CCB Financial Crime Prevention 2 — Questions and Answers
Question 1: Which typology involves layering illicit funds through multiple shell companies across different jurisdictions to obscure their origin?
- Smurfing
- Structuring
- Round-tripping
- Corporate layering (Correct answer)
Correct answer: Corporate layering
Corporate layering uses a web of shell companies in multiple jurisdictions to make tracing illicit funds extremely difficult.
Question 2: Under the Bank Secrecy Act (BSA), what is the minimum threshold that triggers a Currency Transaction Report (CTR)?
- $5,000
- $10,000 (Correct answer)
- $25,000
- $50,000
Correct answer: $10,000
The BSA requires financial institutions to file a CTR for cash transactions exceeding $10,000 in a single business day.
Question 3: A customer purchases multiple cashier's checks each under $10,000 on the same day to avoid CTR filing. This is known as:
- Smurfing
- Structuring (Correct answer)
- Placement
- Integration
Correct answer: Structuring
Structuring (also called 'smurfing' when multiple people are used) refers to breaking up transactions specifically to evade CTR reporting thresholds.
Question 4: Which international body sets global standards for anti-money laundering and combating the financing of terrorism (AML/CFT)?
- IMF
- World Bank
- FATF (Correct answer)
- BIS
Correct answer: FATF
The Financial Action Task Force (FATF) is the global standard-setter for AML/CFT policies and issues its Forty Recommendations.
Question 5: In the context of trade-based money laundering (TBML), which scheme involves deliberately mis-stating the price of goods on invoices?
- Over/under-invoicing (Correct answer)
- Loan-back scheme
- Real estate laundering
- Currency exchange fraud
Correct answer: Over/under-invoicing
Over/under-invoicing is a TBML technique where the stated price differs from the true market value to transfer value across borders.
Question 6: Which stage of money laundering involves making illicit funds appear to come from a legitimate source such as a business or investment?
- Placement
- Layering
- Integration (Correct answer)
- Structuring
Correct answer: Integration
Integration is the final stage where laundered funds are reintroduced into the legitimate economy and appear to come from lawful sources.
Question 7: A compliance officer identifies a customer whose account shows frequent large cash deposits followed by immediate wire transfers to high-risk jurisdictions. The BEST immediate action is to:
- Close the account immediately
- File a SAR and continue monitoring (Correct answer)
- Notify the customer of the suspicious activity
- Increase transaction limits to reduce suspicion
Correct answer: File a SAR and continue monitoring
Filing a SAR with FinCEN and continuing to monitor is the correct response; tipping off the customer violates anti-tipping provisions.
CCB Financial Crime Prevention 2
Which typology involves layering illicit funds through multiple shell companies across different jurisdictions to obscure their origin?