When should a financial institution (FI) exit a relationship? (Choose two.)
A. The reputational risk to the FI posed by closing the account
B. The request from law enforcement to close the account
C. The FI's requirements for opening an account
D. The suspicious conduct of the account holder
E. The FI's stated policies and procedures for closing an account
Which statement is true regarding the FATF standards for SARs/STRs information sharing within a financial group?
A. FIs must retain copies of SARs/STRs and supporting documentation for five years from the date of filing the STRs.
B. FIs cannot share customer information at all since it is confidential.
C. Financial institutions (FIs) should establish sufficient safeguards concerning the confidentiality of information shared for AML purposes.
D. FIs must require approval from regulators to share SARs/STRs information and supporting documentation.
The ultimate goal of economic sanctions is to:
A. protect the reputation of the country.
B. prevent terrorists from profiting from trade.
C. protect national security.
D. reduce the profits of sanctioned countries.
Which statements regarding the USA PATRIOT ACT best describe key aspects that have extraterritorial reach? (Choose three.)
A. It allows for the US Attorney General to subpoena records from a foreign bank with US correspondent accounts, including those that are located outside the US.
B. It allows foreign banks to voluntarily designate a registered agent in the US to accept service of subpoenas.
C. It allows the Secretary of the Treasury to order a US financial institution (FI) to close a correspondent account when a subpoena has not been responded by a foreign bank in a timely manner.
D. It obliges the government to trace the origin of the funds when a seizure of assets occurs in a correspondent account that has been opened and maintained for a foreign bank in the US.
E. It excludes as foreign FIs businesses that would be considered broker-dealers, money transmitters, and currency exchangers.
F. It allows federal banking supervisors to require records of the identity of the owners of a foreign bank from a Fl operating in the US.
Why do organized crime groups often use front companies? (Choose two).
A. Because they are not registered, front companies are not subject to income and other sales taxes.
B. Because using multiple front companies can make it easier to control an entire sector of the economy.
C. Because they are generally subject to lighter due diligence requirements by banks and other financial services providers.
D. Because front companies generally charge higher prices than legitimate companies, so profit margins are higher.
E. Because they can use the company's bank accounts to comingle deposits with those of legal businesses.
Which unusual or suspicious activity by a financial institution's (FI's) employee requires additional investigation and scrutiny?
A. The employee avoids taking periodic vacations despite having accrued vacation time.
B. The employee assists with transactions of a disclosed ultimate beneficiary.
C. The employee lives a lavish lifestyle within their means.
D. The employee is involved in a minimal number of unresolved exceptions.
Which Trust parties should be identified to determine the true nature of the Trust relationship according to Basel guidelines? (Choose three.)
A. Respondents
B. Payees
C. Trust Administrators
D. Trustees
E. Beneficiaries
F. Settlors/grantors
Which actions should a compliance officer take when implementing an enterprise-wide approach to managing money laundering risks in institutions operating with multiple lines of business and in various jurisdictions? (Choose three.)
A. Design systematic controls specific to local regulatory expectations.
B. Create processes to obtain and review information in accordance with its global anti-money laundering policies and procedures.
C. Adopt policies and procedures that comply with relevant laws and work to identify, monitor, and mitigate group-wide risks.
D. Institute a risk-based approach utilizing the most recent risk assessment of only the head office.
E. Establish jurisdiction centric committees where relevant laws are reviewed and analyzed to understand their impact on the organization.
F. Implement a comprehensive baseline for managing risks by administering a process that applies policies and procedures on a group-wide basis.
Which factor should a financial institution (FI) consider prior to sharing customer records within the same jurisdiction?
A. The availability of the institution's information sharing practices
B. The degree to which the collected client data is complete
C. The locally applicable restrictions regarding the disclosure of client information
D. The potential different time zones within the same jurisdiction
How should a compliance officer respond to law enforcement agencies' request for information on a customer undergoing an investigation?
A. Collaborate with the financial institution's (FI's) designated department to determine the appropriate course of action to comply with the request.
B. Gather all requested documentation and send via secure email to the requesting authority.
C. Share details of the investigation with respective colleagues who deal with this customer type on a daily basis.
D. Freeze account assets and advise the customer that assets will not be released until the investigation has been completed.
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