CFS Money Laundering & AML Compliance 3

Question 1

Under the USA PATRIOT Act, financial institutions are required to share information with each other about suspected money launderers under which provision?

Accepted Answer

Section 314(b)

Answer

Section 314(b) allows financial institutions that opt in to voluntarily share information with each other about suspected money laundering or terrorist financing.

Question 2

Which international body issues the global anti-money laundering standards known as the '40 Recommendations'?

Accepted Answer

FATF (Financial Action Task Force)

Answer

The Financial Action Task Force (FATF) is the intergovernmental body that develops and promotes the 40 Recommendations as the global AML/CFT standard.

Question 3

A drug trafficking organization uses a chain of legitimate restaurants to mix drug proceeds with lawful restaurant revenues before reporting it as business income. This technique primarily exploits which money laundering stage?

Accepted Answer

Placement through commingling

Answer

Commingling illegal proceeds with legitimate business revenues is a placement technique that makes the illicit funds appear to be lawful income.

Question 4

A Politically Exposed Person (PEP) is best defined as:

Accepted Answer

An individual entrusted with a prominent public function and their close associates

Answer

PEPs are individuals who hold or have held prominent public positions — such as heads of state, senior politicians, or military officers — and pose higher corruption and bribery risks.

Question 5

Which AML control involves monitoring transactions against a list of sanctioned individuals, entities, and countries in real time?

Accepted Answer

OFAC screening

Answer

OFAC (Office of Foreign Assets Control) screening checks transactions and customers against the SDN list and other sanctions lists to prevent prohibited dealings.

(CFS) Certified Fraud Specialist Practice Test

(CFS) Certified Fraud Specialist Practice Test

CFS Money Laundering & AML Compliance 3