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Question 11

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What should countries do to help prevent non-profit organizations from being abused for the financing of terrorism according to the Financial Action Task Force 40 Recommendations?

Allow for freezing assets of non-profit organizations

Allow for freezing assets of non-profit organizations

Require all non-profit organizations to register with the country's financial intelligence unit

Require all non-profit organizations to register with the country's financial intelligence unit

Ensure non-profit organizations cannot be used to conceal or obscure the diversion of funds intended for legitimate purposes to terrorists' organizations

Ensure non-profit organizations cannot be used to conceal or obscure the diversion of funds intended for legitimate purposes to terrorists' organizations

Create laws that forbid non-profit organizations from completing cross-border transactions without first running them through known terrorist data bases

Create laws that forbid non-profit organizations from completing cross-border transactions without first running them through known terrorist data bases

Suggested answer: C
Explanation:

According to the Financial Action Task Force (FATF) 40 Recommendations, countries should implement measures to prevent the abuse of non-profit organizations (NPOs) for the financing of terrorism. One of these measures is to ensure that NPOs cannot be used to conceal or obscure the diversion of funds intended for legitimate purposes to terrorists' organizations. This means that countries should have effective mechanisms to monitor and supervise NPOs, especially those that are at risk of terrorist financing abuse, and to take appropriate actions against NPOs that are involved in such activities. Countries should also ensure that NPOs maintain adequate records of their activities and transactions, and that these records are accessible to competent authorities. Furthermore, countries should promote transparency and accountability in the NPO sector, and encourage NPOs to conduct due diligence on their donors, beneficiaries, and associates.

FATF 40 Recommendations, Recommendation 8 and Interpretive Note to Recommendation 8

Best Practices on Combating the Abuse of Non-Profit Organisations, FATF, June 2015

COMBATING THE ABUSE OF NON-PROFIT ORGANISATIONS (RECOMMENDATION 8), FATF, June 2015

asked 27/11/2024
Dennis Rodrigues
25 questions

Question 12

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An employee hears a colleague on the telephone with a customer giving advice on how to ensure that a suspicious transaction report will not be filed as a result of a future transaction.

What action should the employee take?

Report the conversation to the local police

Report the conversation to the local police

Report the conversation to the compliance officer

Report the conversation to the compliance officer

Tell the colleague that it is against policy to give such advice

Tell the colleague that it is against policy to give such advice

Ignore the situation because the colleague is the relationship manager for that customer

Ignore the situation because the colleague is the relationship manager for that customer

Suggested answer: B
Explanation:

According to the Anti-Money Laundering Specialist (the 6th edition) resources, the employee should report the conversation to the compliance officer because the colleague is engaging intipping off, which is a serious violation of anti-money laundering laws and regulations. Tipping off is the act of informing a person or entity that they are the subject of a suspicious transaction report or an investigation, or providing any information that may compromise or impede the investigation. Tipping off can result in criminal penalties, civil liabilities, and disciplinary actions for the individual and the institution. Therefore, the employee has a duty to report the colleague's misconduct to the compliance officer, who is responsible for ensuring compliance with the anti-money laundering policies and procedures, and taking appropriate corrective actions.

CAMS Certification Package - 6th Edition | ACAMS, Chapter 3: Compliance Standards for Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT), page 97

CAMS Certifications: How to Get CAMS Certified | ACAMS, CAMS Examination Preparation, page 8

ACAMS CAMS Certification Video Training Course - Exam-Labs, Module 3: Compliance Standards for Anti-Money Laundering and Combating the Financing of Terrorism, video 3.4: Tipping Off and Confidentiality

Exam CAMS: Certified Anti-Money Laundering Specialist (the 6th edition), Question 8, Answer B

asked 27/11/2024
Theodoros Flabouras
47 questions

Question 13

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The USA PATRIOT Act requires United States (U.S.) financial institutions to collect certain information from non-U.S. banks that hold a correspondent account.

Which two pieces of information must a non-U.S. bank provide to its U.S. correspondent to enable them to comply with this requirement? (Choose two.)

The name and address of all shell banks the bank maintains accounts for

The name and address of all shell banks the bank maintains accounts for

The name and address of all beneficial owners who own 25% or more of the bank

The name and address of all beneficial owners who own 25% or more of the bank

Prompt notice of any suspicious activity it detects on any customer who uses the correspondent account

Prompt notice of any suspicious activity it detects on any customer who uses the correspondent account

The name and address of a U.S. person who is authorized to receive service of legal process for the bank

The name and address of a U.S. person who is authorized to receive service of legal process for the bank

Suggested answer: A, D
Explanation:

According to Section 313 of the USA PATRIOT Act, U.S. financial institutions are prohibited from maintaining correspondent accounts for foreign shell banks, which are banks that have no physical presence in any country and are not affiliated with a regulated financial group. Therefore, a non-U.S. bank must provide the name and address of all shell banks that it maintains accounts for, if any, to its U.S. correspondent. This is to ensure that the U.S. financial institution does not indirectly provide services to shell banks, which pose a high risk of money laundering and terrorist financing.

According to Section 319 (b) of the USA PATRIOT Act, U.S. financial institutions that provide a correspondent account to a foreign bank must maintain records of the owners of the foreign bank and the name and address of a U.S. person who is authorized to receive service of legal process for records regarding the correspondent account. This is to facilitate the access of U.S. law enforcement authorities to information related to the correspondent account in case of an investigation or a subpoena.

The other two options, B and C, are not required by the USA PATRIOT Act, although they may be part of the due diligence or enhanced due diligence procedures that U.S. financial institutions apply to their foreign correspondent accounts, as per Section 312 of the USA PATRIOT Act.

USA PATRIOT Act

FACT SHEET for Section 312 of the USA PATRIOT Act Final Regulation and Notice of Proposed Rulemaking

US PATRIOT ACT

CAMS Exam: USA PATRIOT Act Requirements for Opening a Correspondent Account

asked 27/11/2024
Lietuvis Kau
39 questions

Question 14

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What are two legal risks of having inadequate privacy policies and procedures? (Choose two.)

Diminished reputation

Diminished reputation

Industry of regulatory sanctions

Industry of regulatory sanctions

Charges of deceptive business practices

Charges of deceptive business practices

Higher marketing and public relations costs

Higher marketing and public relations costs

Suggested answer: B, C
Explanation:

Having inadequate privacy policies and procedures can expose an organization to legal risks such as industry or regulatory sanctions and charges of deceptive business practices. Industry or regulatory sanctions can result from violating the laws and regulations that govern data privacy and protection, such as the GDPR, the CCPA, or the GLBA. These sanctions can include fines, penalties, injunctions, or revocation of licenses. Charges of deceptive business practices can arise from misleading or false statements about how the organization collects, uses, or discloses personal data, or from failing to comply with its own privacy policies and procedures. These charges can lead to lawsuits, settlements, or enforcement actions by authorities such as the FTC or the state attorneys general.

The 4 Biggest Risks of Non-Compliance With Data Privacy Regulations

Security and privacy laws, regulations, and compliance: The complete guide

An Ethical Approach to Data Privacy Protection

asked 27/11/2024
Ray Savage
28 questions

Question 15

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The vice president of the foreign correspondent banking department at a large United States bank has been notified that a foreign bank with an offshore license wants to open a correspondent account.

Which two things must the vice president acquire under the USA PATRIOT Act? (Choose two.)

A list of all the customers of the correspondent bank

A list of all the customers of the correspondent bank

A list of the types of businesses served by the correspondent bank

A list of the types of businesses served by the correspondent bank

Information relating to the foreign bank's anti-money laundering program

Information relating to the foreign bank's anti-money laundering program

The identity of 10% owners of the correspondent bank, unless it is publicly traded

The identity of 10% owners of the correspondent bank, unless it is publicly traded

Suggested answer: C, D
Explanation:

According to section 312 of the USA PATRIOT Act, U.S. financial institutions that maintain correspondent accounts for foreign financial institutions must apply due diligence to such accounts. The due diligence must include obtaining information relating to the foreign bank's anti-money laundering program, as well as the identity of any person who owns 10% or more of the foreign bank, unless the foreign bank is publicly traded. These requirements are intended to prevent the use of correspondent accounts by foreign shell banks or other entities that may pose a high risk of money laundering or terrorist financing.

USA PATRIOT Act | FinCEN.gov

FACT SHEET for Section 312 of the USA PATRIOT Act Final Regulation and Notice of Proposed Rulemaking | FinCEN.gov

US PATRIOT ACT | State Street

CAMS Exam: USA PATRIOT Act Requirements for Opening a Correspondent Account

asked 27/11/2024
July Truong
42 questions

Question 16

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What is an example of the integration stage of money laundering involving a bank or another deposit-taking institution?

Depositing illicit funds into an account set up for a front company

Depositing illicit funds into an account set up for a front company

Directing third parties to exchange illicit cash for negotiable instruments

Directing third parties to exchange illicit cash for negotiable instruments

Wiring illicit funds from an account at one bank to an account at another bank

Wiring illicit funds from an account at one bank to an account at another bank

Using illicit funds that had previously been deposited to purchase a luxury vehicle

Using illicit funds that had previously been deposited to purchase a luxury vehicle

Suggested answer: C
Explanation:

The integration stage of money laundering is where the illicit funds are reintroduced into the legitimate financial system, making them appear as lawful income or assets. This may include using multiple accounts, transferring funds between different banks or jurisdictions, and engaging in various financial activities to legitimize the illicit funds.The integration stage aims to make the illicit funds appear legitimate and indistinguishable from lawful funds within the financial system1.

Option C is an example of the integration stage of money laundering involving a bank or another deposit-taking institution, as it involves moving the illicit funds from one bank account to another, creating a complex trail of transactions that obscures the origin and ownership of the funds.This technique is also known as wire transfer laundering or electronic funds transfer laundering2.

Option A is an example of the placement stage of money laundering, as it involves depositing the illicit funds into the financial system for the first time, using a front company as a cover for the illegal source of the funds. A front company is a legitimate business that is used to conceal or facilitate illicit activity.

Option B is an example of the layering stage of money laundering, as it involves converting the illicit cash into other forms of value that are less conspicuous and easier to move, such as negotiable instruments. Negotiable instruments are documents that promise payment to a specified person or the bearer, such as checks, money orders, or traveler's checks.

Option D is not an example of the integration stage of money laundering involving a bank or another deposit-taking institution, as it does not involve any financial transactions or accounts. It is rather an example of the integration stage of money laundering involving the purchase of goods or services, such as a luxury vehicle, with the illicit funds that had previously been deposited and layered through the financial system.

1: Integration Stage of Money Laundering: Bank or Deposit-Taking Institution

2: Process of Money Laundering: Placement, Layering, Integration - Tutorial

: ACAMS Study Guide 6th Edition, Chapter 2, page 32

: ACAMS Study Guide 6th Edition, Chapter 2, page 34

: The Three Stages Of Money Laundering And How Money Laundering Works

asked 27/11/2024
tirou RANGA
46 questions

Question 17

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Which aspect of the USA PATRIOT Act impacts foreign financial institutions?

Requiring enhanced due diligence for foreign shell banks

Requiring enhanced due diligence for foreign shell banks

Expanding sanctions requirements to a U.S. financial institution's foreign branches

Expanding sanctions requirements to a U.S. financial institution's foreign branches

Expanding the anti-money laundering program requirements to all foreign financial institutions

Expanding the anti-money laundering program requirements to all foreign financial institutions

Providing authority to impose special measures on institutions that are of primary money-laundering concern

Providing authority to impose special measures on institutions that are of primary money-laundering concern

Suggested answer: D
Explanation:

Section 311 of the USA PATRIOT Act grants the Secretary of the Treasury the authority to designate foreign jurisdictions, financial institutions, classes of transactions, or types of accounts as being of primary money laundering concern, and to impose one or more of five special measures on them. These special measures range from requiring enhanced recordkeeping and reporting to prohibiting U.S. financial institutions from opening or maintaining correspondent accounts for the designated entities. The purpose of these special measures is to protect the U.S. financial system from money laundering and terrorist financing risks posed by the designated entities.

USA PATRIOT Act | FinCEN.gov

FACT SHEET for Section 312 of the USA PATRIOT Act Final Regulation and Notice of Proposed Rulemaking | FinCEN.gov

International Financial Crime: Treasury's Roles and Responsibilities Should Be Updated - GovInfo

asked 27/11/2024
Foo goo
47 questions

Question 18

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The compliance officer at a crowd funding website is in charge of monitoring new crowd funding projects.

Recently, the number of crowd funding projects has significantly increased.

Which red flag indicates the highest anti-money laundering risk?

Those with the largest number of donors

Those with the largest number of donors

Projects that get funding within days of their start

Projects that get funding within days of their start

Projects with the highest monetary success threshold

Projects with the highest monetary success threshold

Projects that start and close and are fully funded within a very short period

Projects that start and close and are fully funded within a very short period

Suggested answer: D
Explanation:

According to the ACAMS study guide, one of the red flags for money laundering in crowdfunding platforms is ''projects that are fully funded within a very short period of time, especially if the funding comes from a small number of donors or from a single donor'' (p. 222). This could indicate that the project is a front for laundering illicit funds or financing terrorism. The other options are not necessarily indicative of money laundering risk, as they could be explained by legitimate factors such as the popularity, urgency, or ambition of the project.

ACAMS. (2020).Study Guide for the Certification Examination for Anti-Money Laundering Specialists (6th ed.). Miami, FL: ACAMS.

ESMA.(2015)Questions and Answers: Investment-based crowdfunding and money laundering/terrorist financing1. Paris, France: ESMA.

asked 27/11/2024
Assane SENE
45 questions

Question 19

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Which two statements in the Wolfsberg Group's ''Suppression of the Financing of Terrorism'' define the role financial institutions should play in the fight against terrorism? (Choose two.)

Financial institutions need to assist competent authorities in fighting terrorist financing through prevention, detection and information sharing.

Financial institutions need to assist competent authorities in fighting terrorist financing through prevention, detection and information sharing.

Financial institutions need to continuously analyze the types of activity related to terrorist financing and develop models that in the long term will drive down terrorism.

Financial institutions need to continuously analyze the types of activity related to terrorist financing and develop models that in the long term will drive down terrorism.

Financial institutions should have financial intelligence units dedicated to the investigation of activity that would lead to the detection of terrorist financing as a means to decrease global terrorism.

Financial institutions should have financial intelligence units dedicated to the investigation of activity that would lead to the detection of terrorist financing as a means to decrease global terrorism.

Financial institutions should apply extra due diligence whenever they see suspicious or irregular activities, especially when customers are engaged in sectors or activities that have been identified by competent authorities as being used for the financing of terrorism.

Financial institutions should apply extra due diligence whenever they see suspicious or irregular activities, especially when customers are engaged in sectors or activities that have been identified by competent authorities as being used for the financing of terrorism.

Suggested answer: A, D
Explanation:

The correct answer is A and D, as these two statements are directly quoted from the Wolfsberg Group's ''Suppression of the Financing of Terrorism'' document1. Statement A describes the general role of financial institutions in the fight against terrorism, while statement D describes the specific due diligence measures that financial institutions should apply to customers engaged in high-risk sectors or activities. Statement B and C are not part of the Wolfsberg Group's document, and they are not accurate descriptions of the role of financial institutions in the fight against terrorism. Statement B is too vague and unrealistic, as financial institutions cannot guarantee to drive down terrorism by analyzing activity types. Statement C is too narrow and prescriptive, as financial institutions may not have the resources or the mandate to create dedicated financial intelligence units for terrorist financing.

asked 27/11/2024
Amanuel Mesfin
51 questions

Question 20

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What is the appropriate compliance control for identifying politically exposed persons (PEPs) according to the Basel Committee's paper on Customer Due Diligence for Banks?

Determining that a local figure is a PEP

Determining that a local figure is a PEP

Reviewing when a relationship is established

Reviewing when a relationship is established

Reviewing relationships at account opening and on a periodic basis

Reviewing relationships at account opening and on a periodic basis

Requiring that the customer discloses that they are a PEP or an associate of a PEP

Requiring that the customer discloses that they are a PEP or an associate of a PEP

Suggested answer: C
Explanation:

According to the Basel Committee's paper on Customer Due Diligence for Banks1, banks should review their existing customer relationships on a regular basis, especially for higher risk categories of customers or business relationships. This includes identifying whether the customer or the beneficial owner is a PEP, either at the account opening stage or later, as a result of a change in the customer's circumstances or profile. The paper also states that banks should apply a risk-based approach to determine the appropriate level and type of due diligence depending on the risk profile of the customer or the beneficial owner.

Basel Committee on Banking Supervision, Customer due diligence for banks, October 20011

FATF Guidance: Politically Exposed Persons (Recommendations 12 and 22), June 20132

ACAMS, CAMS Examination Study Guide, 6th Edition, Chapter 4

asked 27/11/2024
adnan reubin
37 questions
Total 764 questions
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