General Practice Flashcards
7 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 7 General Practice flashcards as text
A customer frequently exchanges small-denomination bills for large-denomination bills at a bank branch with no apparent business reason. This behavior most likely indicates which money laundering stage?
Answer: Placement
Exchanging small bills for large denominations is a classic placement technique used to consolidate physically bulky criminal cash proceeds.
Under the USA PATRIOT Act Section 312, enhanced due diligence is required for correspondent accounts maintained for which type of foreign institution?
Answer: Foreign shell banks and banks in jurisdictions of primary money laundering concern
Section 312 requires enhanced due diligence for correspondent accounts of foreign shell banks and banks in jurisdictions identified as primary money laundering concerns.
What is the significance of the 'tipping off' prohibition in AML regulations?
Answer: It prevents institutions from disclosing to subjects that a SAR has been or may be filed against them
The tipping off prohibition makes it illegal to inform a customer or suspect that they are the subject of a SAR filing or related investigation.
Which of the following is an example of a high-risk business type that requires enhanced AML scrutiny?
Answer: A money services business (MSB) offering check cashing and wire transfers
MSBs handle high volumes of cash transactions and can be exploited for money laundering, making them inherently high-risk and subject to enhanced scrutiny.
During an AML audit, the auditor notes that the compliance officer has been approving their own suspicious activity determinations. This represents a failure of which internal control principle?
Answer: Dual control and segregation of duties
Self-approval violates segregation of duties, a core internal control requiring that different individuals perform and approve significant compliance decisions.
What does 'de-risking' refer to in the context of financial institutions?
Answer: Exiting relationships or products perceived as high-risk without conducting individual customer assessments
De-risking is when financial institutions terminate entire customer categories rather than conducting individual risk assessments, which can unintentionally exclude legitimate customers.
Which typology involves using third parties to purchase monetary instruments on behalf of another person to avoid identification?
Answer: Structuring with the use of nominees or 'smurfs'
Using nominees or smurfs involves recruiting individuals to conduct transactions below reporting thresholds to conceal the identity of the actual owner of funds.