AML/CFT Risk and Methods Flashcards
6 cards from real ACAMS practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 AML/CFT Risk and Methods flashcards as text
Which money laundering method involves purchasing multiple monetary instruments in amounts just below the Currency Transaction Report (CTR) threshold?
Answer: Structuring
Structuring (also known as 'smurfing') involves breaking up large cash transactions into smaller amounts specifically to avoid triggering CTR filing requirements. It is a federal crime under the Bank Secrecy Act.
In the context of AML, what does 'layering' primarily aim to achieve?
Answer: Disguising the audit trail between illicit funds and their source
Layering is the second stage of money laundering, designed to create a complex web of financial transactions that obscures the audit trail and makes tracing funds back to their criminal origin extremely difficult.
Which of the following is a key red flag indicating potential money laundering through real estate?
Answer: Property is purchased with all-cash from a shell company with no apparent business purpose
All-cash purchases through opaque shell companies are a classic real estate money laundering indicator, as they allow criminals to obscure the true beneficial owner and inject illicit funds without bank scrutiny.
What is 'trade-based money laundering' (TBML)?
Answer: Exploiting international trade transactions to disguise money laundering
TBML involves manipulating international trade transactions — such as over- or under-invoicing goods and services — to transfer value across borders and disguise the proceeds of crime.
Which term describes the use of multiple financial institutions or accounts to conceal the source of illicit funds?
Answer: Cuckoo smurfing
Cuckoo smurfing is a technique where criminal proceeds are substituted for legitimate funds in cross-border transactions, so the money launderer's funds reach their destination while the legitimate customer's account appears to receive a normal transfer.
Which AML risk factor is most associated with professional money laundering networks (PMLNs)?
Answer: Use of gatekeepers such as lawyers, accountants, and company formation agents
Professional money laundering networks frequently exploit gatekeepers — professionals such as lawyers, accountants, and corporate service providers — who can create complex corporate structures and move funds while providing a veneer of legitimacy.