Which statement best describes a key aspect of the AML Directive of the EU regarding business relationships and transactions with high-risk third countries?
A. Obliged entities should voluntarily consider the implementation of increased external audit requirements for branches and subsidiaries located in high-risk countries.
B. Obliged entities, in accordance with the member state regulations, should determine at a national level the measures that can be used for enhanced due diligence.
C. Obliged entities should implement additional mitigating measures complementary to the enhanced customer due diligence procedures, in accordance with a risk based approach.
D. Obliged entities should not take into account specific circumstances when performing enhanced due diligence measures.
Enhanced due diligence (EDD) may be bypassed for which situation?
A. On-boarding a branch or majority-owned subsidiary of an EU or US FI located in a high-risk third country that fully complies with group-wide policies and procedures.
B. On-boarding a subsidiary in a high-risk country with a complex ownership structure of a long-standing and reputable customer based in the EU or US.
C. On-boarding a casino headquartered in the EU or US that is part of an international hotel chain, provides less than 50% of overall revenue and that fully complies with group-wide policies and procedures.
D. On-boarding a reputable Politically Exposed Person (PEP) from the EU onto the wealth management arm of a US financial institution (FI).
Under the Egmont Group Principles, information exchange among Financial Intelligence Units (FIUs) is conducted:
A. without the expectation of reciprocity on how the information will be used.
B. freely, spontaneously, and upon request, on the basis of reciprocity.
C. only if the status of the foreign FIU is related to law enforcement.
D. with set limits on the amount of financial and administrative information provided.
What core objective does the Egmont Group suggest would lead to an effective national Financial Intelligence Unit (FIU)?
A. The FIU must operate from physically separated premises from other law enforcement agencies and government offices.
B. The FIU meets the Egmont Group assessment criteria.
C. The FIU must have absolute trust amongst national and international stakeholders before sensitive information will be exchanged with confidence.
D. The FIU must be able to promote the value of the government's commitment to embed a corruption free society within the country.
A high volume of incoming wire transfers generates an alert about a client. The funds are immediately debited by cash withdrawals and outgoing wire transfers. Which information should be reviewed first to investigate this alert/case?
A. Open source information
B. Adverse media search
C. Customer profile
D. Account activity
Which entities require due diligence when the correspondent banking client is not controlled by its parent? (Choose two.)
A. The parent of the correspondent banking client
B. The clients of the correspondent banking client
C. The entities exhibiting higher risk characteristics
D. The third-parties providing services to the correspondent bank
E. The correspondent banking client itself
An employee of a financial institution (FI) receives an email from a client directing the employee to transfer funds from the client's account to another account overseas. The bank employee complies, but later, the Fi discovers the email did not come from the client. Which type of cyber-enabled crime occurred?
A. Phishing
B. Spear phishing
C. Spoofing
D. Ransomware
A new AML Officer for a US-based money service business (MSB) is drafting procedures around types of activity that require further review. Which should be included? (Choose two.)
A. A customer visiting multiple branches of the MSB on the same day in order to transfer funds internationally.
B. A customer buying several money orders totaling over $10,000 USD using debit card on the same day using government-issued identification.
C. A customer sending funds to a family member living in a high-risk jurisdiction that is subject to civil unrest.
D. A customer buying multiple money orders for $250 totaling $2,000 USD.
E. A customer attempting to buy money orders under $3,000 USD in cash multiple times a day.
One example of an external factor that will affect an organization's AML risk includes:
A. acceptance of new customer types.
B. introduction of mobile banking for all clients.
C. political system changes in a specific jurisdiction.
D. introduction of a new product which will be offered to wide range of clients.
To understand if the customer operates in line with the firm's risk appetite for a specific industry segment, a financial institution (FI) must:
A. obtain the name and address, country identification number and date of birth of a non-customer who purchases a monetary instrument.
B. obtain identifying information for beneficial owners through a completed certification form from the individual opening the account on behalf of the legal entity customer.
C. obtain sufficient customer information to understand the nature and purpose of customer relationships for the purpose of developing a customer risk profile.
D. obtain the name, date of birth for an individual, address and identification number from each customer before opening the account.
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