ACAMS Elements of an AML Program 2

Question 1

What are the 'five pillars' of an effective BSA/AML compliance program under U.S. federal requirements?

Accepted Answer

Internal controls, a designated compliance officer, employee training, independent testing, and customer due diligence

Answer

FinCEN and banking regulators require BSA/AML programs to have five pillars: (1) internal controls, (2) a designated BSA/AML compliance officer, (3) ongoing employee training, (4) independent testing/audit, and (5) customer due diligence (added as the fifth pillar by FinCEN's 2016 CDD Rule).

Question 2

What is the role of the 'board of directors' in overseeing the BSA/AML compliance program?

Accepted Answer

The board approves the AML program and policies, receives regular reports on AML program performance, and is ultimately accountable for ensuring the institution maintains effective AML controls

Answer

The board of directors bears ultimate accountability for BSA/AML compliance. The board approves the AML program and policies, receives regular compliance reports, ensures adequate resources are allocated, and is held responsible by regulators for the effectiveness of the program.

Question 3

What is 'enterprise-wide AML risk management' and how does it differ from a siloed approach?

Accepted Answer

An integrated approach where AML risk identification, assessment, and controls are consistent and coordinated across all business units, geographies, and product lines, rather than managed independently by each unit

Answer

Enterprise-wide AML risk management integrates AML controls across the entire institution — all business lines, geographies, and legal entities — ensuring consistent risk identification, coordinated controls, and holistic visibility into the institution's total AML exposure.

Question 4

What is the purpose of AML 'policies and procedures' and how should they be maintained?

Accepted Answer

Policies establish the institution's high-level AML framework and risk appetite, while procedures provide specific, actionable guidance for implementing the policies; both must be regularly reviewed and updated to reflect regulatory changes and lessons learned

Answer

AML policies establish the institution's overall approach and risk appetite, while procedures provide detailed operational guidance. Both must be current, risk-based, accessible to relevant staff, and regularly reviewed and updated to reflect regulatory changes, examination findings, and evolving risks.

Question 5

What should an effective AML training program include to meet regulatory expectations?

Accepted Answer

Risk-based training tailored to employees' roles and responsibilities, covering relevant AML regulations, red flags specific to their business line, SAR filing obligations, and training on current typologies and schemes

Answer

Effective AML training must be risk-based and role-specific — front-line tellers receive different training than private bankers or trade finance officers — and must be regularly updated to cover current typologies, schemes, and regulatory developments.

(ACAMS) Association of Certified Anti-Money Laundering Specialists Practice Test

(ACAMS) Association of Certified Anti-Money Laundering Specialists Practice Test

ACAMS Elements of an AML Program 2