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
A customer presents a valid government ID but the address does not match records in a credit bureau database. Under CIP requirements, the bank should:
Answer: Use additional identity verification methods to resolve the discrepancy
CIP requires institutions to use additional methods, such as documentary or non-documentary verification, to resolve discrepancies in customer identity information.
Which of the following is a core pillar of an effective BSA/AML compliance program?
Answer: Designation of a BSA compliance officer
Federal regulations require financial institutions to designate a BSA/AML compliance officer responsible for day-to-day oversight of the AML program.
Trade-based money laundering (TBML) most commonly involves:
Answer: Over- or under-invoicing goods in international trade transactions
TBML exploits the complexity of international trade by manipulating invoice prices, quantities, or quality of goods to transfer value across borders.
When a financial institution files a SAR, who should generally NOT be informed of the filing?
Answer: The subject of the SAR
Informing the SAR subject that a report has been or may be filed is the prohibited act of 'tipping off,' which is a federal violation under the BSA.
A shell company with no employees, no physical office, and no clear business operations requests a wire transfer to a high-risk country. This is primarily a red flag for:
Answer: Potential layering activity using a shell entity
Shell companies with opaque ownership structures are commonly used in the layering stage to obscure the origin of illicit funds through complex ownership chains.
What does 'de-risking' mean in the context of AML compliance?
Answer: Financial institutions exiting entire customer segments to avoid AML risk
De-risking occurs when financial institutions terminate or restrict relationships with entire customer categories (e.g., MSBs, foreign banks) rather than managing risk on a case-by-case basis.
Under FinCEN's geographic targeting orders (GTOs), all-cash real estate purchases above a set threshold in covered jurisdictions require disclosure of:
Answer: The beneficial owner of the purchasing entity
GTOs require title insurance companies to identify the natural person(s) who are the beneficial owners behind shell companies making all-cash real estate purchases.