AMLCA Quiz 42

Select more than one answer
What is the primary goal of an AML/CFT program?
I. To protect the organization against bribery.
II. To protect the organization against terrorist financing.
III. To protect the organization against money laundering.
IV. To enhance the economic stability of a country.
V. to build bilateral relations with European countries.

Select the most appropriate statement for the establishment of the AML/CFT program:
I. The AML/CFT program should not establish any standards for the enterprise that are designed to comply with all applicable laws and regulations.
II. The AML/CFT program should establish maximum standards for the enterprise that are reasonably designed to comply with all applicable laws and regulations.
III. The AML/CFT program should establish minimum standards for the enterprise that are reasonably designed to comply with all applicable laws and regulations.
IV. The AML/CFT program should establish an audit policy for the enterprise that is reasonably designed to monitor all applicable laws and regulations.
V. The AML/CFT program should establish only two standards for the enterprise that are reasonably designed to comply with all applicable laws and regulations.

Select more than one answer:
Before designing an AML/CFT program, it is imperative to understand the requirement of:
I. Governments policies
II. Financial institution
III.Insurance intermediaries
IV. Its employees and customers
V. Personal businesses

Select more than one answer:
A risk-based approach requires financial institutions to have systems and controls that are commensurate with the specific risks of:
I. Money laundering
II. Terrorist financing
III. Bribery
IV. Drug Trafficking
V. Child Abuse

Per FATF, if there are circumstances where the risk of money laundering or terrorist financing is higher, then what measures should be taken?
I. Enhanced verification of identities
II. Bio-metric system for each transaction
III.Installation of new technologies
IV. Enhanced personal security
V. Enhanced customer due diligence

Select more than one answer:
What factors are recommended by FATF to consider while assessing a risk?
I. Illegal immigrants risk or other travel documents risk
II. Customer risk factors such as non-resident customers or cash-intensive businesses
III.Product, service, transaction or delivery channel risk factors
IV. Personal business risk
V. Country or geographic risks

What risks should be included while performing a risk-based analysis?
I. Inherent and political risks in the country.
II. Appropriate natural disaster risk.
III.Appropriate inherent and residual risks in the country.
IV. Possible terrorist attack risk in the country.
V. Water shortage risk at the country.

Select more than one answer:
What are New business products or services be evaluated?
I. Insurance vulnerabilities
II. Any sanctions vulnerabilities
III. Money laundering
IV. Security threats vulnerabilities
V. Compliance with illegal policies

Which statement holds for a risk?
I. A risk is non-dynamic and needs to be publicized globally.
II. Risk is dynamic and does not need to be continuously managed.
III. Risk is dynamic and needs to be continuously managed.
IV. A risk is permanent and therefore does not need to be continuously managed.
V. Risk is one’s authority in any business that needs to be continuously managed.

Select more than one answer:
In AML/CFT risk categories, a high-risk customer may include:
I. Politically exposed persons
II. Fair Politicians
III.Certain types of money services businesses
IV. Cash-intensive businesses
V. Politically disclosed persons

If a retail business accepts low to moderate levels of cash but is not considered as a cash-intensive, it may be included in:
I. A low-risk category
II.A partial risk category
III.A medium-risk category
IV. A no-risk category
V. A high-risk category

Which model is used to determine the category of risk (geography, customer type, and products & services) as well as the overall customer risk?
I. One Dimensional Risk Model
II. Risk & Task Force Model
III. Risk scoring model
IV. Three dimensional Risk model
V. All conditional Risk Determination model

Select more than one answer:
As every financial institution develops transaction history with customers, it should consider modifying the risk rating of the customer, based on:
I. Unusual activity, such as alerts, cases and suspicious transaction report (STR) filings.
II. Receipt of law enforcement inquiries, such as subpoenas.
III.Transactions that abide by economic sanctions programs.
IV. FATF audit report.
V. Transactions that violate economic sanctions programs.

Select more than one answer:
Some types of customers are inherently high risk for money laundering, identify high-risk costumers among them:
I. Banks
II. Casinos
III. Private Hospitals
IV. Offshore corporations
V. Librarians & Teachers

In November 2014, On whom did the Financial Crimes Enforcement Network (FinCEN) issue a $300,000 civil money penalty for AML program failures?
I. North Dade Community Development Federal Credit Union.
II.South Dade Community Development Provincial Credit Union.
III. Dale Community Development Global Credit Union.
IV. EU Community Development Global Credit Union.
V. Micro Dale Community Development Federal Credit Union.

Select more than one answer:
Why is it an important element to assess AML/CFT risk while reviewing new and existing products and services that the institution or business offers?
I. To determine the quality of the product or service.
II. To aid in enhancing customer services.
III. To determine the possible risks of money laundering.
IV. To determine the possible risks of terrorist financing.
V. To aid in drafting international policies.

Select the most appropriate statement for product scoring:
I. Product scoring is neither universal nor different financial institutions face varying degrees of risk.
II. Product scoring is not universal because different financial institutions face the same degrees of risk.
III. Product scoring is not universal because different financial institutions face varying degrees of risk.
IV. Product scoring is performed by higher officials of government because different financial institutions face varying degrees of risk.
V. Product scoring is a complex method performed by individuals only.

Select more than one answer;
Identify certain specific banking functions or products that are considered high-risk:
I. Stock Exchange.
II. Private banking.
III. Offshore international activity.
IV. No loan Schemes.
V. Deposit-taking facilities.

Select more than one answer:
What are the basic elements of an AML/CFT program?
I. A system of political parties, its mandate & public opinion.
II.An ongoing employee training program.
III.An old employee training program.
IV.A system of internal policies, procedures, and controls.
V. An independent audit function to test.

Select more than one answer:
What are the foundational factors that aid in developing a successful AML/CFT program?
I.Continual development of a financial institution’s customer service.
II. Continual development of a financial institution’s office infrastructure.
III.Continual development of a financial institution’s policies.
IV.Continual development of a financial institution’s procedures & controls.
V. Continual development of a financial institution’s bilateral relations.

In January 2014, the UK Financial Conduct Authority (FCA) fined Standard Bank PLC (Standard Bank) £7.64 million for:
I. Supporting terrorist organizations indirectly.
II. Poorly managed office buildings.
III.Failures relating to adequate loan policies.
IV. Failures relating to customer service.
V. Multiple failures relating to its AML/CFT policies, procedures, and controls.

Who is responsible for approving AML or CFT policies?
I. Executive management or the board of directors
II. EU committee members
III.UN General Assembly
IV. Company’s junior staff
V. Government Banks

Identify the responsibility of The Compliance Function:
I. Supervising the development of a new constitution.
II. Monitoring the controls of the technologies.
III. Monitoring the controls of the business.
IV. Developing annual reports for FATF-related bodies.
V. Highlighting major issues in the banking sector.

Identify the quality of the compliance officer that is vital to the success of an institution’s AML/CFT program:
I.The ability of the compliance officer to fight with co-workers.
II.The ability of the compliance officer to communicate effectively.
III.The ability of the compliance officer to make a social network locally.
IV.The ability of the compliance officer to travel regularly.
V. The ability of the compliance officer to make personal relations.

In March 2016, FinCEN issued a civil money penalty against Thriftway Food Mart (an MSB), its owner, and the institution’s compliance officer for:
I. Violations of Bank Cash procedures.
II. Bank transactions to Swiss Bank.
III. Willful and repeated violations of the Bank Secrecy Act.
IV. Disclosing Bank’s employee’s information.
V. Accusing the bank of corruption.

The first step in designing an effective AML/CFT training program is to:
I. Highlight major issues
II. Identify the target audience
III. Identify the key features of the program
IV. Hire a trainee
V. Organize a major event

Why is it that two institutions cannot exactly have the same compliance structure?
I. Because the risk facing each institution is going to be different.
II.Because it is illegal according to universal laws.
III.Because the staff members of each institution are going to be different.
IV.Because the risk facing each institution is going to be same.
V. Because it becomes difficult to implement the same structure globally.

Select more than one answer:
Identify the various duties of Sanctions Screening ( AML/CFT subgroup):
I. Assigns a risk code to all clients.
II. Manages sanctions screening software applications or processes.
III.Monitors regulatory environment for changes to the program.
IV. Reviews suspected matches and reports valid matches.
V. Monitors and reconciles the data being received from the source systems.

Which statement holds for board & senior management’s training?
I. The board and senior management do not need any training as personnel in the third line of defense.
II. The board and senior management do not need the same degree of training as personnel in the first, second or third lines of defense.
III. The board and senior management need the same degree of training as personnel in the first, second or third lines of defense.
IV. The board and senior management need training annually in the first, second or third lines of defense.
V. The board and senior management need the same degree of training as government officials.

Select more than one answer:
Risk factors where enhanced CDD measures have to be taken include:
I.Customer risk factors.
II. Delivery channel risk factors.
III.Country or geographic risk factors.
IV. Negligence or ignorance of risk factors.
V. Insurance risk factors.