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What is the primary advantage of using a risk-based approach in allocating compliance resources?

A.

It reduces the overall cost of compliance programs.

B.

It eliminates the need for periodic audits of low-risk customers.

C.

It ensures focus on high-risk areas while maintaining operational efficiency.

D.

It standardizes compliance processes across all regions.

Based on the AML principles outlined by the Wolfsberg Group, what do private and correspondent banks have in common when monitoring for terrorist financing?

A.

Cash access from a pre-paid card increases the potential that the card will be used for money laundering purposes.

B.

Transaction monitoring examines the relationship between due diligence information and account closings.

C.

Account and transactional activity are monitored after the proper identification and verification of customers.

D.

Numbered or alternate name accounts will only be accepted if the bank has established the identity of the client and beneficial owner.

Challenges in the implementation of new technologies for AML/CFT include: (Select Four.)

A.

data privacy.

B.

enhanced due diligence (EDD) policies.

C.

the Travel Rule.

D.

data quality.

E.

complexity.

F.

regulatory.

Which principles of the Egmont Group of Financial Intelligence Units (FIUs) are aimed at maximizing cooperation between FIUs to more effectively combat money laundering? (Select Two.)

A.

Eliminating spontaneous information sharing between FIUs to reduce the burden of excess investigative work

B.

FIU cooperation should always be channeled through designated intermediaries

C.

Information exchange should take place informally, without too many formal prerequisites

D.

Formal Egmont Group membership requirements ensure a high commitment of the eligible FIUs

E.

It is within an FIU's authority to sign Memorandums of Understanding independently

Country A's anti-corruption authority has been investigating the movement of potential proceeds of bribery and corruption to Country B and is now preparing to take the case to a local court.

Which method of obtaining the required evidence to prosecute the case would be most effective?

A.

Make an official request directly from the head of Country A's anti-corruption authority to Country B's corresponding law enforcement authority

B.

Make a request for the required evidence using Country A's mutual legal assistance treaty with Country B

C.

Use the International Criminal Police Organization (INTERPOL) network to obtain the required evidence from Country B

D.

Use the Egmont Secure Web to obtain the required evidence from Country B's financial intelligence unit

The compliance officer at a casino in Taiwan discovers that the casino received multiple cash deposits from a customer just below the Large-Amount Transaction Report (LTR) limit on consecutive days. The customer used three different betting accounts.

What is the appropriate next step?

A.

Make a note in the customer's account that the customer's gambling activities are frequently conducted below the reporting limit

B.

Follow internal reporting procedures to escalate the activity as suspicious and report to appropriate authorities

C.

Inform the customer their activity Is suspicious and request an explanation

D.

Contact law enforcement to launch an Investigation into the customer's financial activities

A multinational corporation is considering expanding into a new market with a history of political instability and corruption.

Which strategy would be most effective in mitigating reputational risk from a financial crime perspective associated with such an expansion?

A.

Ensure the jurisdiction risks and other relevant factors have been taken into consideration in the EWRA and the residual risks are within the corporation's risk appetite

B.

Partnering with established local businesses to leverage their knowledge and connections while sharing risks

C.

Ensuring the company has strong ties with local government officials to influence policy and avoid negative scrutiny

D.

Committing to open communication, ethical practices, and community engagement to build trust with stakeholders

E.

Minimizing the company's direct presence in the country to reduce exposure to potential risks

Which regulation is the cornerstone of AML/CFT legislation in the United States and requires financial institutions (FIs) to establish and maintain robust AML programs, including customer identification and due diligence procedures, as well as record-keeping and reporting of certain transactions to the Financial Crimes Enforcement Network (FinCEN)?

A.

USA PATRIOT Act

B.

Bank Secrecy Act (BSA)

C.

Money Laundering Control Act (MLCA)

D.

Markets in Crypto-Assets Regulation (MiCA)

Which red flags apply to trade-based money laundering (TBML) schemes? (Choose three.)

A.

Use of wire transfers

B.

Loitering

C.

Instructions or involvement from third parties

D.

Amended letters of credit without reasonable justification

E.

Non-standard settlement arrangements

What is the primary purpose of anti-bribery and corruption regulations?

A.

To prohibit the payment of anything of value by persons or entities to government officials or employees of state-owned enterprises to obtain an improper business advantage

B.

To prohibit the conversion of illegally obtained money into legal money by senior government figures

C.

To protect against election interference by corrupt foreign adversaries facilitated by illicit funds

D.

To protect against the use of illegal means by senior political figures to avoid paying taxes