CFE Money Laundering 2

Question 1

Which international body sets global AML/CFT standards and issues the Forty Recommendations on money laundering?

Accepted Answer

The Financial Action Task Force (FATF)

Answer

The United Nations Office on Drugs and Crime (UNODC)

Answer

The Basel Committee on Banking Supervision

Answer

Interpol

Question 2

Which of the following is considered a 'red flag' indicator of potential money laundering?

Accepted Answer

A customer who is reluctant to provide information about the source of funds

Answer

A customer who provides full identification and opens one account

Answer

A business that consistently reports small but steady profits

Answer

A customer who requests information about interest rates before depositing

Question 3

The primary anti-money laundering legislation in the United States that requires financial institutions to assist government agencies in detecting and preventing money laundering is the:

Accepted Answer

Bank Secrecy Act (BSA)

Answer

Patriot Act

Answer

Foreign Corrupt Practices Act (FCPA)

Answer

Sarbanes-Oxley Act (SOX)

Question 4

Know Your Customer (KYC) programs at financial institutions are primarily designed to:

Accepted Answer

Verify customer identity and assess the risk of illicit financial activity

Answer

Maximize profit from high-net-worth clients

Answer

Track customer spending patterns for marketing purposes

Answer

Ensure compliance with consumer protection laws

Question 5

Which term describes the use of cash-intensive businesses (such as car washes or restaurants) to mix criminal proceeds with legitimate revenue?

Accepted Answer

Commingling

Answer

Smurfing

Answer

Layering

Answer

Round-tripping

Question 6

Under the USA PATRIOT Act, financial institutions are required to implement Customer Identification Programs (CIPs). At minimum, CIPs must collect which of the following for individual customers?

Accepted Answer

Name, date of birth, address, and identification number

Answer

Name, employer, income, and tax returns

Answer

Name, address, credit score, and employment history

Answer

Name, social media profiles, references, and investment history

Question 7

A 'shell company' is most commonly used in money laundering schemes to:

Accepted Answer

Conceal the true ownership and origin of funds through complex corporate layers

Answer

Provide legitimate payroll services to employees

Answer

Obtain government contracts through competitive bidding

Answer

Facilitate legitimate cross-border trade transactions