Banking Exam Anti-Money Laundering Compliance 3

Question 1

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

Accepted Answer

Customer Identification Program (CIP)

Answer

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

Question 2

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

Accepted Answer

When a customer presents a higher risk of money laundering

Answer

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

Question 3

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

Accepted Answer

Report internally through established compliance channels

Answer

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

Question 4

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

Accepted Answer

$10,000

Answer

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

Question 5

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

Accepted Answer

The customer sends wire transfers to a FATF blacklisted jurisdiction

Answer

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

Banking Exam Practice Test

Banking Exam Practice Test

Banking Exam Anti-Money Laundering Compliance 3