ACAMS Exam 65 Questions with Verified Answers,100% CORRECT

ACAMS Exam 65 Questions with Verified Answers 1) Gold is an extremely attractive vehicle for laundering because it is relatively compact and easy to transport 2) the gold market is a target for criminal activity be ...

ACAMS Exam 65 Questions with Verified Answers 1) Gold is an extremely attractive vehicle for laundering because it is relatively compact and easy to transport 2) the gold market is a target for criminal activity because it is lucrative and holds its value regardless of the form it takes - CORRECT ANSWER Name two key findings by FATF in its report on "Money Laundering/Terrorist Financing Risks...Associated with Gold" (2015) Casinos Real estate agents Lawyers, accountants, and notaries Trust and company service providers Dealers in precious metals - CORRECT ANSWER DNFPBs (5) encourages countries to criminalize terrorist financing and the financing of terrorist organizations and individual terrorists with or without a link to a specific terrorist act, as well as ensuring these crimes are designated as money laundering predicate offenses. - CORRECT ANSWER Recommendation 5 Terrorism + NPOs - CORRECT ANSWER Recommendation 8 1) policy, cooperation, and coordination to mitigate money laundering and terrorist financing 2) prevention of proceeds of crime from entering into financial system and reporting when they do 3) detection and disruption of ML/TF threats - CORRECT ANSWER FATF Intermediate Outcomes for Effectiveness Evaluation (3) 1) expanded coverage to include TF 2) expanded categories of businesses that should be covered by national laws to include real estate agents, precious metals dealers, accountants, lawyers, and TSPs 3) clearer definition of ML predicate offenses 4) prohibition of shell banks 5) specified compliance procedures on customer ID and DD, EDD 6) stronger safeguard regarding international cooperation - CORRECT ANSWER FATF Recommendations updates in 2003 1) creation of Recommendation on assessing risks and applying risk-based approach 2) creation of Recommendation for targeted financial sanctions related to proliferation 3) more attention on domestic PEPs and individuals with prominent roles in international organizations 4) new requirement for risk assessment of new products prior to their launch 5) new requirement for financial groups to implement group-wide AML/CTF and have procedures for sharing that info 6) inclusion of tax crimes within scope of designated categories of offenses for ML - CORRECT ANSWER FATF Recommendations updates in 2012 $15,000 - CORRECT ANSWER FIs occasional customer threshold (FATF) $3,000 - CORRECT ANSWER Casino threshold (FATF) $15,000 - CORRECT ANSWER Dealers in precious metals threshold (FATF) 1) Engaging with the country and granting observership 2) Carrying out ME (within 3 years of oberservership), agreeing on an action plan, and granting membership - CORRECT ANSWER Steps for FATF membership 1) eight or more NC/PC ratings for TC 2) rated NC/PC on one or more of Recommendations 3, 5, 10, 11, and 20 3) low-moderate effectiveness for 7+ of the 11 effectiveness outcomes 4) low level of effectiveness for 4+ of the 11 effectiveness outcomes - CORRECT ANSWER When is a ME unsatisfactory? - countries or jurisdictions with strategic deficiencies that are so serious FATF calls on its members and non-members to apply counter-measures - "" for which FATF calls on its members to apply EDD - CORRECT ANSWER FATF's "Public Statement" Identifies countries or jurisdictions with strategic weaknesses in AMLCTF measures but that have provided a high-level commitment to an action plan developed with FATF - CORRECT ANSWER FATF's "Improving Global AML/CTF Compliance: Ongoing Process" Banking supervisors must determine that banks have adequate policies, practices and procedures in place, including strict 'know-your-customer' rules, that promote high ethical and professional standards in the financial sector and prevent the bank being used, intentionally or unintentionally, by criminal elements." It also urged nations to adopt FATF's 40 Recommendations. - CORRECT ANSWER "Core Principles for Effective Banking Supervision" Basel, 1997 examines the critical elements for effective management of KYC risk throughout a banking group and addresses the need for banks to adopt a global approach and to apply the elements necessary for a sound KYC program to both the parent bank or head office and all of its branches and subsidiaries. - CORRECT ANSWER "Consolidated KYC Risk Management" Basel, 2004 - risk analysis and governance (tone at the top) - three lines of defense - customer DD and acceptance (setting policy, assessing risk, ID + verification) - transaction monitoring systems and ongoing monitoring - management of information (record-keeping, 5 years) - reporting of suspicious transactions and asset freezing - CORRECT ANSWER "Sound Management Of Risks Related To Money Laundering And Financing Of Terrorism", Basel 2016 1) the line of business - creating, implementing, and maintaining policies/procedures and communication to all personnel 2) AML compliance function 3) Audit function - CORRECT ANSWER 3 Lines of Defense - defined ML and TF as separate crimes - extended customer ID and suspicious activity reporting obligations to TCSPs, life insurance intermediaries, and dealers selling goods for cash of more than 15,000 euro - detailed "risk-based approach" - safe harbor - mandated statistics on STRs - ID and verify beneficial ownership (controls 25%+ of legal entity or person) - CORRECT ANSWER Third EU Directive (2005) - decreased threshold from 15,000 euro to 10,000 - "casinos" was broadened to all "providers of gambling services" - CDD must be applied for transfers of funds exceeding 1,000 euro - tax crimes included in definition of criminal activity - CORRECT ANSWER Fourth EU Directive (2015) 1) role- FSRBs play an essential role in ID'ing and addressing AMLCTF technical assistance needs for their members 2) autonomy- free standing organizations 3) reciprocity - CORRECT ANSWER Three principles that apply to both FATF and FSRBs Most frequently observed indicators of ML: 1. large-scale cash transactions 2. Atypical or uneconomical fund transfers to or from a foreign jurisdiction. 3. Unusual business activity or transactions. 4. Large and/or rapid movements of funds. 5. Unrealistic wealth compared to client profile. 6. Defensive stance to questioning. - CORRECT ANSWER "FIUs in Action: 100 Sanitized Cases", Egmont 1999 -accept only those clients whose source of wealth and funds can be reasonably established to be legitimate -identify the beneficial owner of funds "for all accounts" when that person is someone other than the client -perform due diligence on "money managers and similar intermediaries" -at least one person other than the private banker should approve all new clients and accounts. - CORRECT ANSWER "Anti-Money Laundering Principles for Private Banking" Wolfsberg 2000 - PEPs - people residing in and/or having funds from high-risk countries - people involved in activities known to be susceptible to ML - external inquiries, derogatory info from press - CORRECT ANSWER EDD is required for...(Wolfsberg Principles) Special Measures for Primary ML Concerns - provides the U.S. Treasury Department with the authority to apply graduated, proportionate measures against a foreign jurisdiction, a foreign financial institution, a type of international transaction or a type of account that the Treasury Secretary determines to be a "primary money laundering concern." - By designating a country or a financial institution as a primary money laundering concern, the U.S. government can force U.S. banks to halt many of their financial dealings with the designee - Distinct sanctions from OFAC! - CORRECT ANSWER Section 311 1. keep records/file reports 2. beneficial ownership of any account opened/maintained in the US by foreign person 3. info on customers using foreign bank's PTA 4. info on customers using foreign bank's correspondent account 5. ability to close these accounts - CORRECT ANSWER Special Measures once designated as a Primary ML Concern (5) Correspondent and Private Banking Accounts - CORRECT ANSWER Section 312 1. Determine whether enhanced due diligence is necessary 2. Assess the money laundering risk presented by the correspondent account 3. Applying risk-based procedures and controls reasonably designed to detect and report suspected money laundering - CORRECT ANSWER Section 312 DD program required measures (3) (a) an account with a minimum aggregate deposit of $1 million, (b) for one or more non-U.S. people and (c) which is assigned to a bank employee acting as a liaison with the non-U.S. person. - CORRECT ANSWER Section 312 Private Banking Account Definition • ascertain the identity of all nominal and beneficial owners of the accounts (BO); • ascertain whether any such owner is a senior foreign political figure (PEP); • ascertain the source of the funds in the account and the purpose and expected use of the account (SOURCE AND USE); and • monitor the account to ensure the activity in the account is consistent with the information provided (CONSISTENCY) - CORRECT ANSWER For covered private banking accounts, US institutions must take reasonable steps to (section 312) Help "law enforcement identify, disrupt, and prevent terrorist acts and money laundering activities by encouraging further cooperation among law enforcement, regulators, and financial institutions to share information regarding those suspected of being involved in terrorism or money laundering." - CORRECT ANSWER Section 314 (A) and (B) enable U.S. federal, state, local and foreign (European Union) law enforcement agencies, through FinCEN, to locate accounts and transactions of persons that may be involved in terrorism or money laundering. - CORRECT ANSWER Section 314 (a) Provides financial institutions with the ability to share information with one another, under a safe harbor that offers protections from liability, in order to better identify and report potential money laundering or terrorist activities (voluntary) - CORRECT ANSWER Section 314 (b) Forfeiture from US Correspondent Account: permits the U.S. government to seize funds in the same amount from a correspondent bank account in the United States that has been opened and maintained for the foreign bank. - CORRECT ANSWER Section 319 (a) Recording relating to Correspondent Accounts for Foreign Banks - Allows the appropriate federal banking agency to require a financial institution to produce within 120 hours (5 days) records or information related to the institution's AML compliance or related to a customer of the institution or any account opened, maintained, administered or managed in the United States by the financial institution. - allows the Secretary of the Treasury or the Attorney General to subpoena records of a foreign bank that maintains a correspondent account in the United States - failure to comply: AG can order US FI to close correspondent account within 10 days - foreign banks must designate a registered agent in the US to accept service of subpoenas - foreign banks must keep records of ID of 25% owners - CORRECT ANSWER Section 319 (b) - First criminal ML law in US - used if the property involved in a financial transaction represents proceeds from a SUA - reaches foreign individuals and FIs if the transaction occurs in whole/part in US or if FI maintains a bank account with US FI - prosecution must only prove willful blindness - CORRECT ANSWER Money Laundering Control Act (US 1986) virtually every US crime that produces an economic advantage (wire fraud, bank fraud, embezzlement, illegal gambling, narcotics offenses, etc.) - CORRECT ANSWER What is an SUA? Banks Casinos Offshore corporations located in tax/secrecy havens Import/export companies (used) car/boat/plane dealerships and parts manufacturers Cash-intensive businesses (parking garages, restaurants, retail) Embassies MSBs (Money remitters, check cashers, etc) Virtual currency exchanges Professional service providers (attorneys, accountants, notaries, investment brokers, other financial liaisons) Travel agencies Gun/gem/precious metals dealers Brokers/dealers in securities - CORRECT ANSWER Inherently high-risk customers CDD - ID customer and verify using independent source information - ID beneficial owner - understand nature and purpose of business relationship - conduct ongoing DD - CORRECT ANSWER Recommendation 10 Clearing house of ML information for the benefit of national and international AML agencies (UNODC) - CORRECT ANSWER IMoLIN AMLID: password protected database on national AML laws and regulations, contacts, and authorities Reference data Country page Calendar of events Current events - CORRECT ANSWER IMoLIN 5 main features Establish an FIU - CORRECT ANSWER Recommendation 29 Responsibilities/What does the FIU do Responsible for conducting ML and TF investigations within national AMLCTF framework In major offenses, develop a parallel financial investigation Trace, freeze, and seize Access all necessary documents and info Utilize suitable investigation techniques - CORRECT ANSWER Recommendations 30 and 31 MLATS - CORRECT ANSWER Recommendation 37 Implementation of conventions - CORRECT ANSWER Recommendation 36 freezing and confiscation - Countries should have the authority to take action in response to requests by a foreign country to ID, freeze, seize, and confiscate property laundered - CORRECT ANSWER Recommendation 38 extraditable offenses don't provide safe haven to criminals - CORRECT ANSWER Recommendation 39 other forms of cooperation -Competent authorities can rapidly, constructively, and effectively provide widest range of international cooperation in relation to MLTF and associated offenses. - This is documented in an MOU - clear channels, obligations, expectations - CORRECT ANSWER Recommendation 40 Risk based approach - CORRECT ANSWER Recommendation 1 national cooperation and coordination - CORRECT ANSWER Recommendation 2 targeted financial sanctions related to proliferation - CORRECT ANSWER Recommendation 7 FI secrecy laws - CORRECT ANSWER Recommendation 9 record-keeping - CORRECT ANSWER Recommendation 11 PEPs - CORRECT ANSWER Recommendation 12 correspondent banking - CORRECT ANSWER R13 MVTS - CORRECT ANSWER R14 New technologies - CORRECT ANSWER R15 Wire transfers - CORRECT ANSWER R16 Reliance on third parties (to conduct CDD) - CORRECT ANSWER R17 internal controls and foreign branches and subsidiaries (policies, procedures, and controls; training; audit) - CORRECT ANSWER R18 reporting suspicious activity - CORRECT ANSWER R20 tipping off and confidentiality - CORRECT ANSWER R21 DNFBPs and CDD - CORRECT ANSWER R22 DNFBPs other measures - CORRECT ANSWER R23 7 elements of CDD according to FATF - CORRECT ANSWER Customer ID Profile Risk Rating Documentation Monitoring gation Customer Acceptance