CISI IoI Anti-Money Laundering and Financial Crime 2

Question 1

Which of the following best describes a Politically Exposed Person (PEP) in AML terms?

Accepted Answer

An individual who holds or has held a prominent public function, considered higher risk due to potential for corruption

Answer

A client who has expressed strong political views in financial correspondence

Answer

A foreign national subject to additional tax reporting requirements under FATCA

Answer

Any client who is a registered member of a recognised political party

Question 2

In which circumstances is Enhanced Due Diligence (EDD) required under UK AML regulations?

Accepted Answer

For customers identified as higher risk, such as PEPs and those from high-risk third countries

Answer

For all new retail customers at account opening regardless of risk profile

Answer

Only for customers investing sums in excess of £1 million

Answer

Whenever a customer requests an international wire transfer

Question 3

What is 'smurfing' (also known as structuring) as used by money launderers?

Accepted Answer

Breaking large sums of money into smaller deposits to avoid transaction reporting thresholds

Answer

Using automated computer programs to conduct and disguise illegal financial transactions

Answer

Using multiple offshore accounts to conceal criminal proceeds across jurisdictions

Answer

Creating false invoices and commercial documentation to justify large payments

Question 4

What is the primary role of the UK Financial Intelligence Unit (UKFIU) in the AML framework?

Accepted Answer

Receiving, analysing, and disseminating financial intelligence derived from SARs submitted to the NCA

Answer

Acting as the FCA's enforcement division for financial crime cases

Answer

Setting AML policy on behalf of HM Treasury

Answer

Independently supervising AML compliance across all regulated sectors

Question 5

Which of the following is a placement technique rather than a layering technique in money laundering?

Accepted Answer

Depositing cash through a currency exchange bureau

Answer

Establishing a chain of shell companies across multiple jurisdictions

Answer

Using real estate transactions to move funds between parties

Answer

Conducting back-to-back loans to create apparent legitimate income

Question 6

Under the Money Laundering Regulations 2017, which of the following is NOT part of the regulated sector subject to AML obligations?

Accepted Answer

Supermarket chains

Answer

Estate agents

Answer

Accountants and tax advisers

Answer

High-value dealers selling goods above €10,000 in cash

Question 7

What is the maximum custodial sentence for a principal money laundering offence under the Proceeds of Crime Act 2002?

Accepted Answer

14 years

Answer

5 years

Answer

10 years

Answer

25 years