RCMS Anti-Money Laundering & KYC 5

Question 1

What does the Corporate Transparency Act (CTA), effective January 2024, primarily require?

Accepted Answer

Most U.S. companies to report their beneficial owners to FinCEN

Answer

The CTA requires millions of U.S. companies to report beneficial ownership information to FinCEN to combat the misuse of shell companies for illicit finance.

Question 2

In AML risk assessment, which factor would most likely elevate a customer's risk rating?

Accepted Answer

The customer's business involves significant cash transactions in a high-risk jurisdiction

Answer

Cash-intensive businesses operating in high-risk jurisdictions present elevated AML risk due to greater opportunities for illicit fund concealment.

Question 3

Which of the following best describes 'Hawala' in the context of AML?

Accepted Answer

An informal value transfer system based on trust that operates outside traditional banking

Answer

Hawala is an informal value transfer system where money is moved through a network of brokers (hawaladars) without actual physical transfer of funds.

Question 4

What is a 'Know Your Customer's Customer' (KYCC) process?

Accepted Answer

Due diligence conducted on the customers of an institution's business clients to assess downstream risk

Answer

KYCC extends KYC practices to understand who a business customer's own customers are, reducing the risk of being used as an intermediary for illicit transactions.

Question 5

Under FATF standards, countries with significant AML/CFT deficiencies are placed on which lists?

Accepted Answer

The 'Grey List' (Increased Monitoring) and 'Black List' (Call for Action)

Answer

FATF maintains a grey list of jurisdictions under increased monitoring and a black list (IOSCO) of high-risk jurisdictions subject to a call for action.

(RCMS) Registered Compliance Management Specialist Certification Practice Test

(RCMS) Registered Compliance Management Specialist Certification Practice Test

RCMS Anti-Money Laundering & KYC 5