Banking Anti-Money Laundering 3 ā Questions and Answers
Question 1: A Suspicious Activity Report (SAR) must be filed within how many calendar days after a suspicious transaction is initially detected?
- 15 days
- 30 days (Correct answer)
- 60 days
- 90 days
Correct answer: 30 days
Banks must file a SAR within 30 calendar days of initial detection, with an extension to 60 days if no suspect is identified.
Question 2: Which of the following scenarios would most likely require a bank to file a SAR?
- A customer requesting a wire transfer to a domestic account
- A long-standing customer depositing a payroll check
- A new customer depositing $50,000 cash with no plausible business explanation (Correct answer)
- A customer making a $15,000 cash deposit with a business license
Correct answer: A new customer depositing $50,000 cash with no plausible business explanation
Large cash deposits from new customers with no clear legitimate business purpose are classic red flags that warrant SAR filing.
Question 3: The 'tipping off' prohibition in AML law means that a bank employee must NOT:
- File a SAR without supervisory approval
- Inform the subject of a SAR that a report has been filed (Correct answer)
- Share SAR information with correspondent banks
- Conduct enhanced due diligence on high-risk customers
Correct answer: Inform the subject of a SAR that a report has been filed
Tipping off is illegal; disclosing to a subject that a SAR has been filed or that an investigation is underway can result in criminal penalties.
Question 4: Which of the following is a key component of a bank's required AML/BSA compliance program?
- Quarterly audits conducted by the bank's marketing department
- Designation of a compliance officer responsible for BSA/AML (Correct answer)
- Monthly board approval of all wire transfers over $10,000
- Mandatory customer credit score reviews
Correct answer: Designation of a compliance officer responsible for BSA/AML
Federal regulations require every bank to designate a qualified BSA/AML compliance officer as one of the four pillars of a compliant program.
Question 5: What is 'trade-based money laundering' (TBML)?
- Using stock market trades to obscure illicit funds
- Manipulating international trade transactions to transfer value across borders (Correct answer)
- Trading foreign currencies at non-market rates to launder money
- Falsifying commodity futures contracts
Correct answer: Manipulating international trade transactions to transfer value across borders
TBML involves manipulating international trade documentsāsuch as over- or under-invoicingāto move value across borders disguised as legitimate trade.
Question 6: Which list must U.S. banks screen customers against as part of OFAC compliance?
- FBI Most Wanted List
- Specially Designated Nationals (SDN) List (Correct answer)
- FinCEN 314(a) Requestee List
- Interpol Red Notice List
Correct answer: Specially Designated Nationals (SDN) List
OFAC's SDN List identifies individuals, companies, and countries with whom U.S. persons are prohibited from doing business.
Question 7: Under Section 314(b) of the USA PATRIOT Act, financial institutions may voluntarily share information about suspected money launderers with whom?
- The general public
- Foreign governments
- Other financial institutions registered with FinCEN (Correct answer)
- State banking regulators only
Correct answer: Other financial institutions registered with FinCEN
Section 314(b) allows registered financial institutions to share information with one another to identify and report potential money laundering or terrorist financing.
Banking Anti-Money Laundering 3
A Suspicious Activity Report (SAR) must be filed within how many calendar days after a suspicious transaction is initially detected?