CMFAS Anti-Money Laundering 4

Question 1

What are the red flags for potential money laundering?

Accepted Answer

Unusual transaction patterns, reluctance to provide information, and use of shell companies

Answer

Red flags include unusual or inconsistent transaction patterns, reluctance to provide identification, use of shell companies, and transactions with no apparent economic purpose.

Question 2

What is a shell company in the context of money laundering?

Accepted Answer

A company with no significant assets or operations used to disguise the source of funds

Answer

A shell company has no significant operations, assets, or employees but exists on paper. It can be used to hide the true ownership or source of funds.

Question 3

What is the 'travel rule' in AML regulations?

Accepted Answer

Requirements to share originator and beneficiary information in cross-border wire transfers

Answer

The travel rule requires financial institutions to include and transmit originator and beneficiary information with cross-border wire transfers for traceability.

Question 4

What is the role of the Money Laundering Reporting Officer (MLRO)?

Accepted Answer

To oversee the AML programme and handle suspicious transaction reporting

Answer

The MLRO is responsible for overseeing the institution's AML compliance programme, receiving internal suspicious reports, and filing STRs with STRO.

Question 5

What is beneficial ownership?

Accepted Answer

The natural person(s) who ultimately own or control a legal entity

Answer

The beneficial owner is the natural person who ultimately owns or controls a customer entity, or on whose behalf a transaction is conducted, even if the legal ownership is in another name.

CMFAS Practice Test

CMFAS Practice Test

CMFAS Anti-Money Laundering 4