legal Assistance Treaty (MLAT)?
To freeze a customer’s assets internationally
To facilitate cross-border law enforcement cooperation in criminal cases
To protect banking secrecy
To create bilateral trade agreements
When deciding to close an account after an investigation, what should be considered?
The legal basis and seriousness of the underlying conduct
The profitability of the account
Whether the customer is politically exposed
The customer’s complaint about service quality
What triggers a law enforcement investigation into money laundering?
STRs, tips from sources, and evidence from other cases
Random audits by regulators
Anonymous complaints from competitors
Media reports without verification
A financial institution receives a court order to freeze a customer’s account. What should the institution do?
Freeze the account and notify the customer immediately
Request a copy of the affidavit supporting the freeze order and comply with the order
Refuse to freeze the account without reviewing the customer’s history
Transfer the funds to a separate account to avoid suspicion
A compliance team is reviewing STR filings for quality assurance. What is the primary purpose of this review?
Ensure STRs are consistent, accurate, and escalate high-priority matters
Reduce the number of STRs filed to avoid regulatory scrutiny
Determine whether the STR filing fees are justified
Identify customers for account closures
During an investigation, a financial institution reviews account statements, loan records, and login activity. What is the primary goal of this step?
Find evidence to file a civil lawsuit
Identify patterns or anomalies related to suspicious activity
Verify the customer’s compliance with tax regulations
Prove the innocence of the customer
A financial institution is asked to assist in a cross-border investigation into suspected money laundering. What is the most effective way to proceed?
Request the foreign agency to use Mutual Legal Assistance Treaties (MLATs)
Ignore the request unless accompanied by a court order
Share all customer data without considering legal constraints
Require the foreign agency to file a STR
According to FATF Recommendation 39, what must countries ensure about extradition?
Only nationals of other countries can be extradited
Extradition requests are executed promptly and efficiently
Extradition is delayed until evidence is reviewed by the requesting country
Only high-value crimes are subject to extradition
A negative media report links a customer to terrorist financing activities. What is the institution’s next step?
File an STR based solely on the media report
Conduct further investigation to verify the claims
Close the account without notifying the customer
Wait for a regulatory directive before acting
How do MOUs between FIUs facilitate investigations?
By formalizing agreements for rapid and informal exchange of information
By creating a legal obligation to file STRs jointly
By sharing evidence exclusively for domestic investigations
By restricting information sharing to protect banking secrecy
Why is it important for a financial institution to request a copy of the affidavit supporting a search warrant?
To determine the scope and purpose of the investigation
To avoid compliance with the warrant
To publicly disclose the customer’s activities
To protect the institution from legal liability
Which factor would a prosecutor consider before charging a financial institution with AML-related violations?
The institution’s efforts to cooperate and remediate issues
The institution’s customer satisfaction scores
The financial losses incurred by customers
The size of the institution
What should a financial institution prioritize when filing STRs?
Filing within the regulatory timelines
Obtaining customer consent before filing
Minimizing the number of STRs filed
Disclosing the STR filing to customers
A bank employee observes a customer frequently making deposits just below the reporting threshold. What should the employee do?
Complete an internal referral form for further investigation
File an STR directly
Inform the customer of their suspicions
Ignore the activity unless flagged by monitoring software
A financial institution failed to identify serious AML gaps, leading to regulatory action. What should be the immediate step?
Escalate the findings to senior management and conduct remedial actions
Ignore the gaps unless customers complain
File an STR without further investigation
Terminate the employees responsible
What is an important consideration when communicating with law enforcement about an STR?
Never share the customer’s identity
Provide requested information promptly and maintain a record of disclosures
Delay responses until the investigation is complete
Refuse cooperation without a subpoena
