FREE CAMS Transaction Monitoring Questions and Answers
Which of the following is a reasonable purpose of the Final Rule that the New York State Department of Financial Services (DFS) published, requiring regulated institutions to have "Transaction Monitoring and Filtering Programs"?
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A Final Rule released by the New York State Department of Financial Services (DFS) mandates that regulated institutions keep up "Transaction Monitoring and Filtering Programs" that are logically intended to:
(i) keep an eye on transactions to ensure they comply with anti-money laundering (AML) laws and regulations, such as those pertaining to reporting suspicious behavior, and the Bank Secrecy Act (BSA).
(ii) stop illicit transactions with entities that are the focus of economic sanctions enforced by the Office of Foreign Assets Control (OFAC) of the US Treasury Department.
Which of the following measures to integrate RDC processing into other controls must be performed in order to control the risks related to RDC?
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Integration of RDC processing with other controls, such monitoring and fraud detection systems, is necessary to reduce the risks related to RDC. It is imperative that any new product a bank offers undergo this integration.
Which of these describes an integration transaction in the cycle of money laundering?
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Typical integration transaction examples are as follows:
Acquiring luxury items such as real estate, fine jewelry, artwork, or expensive cars
Making agreements on money
entering other markets where money can be invested in commercial projects
Which of the following PEPs' suspicious actions is causing issues for many financial institutions?
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PEPs have caused issues for a number of financial institutions, as the following cases show.
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‥ The US Drug Enforcement Agency (DEA) claims that Mario Villanueva, the dishonest governor of Quintana Roo, Mexico, helped smuggle 200 tons of cocaine into the United States. He kept personal bank accounts at Lehman Brothers for five years, until 2001. The accounts included about $20 million, which the DEA claimed he had accepted as payments from Mexican drug traffickers.
‥ The Riggs Bank case exposed a network of hundreds of millions of dollar transactions that the bank had long supported for dictators on two continents, namely Teodoro Obiang of Equatorial Guinea and Augusto Pinochet of Chile. For many years, the bank's specialized product, embassy banking, included the accounts in its portfolio.
‥ The Bank of New York in New York City provided accounts for Vladimiro Montesinos, the former head of Peru's Intelligence Service and key counselor to former Peruvian President Alberto Fujimori. The bank stored the revenues from substantial bribes from drug traffickers. Montesinos also had accounts with a number of other organizations in New York, including American Express Bank International, Bank of America, Barclays, and UBS AG. Additionally, he helped trade in drugs, weapons, embezzlement, and money laundering totaling over $400 million worldwide by using shell corporations.
‥ Former Nicaraguan president Arnoldo Aleman and tax commissioner Byron Jerez had accounts at Terrabank N.A. in Miami, through which they purportedly used the proceeds of corruption to purchase condominiums in South Florida and certificates of deposit for millions of dollars.
P.S. Having numerous businesses across the globe does not necessarily indicate questionable behavior.
PS. In the commercial world, using import or export lines facilities is a routine practice and is not considered suspicious.
Which of the following memos advises prosecutors to concentrate on the people who actually committed the wrongdoing while conducting criminal and civil investigations into corporate misconduct?
The so-called Yates Memo serves as a reminder to prosecutors that the people who committed the offense should be the focus of both criminal and civil investigations into business misbehavior.
PS. Yates Memo's purpose was to give executive prosecution for corporate crimes a priority.
Which of the following best describes the definition of money laundering included in the United Nations 2000 Convention Against Transnational Organized Crime, also known as the "Palermo Convention"?
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The 2000 Convention on Transnational Organized Crime of the United Nations, commonly referred to as the
Money laundering is defined by the "Palermo Convention" as:
‥ Converting or transferring property knowing it comes from a criminal offense in order to hide or mask its illegal origins, or helping anyone involved in the crime to avoid facing legal repercussions for their actions.
‥ The act of hiding or disguising the actual characteristics, origin, location, use, rights pertaining to, or ownership of property while being aware that it is the result of illegal activity.
‥ The purchase, holding, or use of property with knowledge at the time of acquisition that it was obtained by criminal activity or involvement in criminal activity.
There would be certain requirements for a person holding a (Payable-Through-Account) PTA in the names of respondent banks. Of the following, which would you consider to be one of them?
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Checks encoded with the bank's account number and a numeric code to identify the sub-account—that is, the respondent bank's customer's account—are frequently found in PTAs kept in the names of respondent banks. Occasionally, though, the correspondent bank is unable to identify the holders of the sub-accounts.
Which statement (or statements) about money laundering is/are true?
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Money laundering is the process of taking proceeds from criminal activity, hiding their true source, and then using the money for either legitimate or illicit purposes. Money laundering, to put it simply, is the act of disguising illicit funds as legitimate.
Which of the following services does Credit Union Central handle and perform?
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Best described as a trade group for credit unions, a credit union central is owned by its member credit unions and provides for many of their financial requirements. Services linked to capital liquidity, regulatory duties advocacy, research, and training, and shared operational or back-office operations like check clearing and electronic funds transfer (EFT) processing are a few examples of services that may be provided.
When it comes to the electronic transfers that a bank receives from its current clientele, which kind(s) of transactions will be subject to scrutiny by a group AML officer?
Any financial transaction that is started by an electronic device—such as a computerized Automated Clearing House (ACH), an automated teller machine (ATM), an electronic terminal, a mobile phone, or a landline—is considered an electronic transfer of funds.
Tom creates a credit balance on his credit card by prepaying it with money he has already introduced into the financial system illegally. Subsequently, Tom asks for a credit return, allowing him to further conceal the source of the money. Which money laundering procedure would this be regarded as?
Tom creates a credit balance on his credit card by prepaying it with money he has already introduced into the financial system illegally. Subsequently, Tom asks for a credit return, allowing him to further conceal the source of the money. This is what layering looks like.