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Anti-Money Laundering Compliance Flashcards

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  1. The USA PATRIOT Act Section 326 requires financial institutions to implement which specific program?

    Answer: Customer Identification Program (CIP)

    Section 326 of the USA PATRIOT Act mandates that financial institutions establish a Customer Identification Program (CIP) to verify customer identities.

  2. When must Enhanced Due Diligence (EDD) be applied to a customer?

    Answer: When a customer presents a higher risk of money laundering

    EDD is required for higher-risk customers, such as PEPs, customers from high-risk jurisdictions, or those with complex or unusual transaction patterns.

  3. A bank employee discovers that a colleague helped a customer structure deposits to avoid CTR filing. The employee should FIRST:

    Answer: Report internally through established compliance channels

    The employee should follow the institution's established internal reporting procedures, typically by notifying the BSA/AML compliance officer.

  4. What is the minimum dollar threshold for filing a Currency Transaction Report (CTR)?

    Answer: $10,000

    Financial institutions must file a CTR for cash transactions exceeding $10,000 in a single business day, including multiple transactions by the same person.

  5. Which country risk factor would MOST likely trigger enhanced due diligence?

    Answer: The customer sends wire transfers to a FATF blacklisted jurisdiction

    Transactions involving FATF blacklisted or high-risk jurisdictions require enhanced scrutiny due to significant AML/CFT deficiencies in those countries.

  6. What does 'tipping off' refer to in AML compliance?

    Answer: Notifying a subject that a SAR has been or may be filed about them

    Tipping off is the illegal act of notifying a person that they are the subject of a SAR filing or AML investigation, which is prohibited under BSA.

  7. Under FinCEN's CDD Final Rule effective 2018, covered financial institutions must identify beneficial owners who own what minimum percentage of a legal entity customer?

    Answer: 25%

    The CDD Final Rule requires identification of all individuals who own 25% or more of a legal entity customer, plus one individual with significant managerial control.