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Anti-Money Laundering and Financial Crimes Flashcards

6 cards from real CCO practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 6 Anti-Money Laundering and Financial Crimes flashcards as text

  1. What is the Financial Action Task Force (FATF)?

    Answer: An intergovernmental body that sets international AML and counter-terrorist financing standards

    FATF is the global standard-setter for anti-money laundering and counter-terrorist financing policies, whose recommendations countries are expected to implement.

  2. What is beneficial ownership in AML compliance?

    Answer: The natural person(s) who ultimately own or control a legal entity, even if ownership is indirect

    Beneficial ownership identifies the real human beings who ultimately own or control a company, preventing criminals from hiding behind shell companies.

  3. Under FinCEN's Customer Due Diligence rule, covered financial institutions must identify beneficial owners holding what percentage or more of a legal entity?

    Answer: 25%

    FinCEN's CDD rule requires identifying all beneficial owners holding 25% or more equity in a legal entity customer.

  4. What is terrorist financing and how does it differ from money laundering?

    Answer: Terrorist financing funds violent acts and can involve legitimate money moved for criminal purposes, while money laundering conceals illegally obtained funds

    While money laundering cleans dirty money, terrorist financing can involve clean money being directed to fund illegal violent activities.

  5. What is the role of an AML compliance officer?

    Answer: To oversee the AML program, ensure regulatory compliance, conduct training, and act as liaison with regulators and law enforcement

    The AML compliance officer is responsible for designing, implementing, and overseeing the institution's AML program and regulatory obligations.

  6. What is a 'red flag' in AML monitoring?

    Answer: An indicator of potentially suspicious activity that warrants further review

    Red flags are warning signs — such as unusual transaction patterns, inconsistent customer behavior, or involvement with high-risk jurisdictions — that trigger further AML review.