CPP International Payments & Cross-Border Transactions 2

Question 1

What is the key difference between the SHA, OUR, and BEN cost-sharing options in international wire transfers?

Accepted Answer

They dictate which party (sender, recipient, or both) pays the transaction fees

Answer

They determine the speed of the transfer

Answer

They specify the SWIFT message type to be used

Answer

They determine the correspondent bank routing path

Question 2

What is the purpose of ISO 20022 in the context of international payments?

Accepted Answer

To provide a universal financial messaging standard that enables richer, more structured payment data

Answer

To set global interest rate standards for cross-border loans

Answer

To establish a single global currency for international trade

Answer

To regulate foreign exchange markets

Question 3

Which of the following best describes the 'lifting fee' in an international payment?

Accepted Answer

A fee charged by an intermediary or correspondent bank for processing the transfer

Answer

A regulatory compliance fee charged by the central bank

Answer

A surcharge applied for same-day international settlement

Answer

A fee for converting physical currency at a foreign branch

Question 4

What is the primary purpose of Know Your Customer (KYC) requirements in cross-border payments?

Accepted Answer

To verify the identity of clients and assess their risk profile to prevent financial crimes

Answer

To speed up the processing of international transfers

Answer

To negotiate favorable foreign exchange rates for customers

Answer

To determine the optimal correspondent bank network for a transfer

Question 5

Which payment system is used for high-value U.S. dollar transactions that often serve as the settlement leg for international payments?

Accepted Answer

CHIPS

Answer

ACH

Answer

Nacha

Answer

EFT

Question 6

What does the term 'nostro account' refer to in international banking?

Accepted Answer

A foreign currency account held by a domestic bank at a foreign correspondent bank

Answer

An account used exclusively for SWIFT messaging fees

Answer

A reserve account maintained at the central bank for foreign exchange

Answer

A shared account used by multiple banks for settlement purposes

Question 7

Under FATF Recommendation 16 (the 'Travel Rule'), what information must accompany cross-border wire transfers?

Accepted Answer

Originator and beneficiary identification information including names and account numbers

Answer

The foreign exchange rate used for the conversion

Answer

The SWIFT routing path through all correspondent banks

Answer

The purpose of payment and supporting trade documentation