Banking Exam Anti-Money Laundering Compliance 5

Question 1

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:

Accepted Answer

Use additional identity verification methods to resolve the discrepancy

Answer

CIP requires institutions to use additional methods, such as documentary or non-documentary verification, to resolve discrepancies in customer identity information.

Question 2

Which of the following is a core pillar of an effective BSA/AML compliance program?

Accepted Answer

Designation of a BSA compliance officer

Answer

Federal regulations require financial institutions to designate a BSA/AML compliance officer responsible for day-to-day oversight of the AML program.

Question 3

Trade-based money laundering (TBML) most commonly involves:

Accepted Answer

Over- or under-invoicing goods in international trade transactions

Answer

TBML exploits the complexity of international trade by manipulating invoice prices, quantities, or quality of goods to transfer value across borders.

Question 4

When a financial institution files a SAR, who should generally NOT be informed of the filing?

Accepted Answer

The subject of the SAR

Answer

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.

Question 5

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:

Accepted Answer

Potential layering activity using a shell entity

Answer

Shell companies with opaque ownership structures are commonly used in the layering stage to obscure the origin of illicit funds through complex ownership chains.

Banking Exam Practice Test

Banking Exam Practice Test

Banking Exam Anti-Money Laundering Compliance 5