Advanced CAMS Audit Exam Free Dumps

1. A bank account is established for a new business customer. The business was established five years ago with an address in another state. The business website contains few details other than stating it is a real estate business.

One principal has an international telephone number and appears to be living in another country.

The other principal works out of a recreational vehicle.

What warrants enhanced due diligence in this scenario?

2. A branch manager for a small community bank has a new customer who deposits for EUR 50,000 checks into one account. Shortly thereafter, the customer goes to another branch and asks to transfer all but EUR 1,500 to three accounts in different foreign jurisdictions.

Which suspicious activity should be the focus of the suspicious transaction report?

3. A government has instituted a new anti-money laundering laws which require all financial institutions to obtain certain information from its customers.

Which step should an institution located in this jurisdiction take to ensure compliance?

4. An anti-money laundering audit identifies a significant weakness in how transaction monitoring alerts are cleared. Audit sampling identified potentially suspicious activity that was cleared as not suspicious.

Management accepts the audit finding and develops a remediation plan.

What is the role of the auditor during the correction phase?

5. Which method to launder money through deposit-taking institutions is closely associated with International trade?

6. A customer opens a corporate account with a broker-dealer on behalf of several beneficial owners, with a stated long-term investment goal. The customer deposits $25.5 million into the account and three days later transfers $5 million to an overseas bank. Shortly thereafter, the customer begins making numerous purchases of pesos. The compliance officer receives a query regarding the movement of funds. Within a month of account opening, the customer depletes the account.

Which two red flags should prompt the firm’s compliance officer to take action? (Choose two.)

7. What should countries do to help prevent non-profit organizations from being abused for the financing of terrorism according to the Financial Action Task Force 40 Recommendations?

8. An employee hears a colleague on the telephone with a customer giving advice on how to ensure that a suspicious transaction report will not be filed as a result of a future transaction.

What action should the employee take?

9. The USA PATRIOT Act requires United States (U.S.) financial institutions to collect certain information from non-U.S. banks that hold a correspondent account.

Which two pieces of information must a non-U.S. bank provide to its U.S. correspondent to enable them to comply with this requirement? (Choose two.)

10. What are two legal risks of having inadequate privacy policies and procedures? (Choose two.)

11. The vice president of the foreign correspondent banking department at a large United States bank has been notified that a foreign bank with an offshore license wants to open a correspondent account.

Which two things must the vice president acquire under the USA PATRIOT Act? (Choose two.)

12. What is an example of the integration stage of money laundering involving a bank or another deposit-taking institution?

13. Which aspect of the USA PATRIOT Act impacts foreign financial institutions?

14. The compliance officer at a crowd funding website is in charge of monitoring new crowd funding projects.

Recently, the number of crowd funding projects has significantly increased.

Which red flag indicates the highest anti-money laundering risk?

15. Which two statements in the Wolfsberg Group’s “Suppression of the Financing of Terrorism” define the role financial institutions should play in the fight against terrorism? (Choose two.)

16. What is the appropriate compliance control for identifying politically exposed persons (PEPs) according to the Basel Committee’s paper on Customer Due Diligence for Banks?

17. What are two sources for maintaining up-to-date sanctions information? (Choose two.)

18. A bank has maintained an account for a European charity for several years. The charity provides clothing to persons in need in various countries with active terrorists’ cells.

Which action by the charity indicates possible terrorist financing?

19. A politically exposed person (PEP) maintains an account at a bank. Last month a money laundering

analyst filed a suspicious transaction report about unusual wire deposits originated by unknown individuals in the home country of the official.

To whom should this situation be escalated?

20. Which two individuals are ordinarily beneficial owners of a private banking account according to the Wolfsberg Anti-Money Laundering Principles for Private Banking? (Choose two.)

21. What are two requirements for monitoring and reporting suspicious activity for correspondent banking according to the Wolfsberg Principles? (Choose two.)

22. When should the anti-money laundering risk assessment be updated?

23. A customer brings $15,000 worth of chips into a casino and plays various games. The customer redeems all the remaining chips and requests a wire transfer of the proceeds to an unrelated third party.

What are two red flags that indicate money laundering? (Choose two.)

24. A United States (U.S.) bank was recently alerted by law enforcement of an increase in sale of large denomination U.S. bank notes to casas de cambio. They suspect that a Mexican syndicate is operating a money laundering scheme in the bank’s jurisdiction.

Which two steps should be taken to trace funds through the bank to assist law enforcement in their investigation? (Choose two.)

25. Which two factors assist a money laundering investigation that involves multiple countries? (Choose two.)

26. A popular restaurant in town has begun depositing less cash than it has in prior years. In a review of the customer’s accounts, you notice that credit card receipts have increased with no.

The account officer discovers that the restaurant has installed a privately-owned automated teller machine (ATM) onsite and has begun construction on a patio dining area.

Which red flag should trigger additional investigation?

27. An organization’s automated surveillance system identifies large fluctuations in customer activity. As a result of an audit, the compliance officer is informed that the system is not generating alerts when activity is consistently abnormal over a long period of time. Currently the organization is evaluating new alert scenarios in an attempt to address this problem.

Which type of scenario is helpful in mitigating this weakness?

28. Upon a routine account review a money laundering investigator identified a number of large round dollar wire transfer deposits into a business account owned by a local auto repair shop. The wire transfers all originated from a country that is a known financial secrecy haven with poor anti-money laundering controls. The investigator concludes there appears to be no legitimate business purpose for the wire transfers and files a suspicious transaction report. The owner of the auto repair shop is popular in the community and is a wellknown philanthropist.

To whom should the investigator escalate these concerns?

29. A compliance officer learns from an Information Technology (IT) source of a potential new financial service being discussed by the new product approval committee.

What is the correct next course of action?

30. What is the goal of the Egmont Group in providing a forum for Financial Intelligence Units (FIUs) around the world?

31. A compliance officer at an insurance company has been reviewing the transaction activity of several clients.

Which transaction is considered a red flag for potential money laundering?

32. The branch manager notices that a number of customers come in weekly and always use the same teller to process their deposits. The manager notices that the customers and the teller, who are from the same ethnic

group, are speaking in a foreign language and every once in a while the customers from local ethnic restaurants will bring the teller lunch. The commercial customers that visit the teller generally deposit the same amount of cash each time they come in.

How should the branch manager respond to this activity?

33. A law enforcement official calls a bank inquiring about a customer who is currently under investigation. The law enforcement official requests information about the customer.

How should the bank respond?

34. A bank compliance officer has implemented enhanced monitoring rules that have identified some unusual activity that may be indicative of human trafficking.

Which red flag should prompt additional transactional review?

35. The compliance officer for a private bank has been tasked with writing a policy on how the bank will deal with intermediaries.

Which two aspects should be included in the policy in respect of intermediaries to align it with the Wolfsberg Anti-Money Laundering Principles for Private Banking? (Choose two.)

36. A non-U.S. bank wants to open an account at Bank A, which is a U.S.-based bank.

Which information must Bank A obtain under the USA PATRIOT Act?

37. Which insurance product is particularly vulnerable to money laundering?

38. What is an essential element of Know Your Customer (KYC) standards according to the Basel Committee’s Customer Due Diligence for Banks paper?

39. A foreign bank operating under an offshore license wants to open a correspondent account with a United States (U.S.) bank. The foreign bank plans to provide payable through account services to some of its customers.

What must the foreign bank provide to the U.S. bank under the USA PATRIOT Act?

40. An institution has made the decision to exit a client relationship due to anti-money laundering concerns. Prior to starting the close out process, the institution receives a written request from a law enforcement agency to keep the account open. The client is the subject of an ongoing investigation and law enforcement wants the institution to continue to monitor the account and report any suspicious activity.

What is primary consideration the institution should keep in mind when deciding whether to agree to this request?

41. An immigrant residing in the United States opens a bank account that includes a debit card. Several months later, the transactional monitoring system identifies small deposits into the account followed by corresponding ATM withdrawals from a country bordering a conflict zone.

How should the bank respond?

42. A customer living in a high-risk jurisdiction makes frequent, large cash deposits at a bank. The same customer sends small wire transfers to unrelated parties in other high-risk jurisdictions.

What are two red flags that may indicate money laundering? (Choose two.)

43. A retail bank has just acquired a credit card business. The bank’s anti-money laundering policy requires that new employees are trained within 30 days of their hire date and refresher training is delivered to all employees on an annual basis.

Is the bank’s existing anti-money laundering training adequate to be delivered to employee of the newly acquired credit card business?

44. Which method do terrorist financiers use to move funds without leaving an audit trail?

45. Why do governments and multi-national bodies impose economic sanctions?

46. In reviewing recent activity, a compliance officer for a money transmitter that several customers are each remitting the same amount of money but much more frequently.

How should the institution respond?

47. In the summer, an institution identifies anti-money laundering concerns regarding a customer’s account activity. The customer, an ice cream, has deposited a lot of checks drawn on banks in foreign countries, sent large number of high dollar international wires to different countries, made cash deposits of a few hundred dollars every few days and written multiple checks for a few hundred dollars to the same dozen payees every two weeks.

Which two transaction types warrant investigation? (Choose two.)

48. Which three methods are commonly used by an accountant to launder money? (Choose three.)

49. A bank located in Arizona is considering a loan application for a new client. The collateral for the loan is a property in Florida.

The loan will be in the name of a limited company (LLC) whose ownership is not disclosed to the bank. The LLC was established by a New York-based attorney.

The loan will be repaid by the LLC in monthly wire transfers of $9,000 which is more than the required monthly payment.

Which aspect indicates potential for money laundering?

50. What is a key risk associated with Correspondent Accounts according to the Basel Customer Due Diligence paper?

51. A law enforcement agency is reviewing a suspicious transaction report (STR) filed by a financial institution for suspicious activity on a client’s account. Subsequently, the agency requests further information.

Which supporting documentation might the law enforcement agency request from the institution to facilitate its investigation?

52. A new compliance officer is reviewing the bank’s anti-money laundering program and notices that the risk assessment was completed six months ago. Since that time, the bank acquired another financial institution, renamed the internal records group, and streamlined cash handling procedures.

Which factor causes the compliance officer to update the bank’s risk assessment?

53. The Wolfsberg Anti-Money Laundering Principles for Private Banking require new clients to be approved by whom?

54. Which two factors should increase the risk of a correspondent bank customer and require additional due diligence according to the Wolfsberg Anti-Money Laundering Principles for Correspondent Banking? (Choose two.)

55. In which two ways does a government Financial Intelligence Unit interact with public and private sectors? (Choose two.)

56. What do Financial Action Task Force (FATF)-style regional bodies do for their members to help combat money laundering and terrorist financing?

57. What are the regulatory risks to a bank employee who willfully violates anti-money laundering laws?

58. What are two requirements with respect to supporting documentation that is used to identify potentially suspicious activity, according to Financial Action Task Force? (Choose two.)

59. What are two reasons physical certificates present a money laundering risk to broker-dealers? (Choose two.)

60. An automotive parts company in South America sends multiple $500,000 wire transfers per week to ABC Holdings Ltd. in Asia referencing payment for silk flower shipments. Research reveals Sunrise Holdings, Ltd is registered in the British Virgin Islands with no available ownership information.

What are two red flags that indicate how trade-based money laundering could be occurring in this instance? (Choose two.)

61. To ensure the independence of an audit for an AML program those involved in the audit would best be described as being:

62. The branch manager calls the compliance officer and informs her that a law enforcement officer has just left the branch and was asking a lot of and left a business card.

What should the compliance officer do?

63. What is a major economic consequence of money laundering through the use of front companies?

64. An institution is about to release a new peer to peer (P2P) funds transfer product to provide much needed remittance services to an under-banked population segment in the country.

The service allows customers to transfer funds through a mobile banking application to individuals worldwide entering only a name and mobile number. The new service charges less than comparable market solutions and offers real time transfer of funds. The customer onboarding process is conducted at branch locations with identity verification.

Which three present the highest anti-money laundering or sanctions risk and will require controls prior to launch? (Choose three.)

65. What is true regarding disclosure to a law enforcement agency by a financial institution of the supporting documentation for a suspicious transaction report?

66. As a result of an audit, a policy exception was identified that had been approved by the compliance officer.

The auditor determined that the policy exception is a violation of a regulatory requirement.

What should the auditor do?

67. A foreign politically exposed person (PEP) requests to add a beneficiary to a file insurance policy.

How should the request be processed to mitigate risk?

68. Which requirement is included in the Fourth European Union Directive on money laundering?

69. A bank maintains a relationship with a customer who owns a small bakery business.

Which customer action indicates potential money laundering?

70. A U.K. real estate agent has three foreign clients interested in purchasing an apartment building, valued at £30 million, in the outskirts of London as an investment property. The clients are not willing to have their names provided to the bank. The clients want to purchase to be made in the names of three private companies for privacy reasons. The plan is to wire the funds into an account held in the name of another private company at a bank in London.

Which red flag should stop the agent from discussing this potential purchase further?

71. What is a key objective of the Egmont Group?

72. The compliance officer for a bank is reviewing on-boarding documents for a new business account for a domestic corporation. The officer is unable to verify the identity of the beneficial owners of the company. Only information on the nominee owners was provided, and none of the listed addresses are local. The purpose of the business and future expected activity were disclosed to include cash letters, money orders and international remittance transfers.

Which red flag identifies a heightened money laundering risk?

73. Law enforcement submitted a request to a bank for information regarding one of its customers.

How should the bank respond according to Financial Action Task Force Guidance?

74. How should a financial institution respond to a verbal request from a law enforcement agency to keep an account open to assist in an investigation?

75. A bank operates in multiple countries and offers a variety of products and services. The compliance officer recently joined the bank and wants to better understand the inherent level of anti-money laundering risk across the entire organization.

Which two factors should be considered? (Choose two.)

76. A bank is preparing for its anti-money laundering independent review, which is performed every two years under the direction of the compliance officer. The bank’s corporate audit department will conduct the review.

The compliance officer will review the final report before it is released to the Board of Directors.

What is the issue with this situation?

77. Which method is used to launder money in casinos?

78. Financial Action Task Force (FATF)-style regional bodies are created and obliged to understand the inherent money laundering and terrorist financing risks in the region of the world they serve.

What is one of the methods they use to understand these risks?

79. A bank’s anti-money laundering section receives an anonymous tip that a customer might be engaging in possible money laundering.

Which two facts should be considered during the course of an investigation into this matter? (Choose two.)

80. A bank employee reviews wire transactions looking for indications of wire stripping.

Which two actions should the employee take to complete appropriate bank procedures? (Choose two.)

81. Who has the ultimate responsibility within a bank for ensuring that the bank has a comprehensive and effective Bank Secrecy Act / anti-money laundering (BSA/AML) program and oversight framework that is reasonably designed to ensure compliance with applicable regulations?

82. A compliance officer provides an overview of the bank’s anti-money laundering program to a group of new tellers during employee orientation.

Which training element should be delivered to this audience?

83. Which red flag indicates high potential for money laundering in a real estate purchase?

84. A compliance officer at a small community bank has been asked to review existing customer onboarding policies and procedures to ensure they adequately address anti-money laundering risks.

How should customer due diligence be implemented?

85. A bank compliance officer discovers cash deposit activity inconsistent with the expected and historical cash activity within the personal accounts of the chairman of the board. The cash activity appears structured to avoid the local legal filing requirements for large cash transactions, and a suspicious transaction report (STR) was filed.

How should the compliance officer report the filing of the STR to the board of directors without revealing the existence of the filing to the subject?

86. Under which two circumstances may law enforcement be given access to a financial institution customer’s financial records? (Choose two.)

87. What must be materially true regarding transactions for United States (U.S.) sanctions laws to have jurisdiction?

88. How does the Financial Acton Task Force (FATF) communicate its findings regarding jurisdictions with strategic anti-money laundering / Counter Financing of Terrorism deficiencies?

89. A recent anti-money laundering audit revealed several regulatory reporting violations and lapses with the organization’s anti-money laundering policy. As a result, the compliance officer has created a follow-up matrix to document progress in correcting the identified deficiencies.

To whom should the compliance officer provide regular updates of corrective action to help ensure the appropriate oversight?

90. A corporate services provider in a European Union (EU) country has a prospect from an African country who deals in oil and gas. The prospect intends to develop an oil terminal in his home country with a $75 million dollar loan secured by a third party, which is a trust formed in a Caribbean island with a holding company based in a European secrecy haven. A young lady is presented as an ultimate beneficial owner who has gained her wealth through a fitness studio in her home country.

What are two red flags that could indicate money laundering or financing terrorism? (Choose two.)

91. The anti-money laundering compliance officer for a small money transmitter has several agent locations in the same geographic area in the United States. The customers are immigrants from Country A and the majority of the funds are remitted to Country A.

In a meeting with one of the agents, it is recently discovered that two new customers have been coming in three times a week and sending funds to the same recipient in Country B. Each cash transaction always totals exactly $8,000.

What should alert the agent to possible money laundering activity by the two customers?

92. A bank receives an anonymous tip from an employee about another employee through its confidential hotline.

Which activity warrants further review?

93. A bank located in New York has identified suspicious transactions at a correspondent bank in ChinA. For one of the international customers, the correspondent bank is not following agreed upon protocols.

Which factor indicates that the bank should terminate the relationship?

94. Which two channels can be utilized during a cross-border money laundering investigation to assist in gathering information according to Financial Action Task Force? (Choose two.)

95. During a law enforcement investigative interview regarding potential money laundering, the suspect starts making assertions and statements that the investigator believes are false.

How should the investigator respond?

A. Inform the suspect that deception is obvious and continue the interview

B. Advise the suspect that the interview will be terminated if there is suspicion of deception

C. Direct the interview in another direction until there is better rapport before returning back to the troubling question

D. Ask question of a material nature about the suspected false statements without revealing the suspected deception

96. A customer has held an account at a bank and has lived locally for over 25 years. Historically he has come into the bank monthly to deposit a $1,500 retirement check from the company where he worked. He is well known at the bank and often brings the staff cookies. Over the past four months, he has come into the bank every Monday, Wednesday, and Thursday to make $3,000 cash deposits into his account. A review of his account shows that an $8,500 check made out to cash clears his account each week. The bank has decided to file a suspicious transaction report (STR).

What is the important fact to include in the STR?

97. A financial institution receives a regulatory enforcement action because of deficiencies in its anti-money laundering program.

Which action should the board of directors take?

98. A banker in the credit department wants to assess the risk of all customers, and contacts the compliance officer to request a list of customers with suspicious transaction report filings.

What should be done to protect suspicious transaction report information?

99. Which two aspects of precious metals pose the highest risk of money laundering? (Choose two.)

100. Which two methods have terrorist groups used to diversify their revenue stream and to fund their operations? (Choose two.)

101. Which two statements are true regarding the European Union Money Laundering Directives? (Choose two.)

102. A compliance officer was recently reviewing transactional data for an international charity and found transactions that present a higher risk.

Which reason is cause for terminating the banking relationship?

103. Which action does the Financial Action Task Force (FATF) recommend be taken against jurisdictions that have strategic deficiencies?

104. A client opens a bank account for a multi-level marketing company. The debits and credits of the account are numerous and very involved. Further, there are a lot of international transactions. Also, funds are being tunneled from the company to the client’s personal account in another jurisdiction.

Which two steps should law enforcement take in investigating this matter? (Choose two.)

105. Which method is used to launder money via wire remittances sent through a bureau de change or money services business?

106. Historically, a tour guide has made monthly cash deposits averaging $10,000. Over the past three months, the monthly deposits have averaged $100,000. When the financial institution the increased deposits, the tour guide explains that there have been numerous conventions in town so business has increased substantially.

Which further action(s) should the financial institution take?

107. A bank employee recently opened an account for a new restaurant. Daily cash deposits over a three-month period are close to $9,500.

What are two red flags that indicate possible money laundering or terrorist financing? (Choose two.)

108. One key aspect of the Office of Foreign Assets Control’s extraterritorial reach includes the blocking of certain non-United States initiated transactions for or through the United States (U.S.) for benefit of a restricted person or entity.

Under which three circumstances are U.S. banks required to block transactions? (Choose three.)

109. To ensure compliance with economic sanctions established by governmental authorities in the jurisdictions where it operates, a financial institution requires that all new and existing customers be screened at onboarding and quarterly thereafter.

Is this step sufficient to ensure compliance?

110. What is the currency threshold under the European Union Fourth Anti-Money Laundering Directive?

111. What are two requirements of United States financial institutions when conducting business with an international institution as a result of the USA PATRIOT Act? (Choose two.)

112. What are two risks to institutions for violating anti-money laundering laws as demonstrated by the 2012 HSBC settlement with United States authorities? (Choose two.)

113. When must a United States (U.S.) bank block or reject an international funds transfer when there is an Office of Foreign Assets Control designated party to the transaction?

114. A law enforcement agent calls a bank anti-money laundering investigator for supporting information about a suspicious transaction report that was filed the previous month.

How should the investigator respond?

115. Which action should countries take related to the financing of terrorist acts in accordance with the Financial Action Task Force 40 Recommendations?

116. A client is a wholesale auto business that operates as a used car lot. The client regularly ships vehicles internationally. In a four-month period, the client received wires totaling $ 1,250,000 from a dealer in Benin in West AfricA. All wires originated from Benin and were in increments of $50,000.

Account debits made to the account were payable to various transport companies. All incoming checks reference various vehicles purchased. Dock shipping receipts produced by the client to support account activity identify the vehicles but cannot easily be tied to the wires receives.

What is the suspicious behavior?

117. A high-volume dealer of precious metals and stones in a high-risk jurisdiction is approached by a new customer interested in selling gold worth $200,000. The customer was referred by a longtime family friend of the dealer and provides no indication of background or business purpose for the sale. The dealer agrees to make the purchase based solely on the reference.

What is the money laundering red flag?

118. What does the Financial Action Task Force 40 Recommendations address on transparency of beneficial ownership?

119. A compliance officer identifies a potentially significant risk in a popular financial product. Further investigation reveals there is no mitigating control.

Which course of action should the compliance officer take?

120. Which factor should a bank consider before sharing information about a customer with its broker-dealer affiliate in the case of an investigation?

121. In which situation can money laundering adversely affect a country’s currencies and interest rates due to launderers investing dirty funds?

122. What types of things should an institution incorporate in it AML policies and procedures? Choose 3 answers

123. What three attributes do havens for money laundering and terrorist financing typically have? Choose 3 answers

124. In establishing procedures for the review of suspicious transactions and filling of STRs, what thing should an institution focus on?

125. Which function provided by lawyers can be useful to a potential money launderer as documented by FATF in its typology report 2000-2001? Choose 3 answers

126. When an institution receives a document request from law enforcement with regard to an STR that the institution has filed, what should institution do?

127. Which method is indicative of potential money laundering and terrorist financing activity?

128. Historically, which vehicle is most often used to hide beneficial ownership?

129. Which three statements are true about on-line banking offering a significant money laundering risk to a financial institution?

130. To what extent should senior management and the Board of Directors be involved in the filing of any STR?

131. What is the most effective criterion for determining the beneficial ownership of funds?

132. What indicates potential money laundering activity by a lawyer?

133. When a bank performs a risk assessment, what areas should an institution focus on?

134. What is the intentional evasion of a reporting or recordkeeping requirement?

135. Which three actions should employees be instructed to do during an internal investigation?

136. Why are Money Services Business (MSBs) frequently accused of being high risk for money laundering?

137. Which three stages of money laundering are on-line banking vulnerable to?

138. A national Financial Intelligence Unit, which is responsible for receiving, analyzing and disseminating disclosure of financial information, should consider becoming a member of what organization?

139. Which practices are dealers in antiques, precious metals, precious stones, jewelry, and art advised to follow to reduce the element of money laundering risk? Choose 3 answers

140. Which three conduits for moving terrorist-related funds do terrorist financing generally favor? Choose 3 answers

141. Which action indicates possible Penza scheme activity?

142. Which event occurs most frequently in money laundering in the insurance industry?

143. Which scenario is closest to the definition of money laundering the United Nations Convention against Transnational Organized Crime and Other Protocols provided?

144. A suspicious transaction report has been filed on an account owned by the wife of the bank's Chief Executive Officer.

Which of the following is the most important consideration when deciding whether to recommend closing the account?

145. A suspicious transaction report has been filed on an account owned by the wife of the bank’s ChiefExecutive Officer.

Which of the following is the most important consideration when deciding whether to recommend closing the account?

146. An internal investigation log is primarily intended to:

147. Bank A is located in Country A. A wire transfer from Bank B located in Country B is processes by Bank A, where the funds are being moved to a customer at Bank C located in Country C. The wire transfer is deemed suspicious by Bank A.

148. With which of the following should an anti-money laundering officer coordinate when implementing anew hire screening program?

149. Trusts established in certain offshore jurisdictions make good vehicles to lay under money for which of the following reasons?

150. A customer has held an account at a local credit institution for 10 years. The account has received deposits twice weekly for the same amount and has never shown signs of suspect behavior. Monitoring software indicated that in the past few months the account has received several large deposits that were not in line with the account history.

When asked, the customer states she recently sold a piece of property, which is supported with a proof of sale.

Which of the following should the compliance officer do next?

151. An independent audit function to test the program.

152. Frequent wire transfers into an account immediately followed by checks (cheques) or other payment instruments drawn on the account.

153. A businessman requests a European private bank to open a numbered or alternate name account.

According to the Basel Committee on Banking Supervision principles, which of the following is the most important question the banker should ask?

154. Which of the following competent authorities should directly receive suspicious or unusual transaction reports?

155. An offshore company is owned by four equal partners that reside in separate jurisdictions. One partner presents an authenticated power of attorney apparently executed by the remaining three partners in his favor and requests that a bank account be opened on behalf of all partners. He needs this done quickly because there is a large deposit pending. The account-opening officer contacts the bank's anti-money laundering officer for advice.

Which of the following should the anti-money laundering officer advise as an initial step?

156. All security trading activities for that individual since 2004.

157. A European Union (EU) bank has a correspondent banking relationship with a U.S. bank. Under USA PATRIOT Act Section 311, the U.S. government has enacted special measures against a designated entity that has a payable-through account with the EU bank.

Which of the following actions might the U.S. bank be required to take regarding the EU bank's services for the designated entity?

158. Which of the following is the best action to take regarding a particular account once suspicious

activity is reported by the institution?

159. does not have to comply with transaction reporting.

160. A suspicious transaction report filed on a car dealer structuring deposits initiates a criminal investigation. The dealer changes branches and begins placing transactions with a frontline employee to whom the dealer has given numerous gifts.

This employee handles all of the dealer's structured deposits and does not report the suspicious activity internally.

The competent authority has advised the anti-money laundering specialist to avoid tipping off the employee until the investigation is finalized.

What action should the specialist take next?

161. A division anti-money laundering officer for a financial institution has been conducting a monthly self-assessment.

The officer reviews the accounts opened for compliance with a long standing Know Your Customer policy.

The self-assessment for the latest month shows a significant increase in compliance deficiencies for the first time in more than a year.

Which of the following is the next course of action for the anti-money laundering officer to take?

162. A close relative of a privately-owned bank's senior manager requests to open an account. Because of this relationship, the staff expedites the opening of the account without following established account-opening procedures.

Applying the Basel Committee on Banking Supervision principles, which of the following poses the highest operational risk?

163. According to the Financial Action Task Force 40 Recommendations, Designated Non-Financial Businesses and Professions include

164. An anti-money laundering expert is hired by a new Internet bank to assess the money laundering threat to the bank. Because it is an o line bank the most important recommendation for the expert to make is that the bank

165. During an ongoing investigation into a client's activities by a competent authority, a compliance officer should

166. Which of the following represents the first Financial Action Task Force initiative?

167. Transfers of money over the last 6 months to a corporation in a jurisdiction with strict secrecy laws triggered an alert.

Which of the following should cause the most suspicion of money laundering?

168. The anti-money laundering specialist of a small bank has identified suspicious activity at a branch located in an area of town where drug dealers are known to operate. An investigation of this activity discloses that the suspicious transactions occurred within the last 3 months and were processed by the same teller (cashier). The teller (cashier) did not file an internal report of unusual activity on these transactions. When checking personnel files, the specialist finds that the teller (cashier) has been a trusted employee for over 15 years, has an impeccable work record, and has participated in several anti-money laundering training sessions. The specialist recently became aware that the employee's daughter has contracted a rare disease and is undergoing a very expensive treatment program. Regarding the teller's (cashier's) failure to report the unusual activity to the institution, the specialist should recommend

169. An anti-money laundering specialist is concerned that several suspicious transaction reports will discuss potential illegal activity of bank employees.

In this situation, which of the following is the immediate concern for the institution?

170. A charity has unaudited accounts.

Which of the following represents the highest risk factor for terrorist financing?

171. Respondent's location, in particular the existence of a real physical presence.

172. An anti-money laundering specialist has been hired by an independently-owned community bank to implement an anti-money laundering compliance program. This bank has recently seen a dramatic increase in the number of international electronic fund transfers from its commercial clients. The first thing the anti-money laundering specialist should do is

173. An anti-money laundering specialist notes a significant reduction in suspicious transaction report filings at a particular branch.

Which of the following actions is most appropriate?

174. Send the deposit documents referenced in the suspicious transaction report.

175. An audit completed the previous week revealed that a private banking customer submitted incomplete documents when establishing an account earlier in the year. The customer received weekly electronic fund transfers from a narcotic-producing jurisdiction.

While the Relationship Manager who opened the account is on leave for 5 weeks, the customer requests that the institution remit a substantial sum to a country that represents a high risk of money laundering.

The Relationship Manager is a friend of the anti-money laundering specialist.

Which of the following should the anti-money laundering officer do first?

176. Which of the following customer transactions with a securities dealer would indicate the highest suspicion of money laundering?

177. The Board of Directors for a small private bank has asked the management to no longer apply the identity requirements for high net worth individuals to protect their privacy.

Which of the following Financial Action Task =once 40 Recommendations should cause an anti-money laundering specialist the most concern?

178. Which of the following is the financial stage of money laundering?

179. Which of the following customers require the most enhanced due diligence?

180. The Wolfsberg Principles

181. Outgoing foreign transactions of similar amounts trigger a monitoring alert for a customer's

accounts. During the evaluation of the accounts, the bank discovers the wire transfers were very small amounts and occurred within the last 3 months following a long period of inactivity. The wire transfers appear to originate from legal sources. To assess the potential of terrorist financing, the institution must ensure the

182. Under requirements for correspondent accounts in the USA PATRIOT Act, the word "certification" refers to a written representation by a

183. According to Basel Committee on Banking Supervision's Customer Due Diligence for Banks, which of the following should provide an evaluation of a bank's policies and procedures independent from its management?

184. Similar techniques are used to move funds.

185. According to the European Union Money Laundering Directives, "knowledge, intent or purpose"' required as an element for money laundering may be inferred from

186. A bank customer operates a fuel station as a sole proprietorship. The customer places deposits and other credits in a business account. The customer routinely transfers money from the business account to a brokerage account where he invests in money market securities. The customer also routinely makes monthly transfers to a credit card and line of credit to pay off balances. The volume of activity flowing through the business account has doubled in the past 3 months. An internal investigator reviews business account statements and credit card activity for the past 3 months, scans media articles about the customer, and interviews the account officer about the customer and account activity. This internal investigation did not provide an explanation for the increased activity1.

Which of the following should the anti-money laundering specialist recommend to the internal investigator?

187. precious metal dealers.

188. The Basel Committee on Banking Supervision issued a paper in October 2001 in which it presented a Know Your Customer framework and recommended standards applicable to

189. Upon filing a suspicious transaction report, which of the following elements should be the highest anti-money laundering priority in making the decision to keep the account open?

190. Trusts where the settlor, trustee and beneficiaries are identified and the shares are in bearer form.

191. What describes the Black Market Peso Exchange money laundering method?

192. Which three circumstances are indicators for defining a customer as required additional diligence according to the Wolfsberg Principles on Private Banking? Choose 3 answers

193. What was cited by the Wolfsberg Group in its Statement on the Suppression of the Financing of Terrorism as being vulnerable to terrorist financing?

194. In many jurisdictions, financial institutions are prohibited from hiring a person who has been convicted of what type of offense?

195. In general, what is an element that a financial institution or business does not have to specifically address in an anti-money laundering program?

196. Which three procedures should a compliance officer looking to revise an institution’s CTF efforts include in accordance with the Wolfsberg Group’s Statement on the Suppression of the Financing of Terrorism?

197. An AML compliance officer receives notice of government update including the names of the latest terrorists sanctioned by the United Nations Security Council.

Which would be the most appropriate step to take?

198. An account officer who maintains an excellent relationship with the finance manager for a correspondent bank customer learns that many records for the correspondent bank have been requested by law enforcement. In the interest of maintaining a good relationship with the customer, the account officer sets up a meeting to discuss the legal request with the customer. The account officer intends to discuss points related to the investigation during the meeting.

What should an anti-money laundering specialist recommend?

199. A customer comes into a financial institution and deposits a large amount of cash. He has never done that before. When asked about the deposit, he indicates he recently sold a used car and received cash.

He does not trust forms of payment and is wary of counterfeit money orders.

What should the bank do?

200. How can a financial institution verify the nature and purpose of a business and its legitimacy?

201. Which three criteria does a shell bank meet according to the Wolfsberg Principles on Correspondent Banking? Choose 3 answers.

202. A junior account manager within an international private bank in Country A was asked by one of his valued customers, who has held an account for several years in the institution, about depositing a large sum of cash into her account. The junior account manager informed his customer that his bank does not accept cash. The junior account manager later reviewed a customer activity report and noticed a number of smaller dollar wires from banks in neighboring Country B, which has lax currency controls, that totaled about as much as the customer intended to deposit.

What should the junior account manager do?

203. What does designing a country as being of “prime money laundering concern” allow the U.S. government to do?

204. What are three elements of a sound Customer Due Diligence Program?

205. On who does the ultimate responsibility for an institution’s anti-money laundering program rest?

206. Which statement about U.S. Specified Unlawful Activities (SUA) is true?

207. An anti-money laundering specialist has been asked to create internal anti-money laundering policies, procedures and controls for a recently chartered offshore financial institution.

Which three should be included? Choose 3 answers

208. A customer comes into the bank and appears to be ill-at-ease waiting in the teller line. When the customer gets to the teller, he become exceedingly nervous and asks for a large cashier’s check to be cashed and disbursed to him in $100 bills.

What should the teller do after completing the transaction?

209. Which three elements should be considered in an institution’s enhanced due diligence process to assure itself that it has secured sufficient understanding of its higher risk respondent bank customers according to the Wolfsberg Principles on Correspondent Banking?

210. Which three should real estate agents include in the criteria to assess their company’s potential money laundering and terrorist financing risks when implementing a reasonable risk-based approach?

211. According to the Financial Action Task Force 40 Recommendations, Designated Non-Financial Businesses and Professionals include which entities?

212. Bank A is located in Country A. A wire transfer from Bank B located in Country B is processes by Bank A, where the funds are being moved to a customer at Bank C located in Country C. The wire transfer is deemed suspicious by Bank A.

Who should Bank A file a suspicious transaction report on?

213. With which person(s) should an anti-money laundering officer coordinate when implementing a new hire screening program?

214. A compliance officer is conducting a review of the automated transaction monitoring system.

What would be most likely to result in a change in the monitoring system parameters?

215. Which three are the most commonly used risk criteria?

216. Which three do the Office of Foreign Asset Control regulations cover? Choose 3 answers

217. Which statement is true about when an institute becomes aware that a particular employee is under investigation by law enforcement as a result of a subpoena or warrant?

218. In relationship to life insurance business, the third European Directive states that Member States may allow the identity verification of the beneficiary under the policy after the business relationship has been established, but before which events?

219. What was the topic the Wolfsberg Group’s first guidance addressed?