An incoming urgent international wire transfer in U.S. dollars has been identified by the sanctions screening team. The transaction is a large rounded amount and the name of the beneficiary is "North Korean Cigars Company" with an address in an industrial zone in Tianjin, China.
Which action should the sanctions team take?
A. Hold the transaction and investigate the company before releasing the funds
B. Block the transaction immediately because it contains a reference to North Korea
C. Call the correspondent bank and ask if it has performed due diligence on the originator
D. Release the transaction so that the Chinese correspondent bank will not be negatively impacted
An auction house dealing in fine art and antiques sells a well-known painting at a price of $12 million to an agent bidding for a group of local investors. The same painting sold ten years prior at auction for $5 million. The auction house receives payment for the painting via wire transfer from an account maintained in an offshore jurisdiction by the investt.
What are the two money laundering red flags? (Choose two.)
A. The payment is received via wire transfer.
B. An agent bids on the painting for a group of investors.
C. The painting has more than doubled its value in ten years.
D. Payment is received from an account in an offshore jurisdiction.
E. Lack of beneficial ownership details for the originating account.
How can violations of anti-money laundering laws be a risk to individuals?
A. Violations can result in civil and criminal fines and penalties against the individuals.
B. Violations can result in additional legislation that the individuals have to comply with.
C. Violations can result in enforcement actions that damage the reputation of the individual's employer.
D. Violations can result in additional and more stringent anti-money laundering training for individuals.
A director of a financial institution was convicted of laundering money as part of a Ponzi scheme and terminated. As a result of an internal investigation evidence proved that an employee assisted in the illegal activity.
Which action should the institution take?
A. Discipline the employee with no further action
B. Discipline the employee and inform local authorities
C. Since the employee was not charged, no further action is required
D. Require all employees to complete additional anti-money laundering training
An institution receives a request for credit from a local company that has been a client for many years. The information provided by the company indicates that its assets have increased substantially with the addition of several new subsidiaries. Further research performed by the institution indicates the new subsidiaries are recently created shell companies.
Could this indicate potential money laundering?
A. No, the company has been a client for many years.
B. Yes, shell companies are typically created to manage tax liabilities.
C. No, it is normal for a business to diversify by creating shell companies.
D. Yes, the shell companies could have been created to hide beneficial ownership.
The new compliance officer has reviewed the bank's anti-money laundering training program. The program consists of online training for all new employees within 30 days of hire date and annual refresher training to all employees. In addition, there is specialized training for areas that deal with higher risk products and customers.
Over the last year, there have been no regulatory changes and no new products or services have been introduced. The compliance officer wants to propose to the board of directors that the annual refresher training is still current and can be delivered unchanged to all employees.
Which two critical pieces of information could be missed by taking this approach? (Choose two.)
A. Any new trends, developments, or risks
B. Results of the previous year's risk assessment
C. Changes to internal policies, procedures, and processes
D. Links to enforcement actions identifying violations in other financial institutions
Which method to finance terrorism involves falsifying transaction-related documents?
A. Bribery
B. Black market peso exchange
C. Trade-based money laundering
D. Informal value transfer system
After review of the financial institution's enterprise-wide anti-money laundering risk assessment, the new compliance officer identifies several deficiencies that need attention. Which deficiency could lead to the highest potential for unmitigated risk?
A. The risk assessment is several years old and does not cover all current products and services.
B. The risk assessment is revisited too frequently thereby diverting critical resources from other compliance tasks.
C. The risk assessment is managed by a different team from the previous assessment therefore disrupting continuity of institutional knowledge.
D. The risk assessment does not anticipate potential risks even though the financial institution has no immediate plans involving those risks.
What are two purposes of the USA PATRIOT Act? (Choose two.)
A. To strengthen United States' measures to prevent, detect, and prosecute international money laundering and financing of terrorism
B. To subject to special scrutiny foreign jurisdictions, foreign financial institutions, and classes of international transactions or types of accounts that are susceptible to criminal abuse
C. To administer and enforce economic and trade sanctions based on United States foreign policy and national security goals against targeted foreign countries and regimes, terrorists, and international narcotics traffickers
D. To set standards and promote effective implementation of legal, regulatory, and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system
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 customers always visit together.
B. The customers always visit the same agent.
C. The funds are being sent to the same recipient each week.
D. The dollar amount of each transaction is just below the record keeping threshold.
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