CFA AML & KYC Compliance 2

Question 1

Under the Bank Secrecy Act, what is the threshold for filing a Currency Transaction Report (CTR)?

Accepted Answer

$10,000

Answer

The BSA requires financial institutions to file a CTR for cash transactions exceeding $10,000 in a single business day.

Question 2

Which practice involves breaking up large cash deposits into smaller amounts to avoid CTR reporting thresholds?

Accepted Answer

Smurfing

Answer

Smurfing (also called structuring) is the illegal act of splitting large cash transactions into smaller ones to evade reporting requirements.

Question 3

What does 'Enhanced Due Diligence' (EDD) primarily apply to?

Accepted Answer

High-risk customers and Politically Exposed Persons

Answer

EDD is a deeper level of scrutiny applied to higher-risk customers, including PEPs and those from high-risk jurisdictions.

Question 4

A Suspicious Activity Report (SAR) must generally be filed within how many days of detecting suspicious activity?

Accepted Answer

30 days

Answer

SARs must be filed within 30 calendar days of the date the suspicious activity is initially detected.

Question 5

Which FATF recommendation specifically addresses the risk-based approach to AML/CFT?

Accepted Answer

Recommendation 1

Answer

FATF Recommendation 1 requires countries and financial institutions to apply a risk-based approach to AML/CFT measures.

CFA Practice Test