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NEW QUESTION # 103
Which statement is true about banking regulatory agencies having the authority to obtain information from regulated institutions?
- A. If a regulatory agency intends to prosecute a regulated institution, a warrant or subpoena mustfirst be granted before the information can be obtained
- B. A search warrant may be substituted by a court subpoena compelling the institution to producethe information to the regulatory agency
- C. The regulatory agencies may only obtain information from the regulated institution's books andrecords by virtue of a search warrant
- D. The agencies authority to conduct examinations negates the need for a warrant or subpoena
Answer: D
NEW QUESTION # 104
Which three characteristics make non-profit organizations vulnerable to misuse for terrorist financing?
- A. Having access to a considerable sources of funds
- B. Being listed as government nonprofit organization
- C. Having a global presence for national and international operations and financial transactions
- D. Enjoying the public trust
Answer: A,C,D
NEW QUESTION # 105
What is suspicious activity or red flag with regard to a customer's activity? Choose 3 answers
- A. Engaging in wiretransactionswith an offshore account
- B. Paying the tellers he deals with a regular gratuity
- C. Exchanging small denomination bills for large ones
- D. Asking about the bank's fee schedule for a series of transactions
Answer: A,B,C
NEW QUESTION # 106
A money transmitter's nation-wide agent network remits funds to a country in Africa on behalf of an immigrant community based in the United States. A terrorist group is known to operate openly in this African country. In reviewing transaction records, the compliance officer detects a pattern where two customers together visit the same agent each week and remit the same amount of funds. $2,500, to the same recipient in the country in Africa.
What should alert the compliance officer to possible money laundering or terrorist financing activity by the two customers?
- A. The dollar amount of each transaction is just below the record keeping threshold.
- B. The funds are being sent to the same recipient each week.
- C. The customers always visit the same agent.
- D. The customers always visit together.
Answer: D
NEW QUESTION # 107
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?
- A. A corporation owns several affiliates and recently opened separate group life insurance policies for each of the affiliates.
- B. A client paid the quarterly life insurance premium using money orders from two different banks.
- C. A client established a $100,000 charitable annuity with a non-profit organization that provides health and safety assistance internationally.
- D. A client from a high-risk jurisdiction recently purchased property insurance for a real-estate development.
Answer: C
NEW QUESTION # 108
The most important anti-money laundering issue associated with on-line banking is accurately
- A. Analyzing data
- B. Generating reports
- C. Identifying clients
- D. Capturing data
Answer: C
NEW QUESTION # 109
What are some red flags financial institutions should be aware of when trying to verify the identity of a customer? Choose 3 answers
- A. Customer having no permanent address
- B. Customer not having a connected phone
- C. Customer being new to the community
- D. Customer having unusual documents from a foreign country
Answer: A,C,D
NEW QUESTION # 110
What are two requirements of United States financial institutions when conducting business with an international financial institution as a result of the USA PATRIOT Act? (Choose two.)
- A. Performing enhanced due diligence on shell banks
- B. Complying with Special Measures issued under the USA PATRIOT Act
- C. Performing due diligence on correspondent accounts
- D. Visiting the head office of the international financial institution
Answer: A,B
NEW QUESTION # 111
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?
- A. Account signer's government issued identification lists addresses outside of where the branch account was opened
- B. The nature and purpose of the business include international remittance transfers
- C. The names provided at account opening are identified as the corporation's representative nominees
- D. Expected activity was advised to include cash letter and money orders
Answer: B
NEW QUESTION # 112
What are the regulatory risks to a bank employee who willfully violates anti-money laundering laws?
- A. Enforcement actions including fines against the financial institution
- B. Fines and suspension from the industry
- C. Criminal investigation and imprisonment
- D. Investigation and reputational damage
Answer: C
Explanation:
Explanation
Penalties for AML/CFT violations, including criminal and civil penalties, fines, jail terms, as well as internal sanctions, such as disciplinary action up to and including termination of employment.
NEW QUESTION # 113
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. What should the compliance officer do next?
- A. Document reasons for not filing a STR
- B. Investigate these unusual transactions further
- C. Contact the local FIU for advice
- D. File an STR with the competent authorities
Answer: D
NEW QUESTION # 114
In many jurisdictions, financial institutions are prohibited from hiring a person who has been convicted of what type of offense?
- A. Protests of government action
- B. Kidnapping
- C. Offenses involving dishonesty
- D. Driving while under the influence
Answer: C
Explanation:
Explanation
Explanation/Reference:
NEW QUESTION # 115
Following a recent exercise which explained how a correspondent banking operation could be used by money launderers, an anti-money laundering specialist decided to re-write the due diligence procedures for entering into agreements with foreign financial institutions. Which of the following information should be included to establish a rigorous "Know Your Respondent" procedure?
- A. Computer equipment and software capability.
- B. The quality of supervision in the home country.
- C. Respondent's location, in particular the existence of a real physical presence.
- D. Respondent's management, nature of license, and major business activity.
Answer: B,D
NEW QUESTION # 116
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?
- A. Copies of promotional materials sent to the customer
- B. A copy of the institution's STR policy and procedures
- C. Previously filed STRs on the same customer
- D. Account opening documents and account statements
Answer: D
NEW QUESTION # 117
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?
- A. Financial institutions should maintain all necessary suspicious transaction report records on transactions, both domestic are international, for at least 5 years.
- B. Financial institutions should not keep anonymous accounts.
- C. If financial institutions suspect that funds stem from criminal activity, they should be required to close the account.
- D. Financial institutions should not warn their customers when information relating to them is being reported to the competent authorities.
Answer: A
NEW QUESTION # 118
Which key aspect of the Office of Foreign Assets Control's extraterritorial reach specifically relates to prohibited transactions?
- A. Prohibit or reject licensed trade and financial transactions with specified countries, entities and U.S.
individuals - B. Prohibit or reject unlicensed foreign trade and financial transactions with specified countries, entities, and individuals.
- C. Prohibit or reject unlicensed trade and financial transactions with specified countries, entities, and individuals
- D. Prohibit or reject licensed trade and financial transactions with specified countries, entities and non-U.S.
individuals
Answer: C
Explanation:
Explanation
"Prohibit or reject unlicensed trade and financial transactions with specified countries, entities, and individuals. "
NEW QUESTION # 119
Pursuant to the Third European Union Money Laundering Directive, how long after being out of prominent office should a person NOT be considered to be a Politically Exposed Person (PEP)?
- A. 2 years
- B. 4 years
- C. 1 year
- D. 3 years
Answer: C
NEW QUESTION # 120
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