ACAMS - Association of Certified Anti-Money Laundering Specialists International AML/CFT Standards Questions and Answers 1

Question 1

According to the FATF 40 Recommendations, the cornerstone of an effective AML/CFT system, which allows for the flexible and efficient allocation of resources, is known as what?

Accepted Answer

The Risk-Based Approach (RBA)

Answer

FATF Recommendation 1 explicitly calls for countries and financial institutions to identify, assess, and understand their money laundering and terrorist financing risks and apply a corresponding set of AML/CFT measures. This is the definition of the Risk-Based Approach (RBA), which is considered the foundation for the effective implementation of all other FATF Recommendations.

Question 2

A global bank is conducting its annual review of its correspondent banking relationships. To align with international best practices for collecting due diligence information, which standardized tool, developed by a major industry group, would be most appropriate to use?

Accepted Answer

The Wolfsberg Group's Correspondent Banking Due Diligence Questionnaire (CBDDQ)

Answer

The Wolfsberg Group, an association of global financial institutions, developed the Correspondent Banking Due Diligence Questionnaire (CBDDQ) to provide a standardized, reasonable, and enhanced due diligence tool for correspondent banking relationships. It is considered a global standard for managing financial crime risks in this area.

Question 3

Which of the following situations would mandate a financial institution to conduct customer due diligence (CDD) measures, according to FATF Recommendation 10?

Accepted Answer

When there is a suspicion of money laundering, regardless of any transaction threshold.

Answer

FATF Recommendation 10 states that CDD must be performed in several circumstances, including: when establishing business relations; when carrying out occasional transactions above the designated threshold; when there is a suspicion of money laundering or terrorist financing; or when the institution has doubts about the veracity of previously obtained customer identification data. A suspicion of ML/TF triggers the CDD requirement irrespective of any threshold.

Question 4

A country is undergoing an assessment by FATF to evaluate the implementation and effectiveness of its AML/CFT measures against the 40 Recommendations. This peer review process is officially known as a:

Accepted Answer

Mutual Evaluation

Answer

The FATF assesses its members' compliance with the international AML/CFT standards through a peer review process called a Mutual Evaluation. These in-depth country reports analyze both technical compliance (laws and regulations in place) and the effectiveness of the country's AML/CFT system.

Question 5

A compliance officer at a bank identifies a new client from a jurisdiction publicly identified by the FATF as having strategic AML/CFT deficiencies. According to international standards, which of the following actions is most appropriate?

Accepted Answer

Apply enhanced due diligence measures to the business relationship.

Answer

FATF standards require financial institutions to apply enhanced due diligence (EDD) measures to business relationships and transactions with persons and entities from countries for which this is called for by the FATF, such as those with identified strategic deficiencies. This involves gaining a deeper understanding of the customer and their transactions to mitigate the heightened risk.

(ACAMS) Association of Certified Anti-Money Laundering Specialists Practice Test

(ACAMS) Association of Certified Anti-Money Laundering Specialists Practice Test

ACAMS - Association of Certified Anti-Money Laundering Specialists International AML/CFT Standards Questions and Answers 1