AML Exam Practice Questions with
Correct Answers Already Graded
A+ | Brand New Version
1. FinCEN is an acronym for - ANSWER Financial Crimes Enforcement
Network
2. _______ acts as the designated administrator of the Bank Secrecy Act. -
ANSWER FinCEN
3. FinCEN is established under U.S. Code as a bureau within the: - ANSWER
Treasury department
4. Why is it so important for an agent to become familiar with the AML
program of the insurer the agent represents? - ANSWER Because AML
programs can vary due to the types of covered products they sell, methods of
product distribution and geographic area served.
5. FINRA Rule 3310 established minimum standards for a firm's written AML
compliance program as required under the BSA. Which of the following is
NOT a basic tenet of an AML compliance program under the Rule? -
ANSWER The program must apply ONLY to support staff.
6. Which of the following is NOT one of the goals of the Anti-Money
Laundering Act of 2020? - ANSWER To force agents to adhere to a
fiduciary duty at all times, no matter what
,7. Section 6110(a) of the Anti-Money Laundering Act of 2020 amends the
definition of "financial institution" under the Bank Secrecy Act (BSA) to
apply directly to persons engaged in the trade of: - ANSWER antiquities.
8. The Corporate Transparency Act (CTA) amended the Bank Secrecy Act
(BSA) to require certain entities to report information about their "beneficial
owners." Which of the following statements best defines a "beneficial
owner?" - ANSWER The individual natural persons who ultimately own or
control the companies
9. Under the new FINRA Rule 3210, an "associated person" is presumed to
have a "beneficial interest" in any account that is held by specific
individuals. All of the following are considered having a beneficial interest
EXCEPT: - ANSWER Any co-agent in the office
10.The new FINRA Rule 3210 does not apply to any of the following
EXCEPT: - ANSWER broker-dealers.
11.FATF - ANSWER Financial Action Task Force
12.Palermo Convention Def of ML - ANSWER • Conversion or transfer of
property, knowing it's from criminal act, for the purpose of concealing or
disguising its origin OR assisting someone to do so
• Concealment/disguise of true nature, source, location, movements,
rights of property knowing it's from criminal offense
• Acquisition, possession or use of property knowing it was from a
criminal act when received
13.THREE STAGES OF THE MONEY LAUNDERING CYCLE - ANSWER
1. Placement
2. Layering
, 3. Integration
14.Placement - ANSWER • Physical disposition of cash or assets from
criminal activity
• Use of formal financial institutions, casinos or legit businesses
• Examples:
Blending funds w/legit business
Foreign exchange
Breaking up transactions to evade reporting
requirements
Smuggling
Loans
15.The financial industry is particularly vulnerable to creative fraudulent tactics
during the Coronavirus pandemic, mostly due to: - ANSWER remote
working arrangements.
16.In addition to insurance companies, many other types of finance-related
industries are required to file SARs. Which of the following is a type of
business that is NOT required to do so? - ANSWER Pet grooming services
17.In addition to insurance companies, many other types of finance-related
industries are required to file SARs. Which of the following is a type of
business that is NOT required to do so? - ANSWER Pet grooming services
18.Which of the following would NOT be a type of suspicious activity that
needs reporting? - ANSWER A life policy on a spouse
19.Which of the following would NOT be considered suspicious customer
activity? - ANSWER Taking out a life insurance policy on a young person.
, 20.Which of the following would NOT be a type of suspicious activity that
needs reporting? - ANSWER A life policy on a spouse
21.At what point are financial institutions required to file a Currency
Transaction Report (CTR)? - ANSWER Whenever a currency transaction
exceeds $10,000
22.At what point are financial institutions required to file BOTH a Currency
Transaction Report (CTR) AND a Suspicious Activity Report (SAR) on the
same incident? - ANSWER Whenever a currency transaction exceeds
$10,000 and is otherwise reportable as suspicious activity
23.FINRA publishes its Annual Regulatory and Examination Priorities Letter: -
ANSWER Annually
24.A company that takes in money as payment for fictitious goods, yet appears
to be legitimate through fake invoices and financial statements is called a: -
ANSWER shell company
25.If a customer purchases an annuity with cash in an attempt to launder
money, which stage of the money laundering process is this transaction -
ANSWER The first stage (Placement)
26.Agent Joe is meeting with a client who purchases an immediate annuity with
$10,000 in cash. What must Agent Joe do? - ANSWER He must file an IRS
Form 8300.
27.If the filing of Form 8300 is required, it must be filed by the ________ after
the date the cash transaction occurred. - ANSWER 15th day
Correct Answers Already Graded
A+ | Brand New Version
1. FinCEN is an acronym for - ANSWER Financial Crimes Enforcement
Network
2. _______ acts as the designated administrator of the Bank Secrecy Act. -
ANSWER FinCEN
3. FinCEN is established under U.S. Code as a bureau within the: - ANSWER
Treasury department
4. Why is it so important for an agent to become familiar with the AML
program of the insurer the agent represents? - ANSWER Because AML
programs can vary due to the types of covered products they sell, methods of
product distribution and geographic area served.
5. FINRA Rule 3310 established minimum standards for a firm's written AML
compliance program as required under the BSA. Which of the following is
NOT a basic tenet of an AML compliance program under the Rule? -
ANSWER The program must apply ONLY to support staff.
6. Which of the following is NOT one of the goals of the Anti-Money
Laundering Act of 2020? - ANSWER To force agents to adhere to a
fiduciary duty at all times, no matter what
,7. Section 6110(a) of the Anti-Money Laundering Act of 2020 amends the
definition of "financial institution" under the Bank Secrecy Act (BSA) to
apply directly to persons engaged in the trade of: - ANSWER antiquities.
8. The Corporate Transparency Act (CTA) amended the Bank Secrecy Act
(BSA) to require certain entities to report information about their "beneficial
owners." Which of the following statements best defines a "beneficial
owner?" - ANSWER The individual natural persons who ultimately own or
control the companies
9. Under the new FINRA Rule 3210, an "associated person" is presumed to
have a "beneficial interest" in any account that is held by specific
individuals. All of the following are considered having a beneficial interest
EXCEPT: - ANSWER Any co-agent in the office
10.The new FINRA Rule 3210 does not apply to any of the following
EXCEPT: - ANSWER broker-dealers.
11.FATF - ANSWER Financial Action Task Force
12.Palermo Convention Def of ML - ANSWER • Conversion or transfer of
property, knowing it's from criminal act, for the purpose of concealing or
disguising its origin OR assisting someone to do so
• Concealment/disguise of true nature, source, location, movements,
rights of property knowing it's from criminal offense
• Acquisition, possession or use of property knowing it was from a
criminal act when received
13.THREE STAGES OF THE MONEY LAUNDERING CYCLE - ANSWER
1. Placement
2. Layering
, 3. Integration
14.Placement - ANSWER • Physical disposition of cash or assets from
criminal activity
• Use of formal financial institutions, casinos or legit businesses
• Examples:
Blending funds w/legit business
Foreign exchange
Breaking up transactions to evade reporting
requirements
Smuggling
Loans
15.The financial industry is particularly vulnerable to creative fraudulent tactics
during the Coronavirus pandemic, mostly due to: - ANSWER remote
working arrangements.
16.In addition to insurance companies, many other types of finance-related
industries are required to file SARs. Which of the following is a type of
business that is NOT required to do so? - ANSWER Pet grooming services
17.In addition to insurance companies, many other types of finance-related
industries are required to file SARs. Which of the following is a type of
business that is NOT required to do so? - ANSWER Pet grooming services
18.Which of the following would NOT be a type of suspicious activity that
needs reporting? - ANSWER A life policy on a spouse
19.Which of the following would NOT be considered suspicious customer
activity? - ANSWER Taking out a life insurance policy on a young person.
, 20.Which of the following would NOT be a type of suspicious activity that
needs reporting? - ANSWER A life policy on a spouse
21.At what point are financial institutions required to file a Currency
Transaction Report (CTR)? - ANSWER Whenever a currency transaction
exceeds $10,000
22.At what point are financial institutions required to file BOTH a Currency
Transaction Report (CTR) AND a Suspicious Activity Report (SAR) on the
same incident? - ANSWER Whenever a currency transaction exceeds
$10,000 and is otherwise reportable as suspicious activity
23.FINRA publishes its Annual Regulatory and Examination Priorities Letter: -
ANSWER Annually
24.A company that takes in money as payment for fictitious goods, yet appears
to be legitimate through fake invoices and financial statements is called a: -
ANSWER shell company
25.If a customer purchases an annuity with cash in an attempt to launder
money, which stage of the money laundering process is this transaction -
ANSWER The first stage (Placement)
26.Agent Joe is meeting with a client who purchases an immediate annuity with
$10,000 in cash. What must Agent Joe do? - ANSWER He must file an IRS
Form 8300.
27.If the filing of Form 8300 is required, it must be filed by the ________ after
the date the cash transaction occurred. - ANSWER 15th day
