Treasury Enforcement Agent Exam Regulatory Frameworks & Compliance 3 — Questions and Answers
Question 1: A Treasury Enforcement Agent is investigating a casino. Under the BSA, what cash transaction amount requires casinos to file a CTR?
- $3,000
- $5,000
- $10,000 (Correct answer)
- $20,000
Correct answer: $10,000
Casinos, like financial institutions, must file a CTR for cash-in or cash-out transactions exceeding $10,000.
Question 2: What is the primary purpose of the Financial Action Task Force (FATF)?
- Prosecuting international drug traffickers
- Setting global standards and promoting anti-money laundering and counter-terrorism financing policies (Correct answer)
- Administering U.S. economic sanctions programs
- Investigating foreign bribery cases
Correct answer: Setting global standards and promoting anti-money laundering and counter-terrorism financing policies
FATF is an intergovernmental body that develops and promotes policies to combat money laundering, terrorist financing, and related threats.
Question 3: Under the Foreign Corrupt Practices Act (FCPA), which of the following is TRUE regarding facilitating payments?
- They are always illegal under the FCPA
- They are permitted for routine governmental actions such as processing permits (Correct answer)
- They are only legal if under $500
- They are only applicable to non-U.S. companies
Correct answer: They are permitted for routine governmental actions such as processing permits
The FCPA contains an exception for facilitating payments made to expedite routine, non-discretionary governmental actions.
Question 4: Which provision of the USA PATRIOT Act allows financial institutions to share information about suspected money launderers with each other without violating privacy laws?
- Section 311
- Section 312
- Section 314(b) (Correct answer)
- Section 326
Correct answer: Section 314(b)
Section 314(b) of the USA PATRIOT Act permits voluntary information sharing between financial institutions regarding suspected money laundering or terrorist financing.
Question 5: An IRS Special Agent discovers a business owner depositing exactly $9,500 in cash multiple times per week. This behavior most likely constitutes:
- Normal business practice
- Structuring, a federal crime under 31 U.S.C. § 5324 (Correct answer)
- Tax evasion under the Internal Revenue Code
- Wire fraud under 18 U.S.C. § 1343
Correct answer: Structuring, a federal crime under 31 U.S.C. § 5324
Breaking up transactions to stay below the $10,000 CTR reporting threshold constitutes structuring, which is a federal crime regardless of whether the underlying funds are legal.
Question 6: The Bank Secrecy Act requires financial institutions to retain records of wire transfers of $3,000 or more. How long must these records be retained?
- 1 year
- 3 years
- 5 years (Correct answer)
- 7 years
Correct answer: 5 years
The BSA's Recordkeeping Rule requires financial institutions to retain wire transfer records for five years.
Question 7: Which of the following scenarios would most likely require filing a SAR under FinCEN regulations?
- A customer makes a single $12,000 cash deposit
- A customer consistently makes large deposits followed by immediate wire transfers to offshore accounts with no apparent business purpose (Correct answer)
- A business customer deposits payroll checks from multiple employees
- A customer applies for a mortgage and cannot provide two years of tax returns
Correct answer: A customer consistently makes large deposits followed by immediate wire transfers to offshore accounts with no apparent business purpose
Rapid movement of funds to offshore accounts with no legitimate business explanation is a classic red flag for money laundering, requiring a SAR filing.
Treasury Enforcement Agent Exam Regulatory Frameworks & Compliance 3
A Treasury Enforcement Agent is investigating a casino.
Under the BSA, what cash transaction amount requires casinos to file a CTR?