Practice Test GeeksBanking Exam Practice Test
← All Banking Exam Flashcard Decks

Anti-Money Laundering Compliance Flashcards

7 cards from real Banking Exam practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Anti-Money Laundering Compliance flashcards as text

  1. A real estate company receives cash payments for property purchases without reporting to a financial institution. Which AML stage does this most represent?

    Answer: Placement

    Placement is the first stage of money laundering, where illegal cash is introduced into the financial system or used to purchase assets.

  2. What is the primary purpose of a financial institution's AML risk assessment?

    Answer: To identify, measure, and mitigate the institution's money laundering exposure

    An AML risk assessment identifies an institution's specific money laundering and terrorist financing risks to allocate compliance resources appropriately.

  3. Which of the following best describes 'integration' in the money laundering process?

    Answer: Re-introducing laundered funds into the legitimate economy

    Integration is the final stage where laundered funds re-enter the legitimate economy appearing as normal business income or assets.

  4. An MSB (Money Services Business) customer wants to open a business account. Compared to a typical retail customer, the bank should apply:

    Answer: Enhanced due diligence due to elevated risk

    MSBs are considered higher-risk customers by regulators because they handle large volumes of cash and are frequently targeted by money launderers.

  5. Which of the following transactions would most likely require a SAR filing?

    Answer: A customer wires $500,000 to an account with no apparent business purpose

    A large wire transfer with no apparent business purpose is a classic SAR trigger due to its unusual nature and potential for hiding illicit fund movement.

  6. Under BSA, how long must financial institutions retain records of CTRs and SARs?

    Answer: 5 years

    BSA requires financial institutions to retain CTRs, SARs, and related records for five years from the date of filing.

  7. What is the key difference between a SAR and a CTR?

    Answer: CTRs are mandatory for large cash transactions; SARs are filed when activity is deemed suspicious

    CTRs are mandatory filings for cash transactions over $10,000, while SARs are filed when a financial institution identifies activity it suspects involves money laundering or other financial crimes.