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347
7Chapter
isclaimer: This set of practice questions is meant to indicate neither the length nor composition of the actual CAMS Examination. Unlike the questions on our Examination, these were not subjected to psychometric screening or approved by the Examination Task Force and doctorate level psychometrician. They are merely questions that were considered for inclusion in the CAMS Examination, and, though not approved, offer an indication of the types of questions we pose.
1. Whichofthefollowingisthemostcommonmethodoflaunderingmoneythroughalegalmoneyservicesbusiness?
A. Purchasingstructuredmoneyinstruments.
B. Smugglingbulk-cash.
C. TransferringfundsthroughPayableThroughAccounts(PTAs).
D. ExchangingColombianpesosontheblackmarket.
Practice Questions For Certification Examination
D
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2. Ingeneral,thethreephasesofmoneylaunderingaresaidtobe:Placement
A. Structuringandmanipulation.
B. Layeringandintegration.
C. Layeringandsmurfing.
D. Integrationandinfiltration.
3. Whichstatementistrue?
A. Bust-outschemesarepopularincreatinglargebankruptcyfraudswherebusinessessecureincreasingloansinexcessoftheactualvalueofthecompanyorpropertyandthenrunwiththemoney,leavingthelendertoforecloseandtakeasubstantialloss.
B. CuckoosmurfingisasignificantmoneylaunderingtechniqueidentifiedbytheFinancialActionTaskForce,whereaformofstructuringusesnestedaccountswithshellbanksinsecrecyhavens.
C. Initsrevised40Recommendationsof2003,theFATFissuedforthesecondtimealistof“designatedcategoriesofoffense”thatassertscrimesforamoneylaunderingprosecution.
D. E-cashisnotattractivetothemoneylaundererbecauseitcannotbecompletelyanonymousanddoesnotallowforlargeamountstobe“transported”quicklyandeasily.
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4. Whichofthefollowingisanindicationofpossiblemoneylaunderinginaninsuranceindustryscenario?
A. Insuranceproductssoldthroughintermediaries,agentsorbrokers.
B. Single-premiuminsurancebonds,redeemedatadiscount.
C. Policyholderswhoareunconcernedaboutpenaltiesforearlycancellation.
D. Policyholderswhomakefulluseofthe“freelook”period.
5. Whichofthefollowingactivitiesaretypicallyassociatedwiththeblackmarketpesoexchange(BMPE)moneylaunderingsystem?
1. ConvertingillicitdrugproceedsfromdollarsoreurostoColombianpesos.
2. ConvertingillicitdrugproceedsfromColombianpesostodollarsoreuros.
3. FacilitatingpurchasesbyColombianimportersofgoodsmanufacturedintheUnitedStatesorEuropethroughpesobrokers.
4. FacilitatingpurchasesbyEuropeanorU.S.importersofgoodsmanufacturedinColombiathroughpesobrokers.
A. 1and3only
B. 1and4only
C. 2and3only
D. 2and4only
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6. WhatistheRightOfReciprocityinthefieldofinternationalcooperationagainstmoneylaundering?
A. Thelegalprinciplethatfinancialinstitutionsthathavereferredcustomerstootherfinancialinstitutionscanshareinformationaboutthesecustomerswiththeotherinstitutions.
B. AruleoftheBaselCommitteeallowingproperlyregulatedfinancialinstitutesofanothermemberstateoftheBaselCommitteetodobusinesswithoutadditionalsupervisiontothedegreethattheotherstategrantsthesameright.
C. TherightofeachFATFmembercountrytodelegateprosecutionofacaseofmoneylaunderingtoanothermemberthatisalreadyinvestigatingthesamecase.
D. Aruleinthelawofacountryallowingitsauthoritiestocooperatewithauthoritiesofothercountriestothedegreethattheirlawallowsthemtodothesame.
7. Thegreatestriskformoneylaunderingisforcasinosthat
A. Providetheircustomerswithawidearrayofgamblingservicesincludingpooledaccounts.
B. Operateoutsidethefinancialintelligenceunitinanon-Egmontmembercountrytoavoidmutuallegalassistancetreaties.
C. Allowcustomerswithcreditbalancestowithdrawfundsbycheckinanotherjurisdiction.
D. Onlysendsuspicioustransactionreportstothefinancialintelligenceunitofthecountryitoperatesin.
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8. Whichstatementistrueregardingexemptaccounts?
A. Theyhavesweepfeaturestosettletransactionsbetweenfinancialinstitutionsandprovideanalternativetotraditionalbankinginstruments.
B. Withtheseaccounts,adistinctionisgrantedtocertaincustomersofafinancialinstitutionpermittingtheinstitutiontowaiveitsresponsibilitytoreportcertaintransactionsotherwiserequired.
C. Theydonotnecessarilyneedtobedocumentedandthefinancialinstitutionthatsecurestheexemptionsisnotrequiredtomonitortheirfinancialtransactions,unlesstheyinvolveNCCTcountries.
D. Thesearecheckingaccountsthataremaintainedforrespondentbanksthroughanetworkormechanismthatoperatesoutsidetheregulatedsystem,permittingreducedduediligencebythefinancialinstitution.
9. Dirtymoney,derivedfromcriminalactivitiesofBelgianCriminalA,issenttoaforeignbankaccountofCorporationB.TheninBelgium,anewinvestmentCompanyCisincorporated.CriminalAisappointedasadirectorofCompanyC.CompanyCborrowsmoneyfromtheforeignCompanyBandbuysrealestateinBelgium.Therealestateisrentedtothirdparties.Director(Criminal)Aalsorentsanapartmentinthebuilding.Withthefundsgeneratedbytherent,CompanyCpaysofftheloantoCorporationB,andthesalaryofDirectorA.CriminalAnowconvertedhisdirtymoneyinlegalfunds.Thislaunderingmethodiscommonlyreferredtoaswhat?
A. Offsettingrealestatetransactions.
B. Loanback.
C. Cuckoosmurfing.
D. Loanmanipulation.
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10.Anewcustomerapproachesabanktoopenacommercialaccount.Thecustomerprovidesanaddressfortheaccountlocatedacrossthecityfromthebranch.Whenaskedbytheaccountrepresentativeifthecustomerrequiresanyadditionalbankingservicesthecustomerrespondshe/sheisalsointerestedinopeningapersonalinvestmentaccount.Theaccountrepresentativerefersthecustomertotheirbroker-dealer.Thecustomertellsthefirmrepresentativeshehasneverhadabrokerageaccountbeforeandhasafewquestionsabouthowaninvestmentaccountworks.Thecustomeraskshowdepositscanbemadeintoheraccount,ifthereareanyreportingrequirements,andhowtogoaboutmovingbalancesoutoftheaccountusingwiretransfers.Noquestionsareaskedaboutfeesassociatedwiththesetransactions.Whichofthefollowingitemswouldbeconsideredsuspicious?
1.Thecustomerasksmanyquestionsaboutthebrokerageaccount,butnoneofthemarerelatedtoinvesting.
2.Thecustomerisopeningacommercialaccountandatthesametimeapersonalinvestmentaccount.
3.Theaddressoftheaccountholderandthebranchwherethecustomercametoopentheaccountarenotclosetoeachother.
4.Thatthecustomerappearsunconcernedaboutthefees.
A. 1,2,and3only
B. 1,2,and4only
C. 1,3,and4only
D. 2,3,and4only
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PRACTICE QUESTIONS FOR CERTIFICATION EXAMINATION
11.Internationaltradeingoodsandservicescanbeusedaseitheracoverformoneylaunderingorasthelaunderingmechanismitself.WhatisMOSTimportantforthelaundererwhenengaginginthismethod?Theability
A. Toover-orunder-invoicethegoods.
B. Toselltheexportedgoodsforasmuchaspossible.
C. Tousegoodsthatdonotneedtobedeclared.
D. Tousehigh-valueassetssuchasluxurycarsorboats.
12.Whichofthefollowingstatementsistrue?CorrespondentbankingisMOSTvulnerabletomoneylaunderingwhenthecorrespondentaccountis
A. Maintainedforforeignfinancialinstitutionsthatarebanks.
B. Notusedtoprovideservicesdirectlytothirdparties.
C. Maintainedforaforeignbankthatdoesnothaveaphysicalpresenceinanycountry.
D. Maintainedforaforeignprivatebankthatispubliclytradedandisaqualifiedintermediary.
13.Whichstatementistrue?Lawyers____
A. InFATFmembercountriescangenerallynotbeusedtoserveasformationagentstosetuptrusts,frontcompaniesorshellcompanies.
B. Andsimilarprofessional“gatekeepers”arecalledmoneyservicesbusinesses.
C. Cangenerallynotbeusedtoactasanomineeshareholderforabeneficialowner.
D. Canbeabusedbylaunderersbyusingtheaccountstheysetupforthemfortheplacementandlayeringoffunds.
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14.TheThirdEUMoneyLaunderingDirectiveof2005appliestowhichofthefollowingfirms?
A. Auditors,estateagentsbasedintheEU.
B. U.S.FinancialinstitutionscoveredbytheUSAPatriotAct.
C. ShellfirmsinsideandoutsidetheEU.
D. EUbasedhighvaluegooddealerswhodealincashof10,000Euroormore.
15.AccordingtotheEUDirectivesof2001,anindependentlegalprofessionalisobligatedtoreportsuspicionofmoneylaunderinginaclientrelationshipwhen
A. Representingaclientinalegalmatter.
B. Ascertainingthelegalpositionforaclient.
C. Participatinginfinancialorcorporatetransactions.
D. Obtaininginformationassociatedwithajudicialproceeding.
16.WhichofthefollowingisthemostdifficultregulatorychallengefacingaforeignfinancialinstitutionwithacorrespondentbankingrelationshipintheU.S.?
A. USAPatriotAct.
B. BaselDueDiligencePrinciplesforBanks.
C. FATFGuidanceonTerroristFinancing.
D. UNSecurityCouncilResolutiononCorrespondentBanking.
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PRACTICE QUESTIONS FOR CERTIFICATION EXAMINATION
17.WhatwastheBaselCommittee’smainmotivationtoencouragestrongKnowYourCustomerprogramsinitspaper“CustomerDueDiligenceforBanks?”
1. MirrorFATF’sKYCrecommendations.
2. MeetEuropeanUnionguidelines.
3. Protectthesafetyandsoundnessofbanks.
4. Protecttheintegrityofbankingsystems.
A. 1and2only
B. 1and4only
C. 2and3only
D. 3and4only
18.Whatisthedefinitionofapredicateoffense?
A. Lawfulorunlawfulactivitythatinvolveswillfulblindness,andifthereisaninternationalelementtothecrime,canleadtoasuspiciousactivityreport.
B. Unlawfulactivitywhoseproceeds,ifinvolvedinthetransaction,cangiverisetoprosecutionforthecrimeofmoneylaundering.
C. Aninterfacewhichistheunderlyingsegmentofasuspicioustransactionmonitoringsystem.
D. Aspecifiedunlawfulactivitythatiscommittedthroughconcentrationaccountsdeceivingcustomersthatarenotdirectlyrelatedtotheaccount.
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19.Whatisconsideredabeneficialownerofanaccount?Apersonorentity_____
A. Thathasdirectsignatoryauthorityoveranaccount,andwhosenameappearsontheaccount.
B. Thatisultimatelyentitledtothefundsintheaccount,eventhoughhisnamemaynotappearontheaccount.
C. Thatistheoriginatorandthedestinationofmost(butnotall)transactionsconductedwithintheaccount,butwhodoesnotultimatelycontrolsuchfunds.
D. Thatisagatekeeper,hasthelegaltitletotheaccount,andtypicallytransfersthefundstoatrust.
20.AbankinItalyholdsabusinessaccountforanItaliancompanythatsellsgoldthroughoutEuropeandtheWesternHemisphere.Thebankknowsthepurposeofthisaccountistoreceivepaymentforsales.Areviewoftheaccountshowsapatternofwiretransferscomingfrompayable-throughaccounts.ThereisalsoapatternofpurchasesofgoldbullionheldinSwissbanks.TheMOSTimportantfactorinassessingwhethermoneylaunderingisathreatisthatthe
A. Customersellsgoldinregionswhereitcarriesanimportantorreligioussignificancethataddstothehighintrinsicvalue.
B. Paymentscomefromthird-partyaccounts.
C. Paymentsreceivedareintheformofwiretransfersinsteadofcash.
D. Accountholdermaintainsgoldbullionratherthanfinishedpiecesofjewelry.
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PRACTICE QUESTIONS FOR CERTIFICATION EXAMINATION
21.WhichofthefollowingshouldanationallegislatureconsiderwhencriminalizingmoneylaunderinginlinewiththeCFATF19Recommendations?
1. Donotlimitthenumberofspecificpredicateoffensesformoneylaundering.
2. Criminalizeconspiracyorassociationtoengageinmoneylaundering.
3. Indicatewhetheritisrelevantthatapredicateoffensemayhavebeencommittedoutsidethelocaljurisdiction.
4. Avoidcriminalizingmoneylaunderingoffensesinwhichtheoffenderlacksactualknowledgeofacriminalconnectiontofunds.
A. 1,2,and3only
B. 1,2,and4only
C. 1,3,and4only
D. 2,3,and4only
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22.Whichstatementsaretrueaboutthe3rdEUDirectiveonMoneyLaunderingof2005?It
1. WasproposedinordertoupdateEuropeanCommunitylegislationinlinewiththerevisedFinancialActionTaskForce(FATF)40Recommendations.
2. LargelyreplicatesthedefinitionsincludedintheSecondDirective,includingthedefinitionofapoliticallyexposedperson.
3. RepeatsthemaincustomerduediligencerequirementsofthefirstandsecondDirectives,butaddsmoredetailtotherequirementsby,forexample,includingaspecificrequirementtoidentifythebeneficialownerifoneexistsandincludesongoingmonitoringrequirements.
4. Requiresfirmstoapplythecustomerduediligencerequirementstoexistingcustomersatappropriatetimesonarisksensitivebasis.
A. 1,2,and3only
B. 1,2,and4only
C. 1,3,and4only
D. 2,3,and4only
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PRACTICE QUESTIONS FOR CERTIFICATION EXAMINATION
23.TheFATF40Recommendationssaythatcountriesshould
A. Notallowbearersharesandlegalpersonsthatareabletoissuebearershares.
B. GatherstatisticsonSTRs;prosecutionsandconvictions;onpropertyfrozen,seizedandconfiscated;andonmutuallegalassistance,butnotnecessarilyonotherinternationalrequestsforco-operation.
C. Considerthefeasibilityofasystemwherebanksandotherfinancialinstitutionsandintermediarieswouldreportcurrencytransactionswithoutindicatingaminimumfixedamount.
D.Notapprovetheestablishmentoracceptthecontinuedoperationofshellbanks.
24.AmongthePrinciplesforInformationExchangeBetweenFinancialIntelligenceUnitsforMoneyLaunderingCases,issuedbytheEgmontGrouponJune13,2001,wefindwhichofthefollowing?
A. Information-sharingagreementsmustbedraftedaccordingtoamodelissuedbytheEgmontGroup.
B. Information-sharingagreementsshouldnotallowroomforcase-by-casesolutionstospecificproblemsincaseofNCCTcountries.
C. InformationexchangedbetweenFIUsmaybeusedonlyforthespecificpurposeforwhichtheinformationwassoughtorprovided.
D. TherequestingFIUmaymakeuseoftheinformationsharedbyadisclosingFIUforadministrativepurposeswithoutthepriorconsentofthedisclosingFIU.
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25. Inwhichstageofmoneylaunderingwouldyouclassifydepositingsmallamountsofcashintoseveralrelatedaccounts?
A. Integration
B. Structuring
C. Placement
D. Construction
26. Inwhichstageofmoneylaunderingwouldyouclassifythepurchaseoflaunderedfundsinhighvalueassetsandluxuryitems?
A. Integration
B. Structuring
C. Placement
D. Construction
27. Inmostlawscriminalizingmoneylaundering,itisstatedthat:
A. Financialinstitutionsarenotresponsibleformoneylaunderingorsuspicioustransactionstakingplacewithintheiraccountsuntilthegovernmentplacesthecustomeronawatchlist.
B. Tippingoff(tellingcustomersthattheiraccounts/transactionsareunderinvestigationbecauseofsuspicion)isnotpunishable.
C. Thedirtymoneyundergoingmoneylaunderingwillnotbeconfiscatedbecauseofprivacylaws.
D. Employeesoffinancialinstitutionwhointentionallyignoreclearsignsofmoneylaunderingmaybepunishedwithimprisonmentand/orfines.
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28. Thetacticinwhichindividualsmakemultipledepositsinsmallquantitiestoavoiddetectioniscalled:
A. Paralleling
B. Integration
C. Investing
D. Structuring
29. InwhichcasemightaSuspiciousTransactionReportNOTbenecessary?
A. Acustomerwhodepositsmoneyofsuspiciousoriginsandrefusestoanswerquestionsfromthefinancialinstitution’sstaff.
B. Acustomerwhotriestomovemoneythatissuspectedofbeingderivedfromcriminalactivity.
C. Acustomerwhoownsalargesupermarketanddepositslargeamountsofcashseveraltimesaday.
D. Acustomerwhoseaccountisshowingtransactionactivitieswhicharebeyondhisknownfinancialcapability.
30. Aspartoftheirroleinfightingmoneylaundering,financialinstitutionsshould:
A. Designateacomplianceofficer.
B. DependsolelyonTheState’sstaffforcombatingmoneylaundering.
C. Refusesmallcashdepositsunderthereportingthreshold.
D. Notopenaccountsforpeoplefromhighriskjurisdictions.
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31. Whatcouldhappentocomplianceofficersiftheydonotcomplywiththeanti-moneylaunderinglawsandregulations?
A. Theiremployerscouldfacereputationdamage,buttheemployeeisimmunefrompenalty.
B. Lossofjob,prisonpenaltiesandfines,negativereputationtoyouremployer,etc.
C. Nothing.Onlythefinancialinstitution’slegalcounselwillberesponsibleforcomplyingwithlaws.
D. Nothing.Onlythestaffdirectlyhandlingtransactionshavetoworry.
32. Whatiswillfulblindnessdefinedas?
A. FailingtofileaSuspiciousTransactionReportfordealingwithcompaniesorfinancialinstitutionsfromoffshoretaxhavens.
B. Notfollowingcustomeridentificationproceduresassetoutintheinstitution’sprocedures.
C. Deliberateavoidanceofknowledgeofthefactsorignoringobviousmoneylaunderingredflags.
D. Deliberateavoidanceofacustomerbasedontheassumptionthathisorherbehaviorsuggestedapotentialthreatasmoneylaundererand/orterrorist.
33. Inanti-moneylaunderingterminologya“redflag”is
A. Awarningsignusedtobringsattentiontopotentiallysuspicious,riskytransactionsoractivities.
B. Ageneralbankingtermusedoncethebalanceisnegative/overdue.
C. Thestandardflagofcountriesnotcooperativeinfightingmoneylaunderingandterroristfinancing.
D. Anindicatorthatacustomerislistedonaneconomicsanctionslist.
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34. TheReportingOfficerofafinancialinstitutionshould:
A. Reporteverythingthatcomeshiswayfromanyoneintheorganization.
B. ReporteverythingthatcomeshiswayfromtheCEO,MDorBoardofDirectors.
C. Reviewavailableinformationrelatedtothecustomer,transactions,profile,historyandfileaSuspiciousTransactionReportforonlythosecustomerswhereasuspicionofmoneylaunderingexists.
D. ReportonlywhattheReportingOfficer’ssuperioragreesshouldbereported.
35. Whichofthefollowingstatementsistrue?
A. Creditcardsarenotlikelytobeusedinthelayeringphaseofmoneylaunderingbecauseofrestrictionsincashpayments.
B. Creditcardsareeffectiveinstrumentsforlaunderingmoneybecausethetransactionsdonotcreateapapertrail.
C. Alaunderercanlaundermoneybyprepayinghiscreditcardusingfundsthatarealreadyinthebankingsystem,creatingacreditbalanceonhisaccount,andrequestingacreditrefund.
D. Alaunderercanuseillicitfundsthatarealreadyinthebankingsystemtopayhiscreditcardbillforgoodspurchased,whichisanexampleofplacement.
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36. WhyisaPayableThroughAccountvulnerabletomoneylaundering?
A. Thesearemastercorrespondentaccountsthatallowthecustomersoftheforeignbanktodoawiderangeoftransactions.
B. Thesearecorrespondentaccountslocatedinanon-cooperativecountryorterritory.
C. Thesearenestedcorrespondentaccountsataforeignshellbankwithcustomerswithwhomthedomesticbankdidnotexerciseduediligence.
D. Thesearemasterescrowaccountsonwhichadomesticbankgenerallydoesnotconductperiodicverification.
37. Whatisthereasoningbehindimplementinga“risk-basedanti-moneylaunderingapproach”?
A. Itwillkeeptheregulatorsfocusedonmoneylaunderingcontrolsinsectorsbeyondbanks.
B. Institutionscanbestdetectinstancesofmoneylaunderingbycustomerswherethemoneylaunderingrisksarehigh.
C. Aquantitativeapproachwillgeneratebetterresultsthanaqualitativeapproach.
D. Itallowstheinstitutiontofocusonsellingproductsthathaveabetterreturnoninvestment.
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38. AccordingtotheFATF40Recommendations,“Designatednon-financialbusinessesandprofessions”include
A. Casinos,realestateagentsanddealersinpreciousstones.
B. Moneyservicebusinesses,gatekeepers,andissuersofelectronicmoney.
C. Dealersinpreciousmetals,lawyers,commodityfuturestraders.
D. Lifeinsurancecompanies,realestateagentsandnotaries.
39. AccordingtotheFATF40Recommendations,thethresholdforidentifyingoccasionalcustomersatfinancialinstitutionsis
A. EURO/US$5,000
B. EURO/US$10,000
C. EURO/US$15,000
D. EURO/US$20,000
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40. TomworksasacomplianceofficeratABCBank.Heislookingatthetransactionsofoneofthebank’scustomers,Mr.Brown,theownerofacheckcashingcompany.Overthelastsixmonths,Mr.Brownhasnotmadewithdrawalsofcashagainstcheckdeposits.HealsodepositedtwochecksforUS$2,000eachthatwereissuedbyacasino.WhencheckingtheKYCfile,Tomseesthat,whenopeningtheaccount,Mr.Brownhadrequesteddetailedinformationaboutfeesandcommissionthatarechargedbythebank.WhatshouldarouseTom’ssuspicionthemost?Mr.Brown:
A. Depositedchecksfromcasinos.
B. Didnotmakewithdrawalsofcashagainstcheckdeposits.
C. Showeduncommoncuriosityaboutcommissionsandfeescharged.
D. Doesnothaveanescrowaccount.
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PRACTICE QUESTIONS FOR CERTIFICATION EXAMINATION
41. Asmallbroker-dealerhasanAMLcomplianceprogramthataddressesproceduresforfilingSuspiciousTransactionReportsandincludespolicies,proceduresandinternalcontrolsforcustomeridentification,monitoringaccountsandidentifyingmoneylaunderingredflags.EveryemployeeofthebrokerdealeristrainedviatheInternetinJanuaryandinJulyonAMLissues.TheboarddoesnottaketheInternettraining.Instead,thecomplianceofficerorganizesaluncheonforthemwhereanoutsidercomesinandtrainsthem.Theprogramprovidesfortheappointmentofacomplianceofficer,andonceayearthecomplianceofficerconductsanaudittotesttheprogram.Inwhatrespectdoestheprogramneedimprovement?
A. TheAMLprogramshouldbetestedbyanindependentperson,notthecomplianceofficer.
B. TheAMLprogramshouldbetestedmorethanonceperyear.
C. Newemployeesshouldbetrainedassoonastheystart,notjusttwiceayear.
D. EmployeesshouldnotbetrainedviatheInternet,becauseclassroomtrainingisbetter.
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42. SusanworksasaseniorMoneyLaunderingReportingOfficeratXYZBank.Sheistakingacloserlookattheactivityofseveralcustomers.WhatwouldarousehersuspiciontheMOST?
A. Acustomerwhoownsseveralcheckcashingcompaniesintownandrentssafedepositboxesatdifferentbranches.
B. Acustomerwhoavoidstakingvacations.
C. Asmallbusinessthatprovidesfinancialstatementswhicharenotpreparedbyanaccountant.
D. Acustomerinvolvedininvestmentmanagementwhoguaranteesaveryhighrateofreturn,wellabovewhatothercompetitorscanoffer.
43. Whichofthefollowingbestdescribesthe“alternativeremittancesystem”?
A. Thetransferofvaluesbetweencountries,outsideofthelegitimatebankingsystem.
B. Anon-electronicdataremittancesystemusedinseveralNCCTcountriestoreportsuspiciousactivities.
C. Old-fashionedreportingrequirementscommonlyusedinnon-cooperativecountriesandterritories.
D. Thetransferoffundsbetweentwoormorefinancialinstitutionsusingconcentrationaccounts.
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44. AnAMLcomplianceofficerwasreviewingcustomersatXYZBankandoneofthecustomers(Mr.SamTropicana)attractedherattention.ThroughaperiodofseveralmonthscashdepositsandwithdrawalsweretransactedthroughhisaccountwithamountsrangingbetweenUS$7,500andUS$17,000.Inaddition,Samdepositedtwochecks,issuedbyacasinointohisaccountforUS$32,000each.WhenopeningtheaccountSamstatedthatheoperatedforanImportandExportCompany.Whichofthefollowingadditionalitemsshouldarousethesuspicionofamoneylaunderingcomplianceofficerthemost?
A. Sammaintainedapersonalaccountaswellasthebusinessaccount.
B. Sam’shometelephonenumberwasdisconnectedlastmonth.
C. Samaskedforaletterofcredittofinancesomeimportsfromanewsupplier.
D. Samconductedlargecashtransactionscomparedtohisprofileasanimport/exportbusiness
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45. Whichofthefollowingstatementsaretrue?
A. Onlinegamblingprovidesanexcellentmethodoflaunderingbecausetransactionsareconductedprimarilythroughcreditordebitcardsandthesitesaretypicallyunregulatedoffshorefirms.
B. Aninstitutioncanknowwhenacreditcardisusedforonlinegamblingtransactionsbecausethecardsrelyoncodesthatillustratethetypeoftransactions.
C. Onlinegamblingprovidesanexcellentmethodoflaunderingbecauseitlendsitselftoanytypeofcashmovementandthereisnoface-to-facecontactwiththecustomer.
D. Somebanksdonolongerallowtheuseofcreditcardsforonlinegamblingtransactions.
A. 1,2and3
B. 2,3and4
C. 1,3and4
D. 1,2and4
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46. Whatarethethreekeygoalsofananti-moneylaunderingprogram?
A. Preventanddetectmoneylaunderingandterroristfinancing.Reportsuspiciousactivitytoproperauthoritiesifthelawsorregulationsrequireit.Trainallpertinentemployees.
B. Satisfyregulatoryrequirements.Reportsuspiciousactivitytoproperauthoritiesifthelawsorregulationsrequireit.Trainallpertinentemployees.
C. Trainallpertinentemployeesifthelawsrequireit.Preventmoneylaundering.Preventterroristfinancing.
D. Reduceregulatoryburdens.Helpthecourtsystemsinconvictingmoneylaunderers.Protecttheinstitution.
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47. Ananti-moneylaunderingspecialistisemployedbyalargebank.Theaccountowneriswell-knowntothespecialistandtheaccounthasbeenopenatthebankforseveralyears.Thespecialistnoticedthatfinancialinstrumentshavebeendepositedinasuspiciousmanneroverthelastfourmonths,leadinghimtofiletwoSuspiciousTransactionReports(STRs)ontheaccount.Recently,suspiciousactivityinvolvinghigh-riskcountrieshasbeendetectedoverthelastfewdays.
VariouslawenforcementagencieshavecalledtodiscusstheSTRswiththespecialist.Thespecialisthasaskedtheagentswhethertheythinktherelationshipwiththecustomershouldbeterminated.Theseagentsadvisedthatthisabusinessdecisionforthebanktomake.ThespecialisthaskeptthelegaladvisorsanduppermanagementapprisedoftheactivityandhaveprovidedthemcopiesoftheSTRs.
Whichofthefollowingshouldthespecialistrecommend?
A. Terminatetherelationshipwiththisaccountownerifpossible.
B. Monitortheaccountforcontinuedsuspiciousactivity.
C. Contacttheaccountowneragainaboutthenatureofsuspicioustransactions.
D. Seekguidancefromregulatorsregardingadecisiontoterminatetheaccount.
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PRACTICE QUESTIONS FOR CERTIFICATION EXAMINATION
48. TheFATFhasconsistentlynotedtheuseofcasinosinmoneylaunderingschemesinitsannualtypologiesreports.Somelaunderingtechniquesinvolvingcasinosinclude:
A. Askingforwinners’checkstobemadeoutinthenameofthirdpersonsorwithoutapayee.
B. Abusingcasinosbycircumventingitsgatekeepers.
C. Prepayingacasinotokenorchipbyusingfundsthatarealreadyinthecasinosystem,creatingadebitbalance.
D. Extensivegamblingviamultiplegamesthroughoutthecasino.
49. Whichofthefollowingshouldananti-moneylaunderingspecialistincludeonaninternalinvestigationlog?
A. Agovernmentorderonacustomerthatgarnisheshiswagesforfailuretopaychildsupport.
B. Supportingdocumentationandmaterialsfordenyingservicetoaclientwithabadcreditrating.
C. Notespertainingtoactivitythatisunusual,butforwhichaSuspiciousTransactionReporthasnotbeenfiled.
D. Referencetoamemorandumtothecompany’scorporatemanagementrelatingtobudgetaryandsimilarconcerns.
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50. WhatistheRightofReciprocityinthefieldofinternationalcooperationagainstmoneylaundering?
A. Thelegalprinciplethatfinancialinstitutionsthathavereferredcustomerstootherfinancialinstitutionscanshareinformationaboutthesecustomerswiththeotherinstitutions.
B. AruleoftheBaselCommitteeallowingproperlyregulatedfinancialinstitutesofanothermemberstateoftheBaselCommitteetodobusinesswithoutadditionalsupervisiontothedegreethattheotherstategrantsthesameright.
C. TherightofeachFATFmembercountrytodelegateprosecutionofacaseofmoneylaunderingtoanothermemberthatisalreadyinvestigatingthesamecase.
D. Ruleinthelawofacountryallowingitsauthoritiestocooperatewithauthoritiesofothercountriestothedegreethattheirlawallowsthemtodothesame.
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Answers
1. A
2. B
3. A
4. C
5. A
6. D
7. C
8. B
9. B
10. C
11. A
12. C
13. D
14. A
15. C
16. A
17. D
18. B
19. B
20. B
21. A
22. C
23. D
24. C
25. C
26. A
27. D
28. D
29. C
30. A
31. B
32. C
33. A
34. C
35. C
36. A
37. B
38. A
39. C
40. B
41. A
42. D
43. A
44. D
45. D
46. A
47. A
48. A
49. C
50. D
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