practice questions for certification examination d -...

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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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Study Guide for the CAMS Certification Examination

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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PRACTICE QUESTIONS FOR CERTIFICATION EXAMINATION

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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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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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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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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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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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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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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practice questions for certification examination d -...

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