AML Study Guide questions and
answers rated A+ passed
Describe the elements that should be addressed in a global approach to KYC identified in the
Basel Committee's October 2004 paper called "Consolidated KYC Risk Management" - ANS
✔✔The Basel Committee's October 2004 paper called "Consolidated KYC Risk Management"
addresses the need for banks to adopt a global approach and to apply the elements necessary
for a sound KYC program on both the parent bank or head office and all its branches and
subsidiaries. These elements consist of:
- Risk Management
- Customer Acceptance and Identification Policies, and
- Ongoing Monitoring of Higher-Risk Accounts
What is one of the most important aspects of due diligence for a bank when establishing a
relationship with a money remitter? - ANS ✔✔Ensuring the money remitter is properly licensed.
Identify the seven specific customer identification issues as identified in the Basel Committee's
October 2001 paper called "Customer Due Diligence for Banks" - ANS ✔✔- Trust, Nominee, and
Fiduciary Accounts
- Corporate Vehicles, particularly companies with nominee shareholders or entities with shares
in bearer form
- Introduced Businesses
- Client Accounts opened by professional intermediaries, such as "pooled" accounts managed by
professional intermediaries on behalf of entities such as mutual funds, pension funds, and
money funds
- Politically exposed persons
- Non-face-to-face customers, i.e., customers who do not present themselves for a personal
interview, and
- Correspondent banking
,If an institution decides to file an STR, what should they do as soon as possible? - ANS
✔✔Notify the investigators or prosecutors. Suspicious Transaction Report
How does the Caribbean Financial Action Task Force (CFATF) monitor member's implementation
of the anti-money laundering recommendations? - ANS ✔✔The CFATF monitors members'
implementation of the anti-money laundering recommendations identified in the Kingston
Declaration through the following activities:
- Self-assessment of the implementation recommendations
- An ongoing program of mutual evaluation of members
- Coordination of, and participation in, training and technical assistance programs
- Biennial plenary meetings for technical representatives, and
- Annual ministerial meetings
Identify the three gateways that assist with the AML cooperation between countries: - ANS ✔✔-
Mutual Legal Assistance Treaties
- Financial Intelligence Units
- The Supervisory Channel
Identify the Four Ways that good technology can equip organizations with improved defenses in
the fight against financial crime - ANS ✔✔- Transaction monitoring: scanning and analyzing data
for potential money laundering activity
- Watch list filtering: screening new accounts, existing customers, beneficiaries and transaction
counterparties against terrorist, criminal, and other blocked persons watch lists
- Automation of regulatory reporting: filing STRs, currency transaction reports (CTRs), or other
regulatory reports with the government
- A detailed audit trail: demonstrates compliance efforts to regulators
, Define Know Your Customer - ANS ✔✔Know Your Customer (KYC) refers to anti-money
laundering policies and procedures used to determine the true identity of a customer and the
type of activity that is "normal and expected" and to detect activity that is "unusual" for a
particular customer. Many experts believe that a sound KYC program is one of the best tools in
an effective anti-money laundering program.
According to FATF's paper called "Money Laundering and Terrorist Financing Vulnerabilities of
Commercial Websites and Internet Payment Systems" what are the different classes of
commercial websites? - ANS ✔✔- Mediated Customer to Customer - private individuals sell to
one another via an online market place (eBay)
- Mediated Business to Customers - multiple merchants sell to customers via an online market
place (Amazon)
- Non-mediated Customers to Customers - allows customers to advertise the goods they want to
sell (Craigslist)
- Director Business to Customer - merchants sell via their own website (gap.com)
- Direct Business to Business - merchants to merchants (Alibaba)
What is Tipping Off? - ANS ✔✔The improper or illegal act of notifying a suspect that he or she is
the subject of a STR or is otherwise being investigated or pursued by the authorities.
What are the four key elements of Know Your Customer (KYC) as identified in the Basel
Committee's October 2001 paper called "Customer Due Diligence for Banks?" - ANS ✔✔-
Customer Identification
- Risk Management
- Customer Acceptance
- Monitoring
What is the broad objective of UNODC model legislation on money laundering and financing of
terrorism? - ANS ✔✔UN Office of Drug and Crime
answers rated A+ passed
Describe the elements that should be addressed in a global approach to KYC identified in the
Basel Committee's October 2004 paper called "Consolidated KYC Risk Management" - ANS
✔✔The Basel Committee's October 2004 paper called "Consolidated KYC Risk Management"
addresses the need for banks to adopt a global approach and to apply the elements necessary
for a sound KYC program on both the parent bank or head office and all its branches and
subsidiaries. These elements consist of:
- Risk Management
- Customer Acceptance and Identification Policies, and
- Ongoing Monitoring of Higher-Risk Accounts
What is one of the most important aspects of due diligence for a bank when establishing a
relationship with a money remitter? - ANS ✔✔Ensuring the money remitter is properly licensed.
Identify the seven specific customer identification issues as identified in the Basel Committee's
October 2001 paper called "Customer Due Diligence for Banks" - ANS ✔✔- Trust, Nominee, and
Fiduciary Accounts
- Corporate Vehicles, particularly companies with nominee shareholders or entities with shares
in bearer form
- Introduced Businesses
- Client Accounts opened by professional intermediaries, such as "pooled" accounts managed by
professional intermediaries on behalf of entities such as mutual funds, pension funds, and
money funds
- Politically exposed persons
- Non-face-to-face customers, i.e., customers who do not present themselves for a personal
interview, and
- Correspondent banking
,If an institution decides to file an STR, what should they do as soon as possible? - ANS
✔✔Notify the investigators or prosecutors. Suspicious Transaction Report
How does the Caribbean Financial Action Task Force (CFATF) monitor member's implementation
of the anti-money laundering recommendations? - ANS ✔✔The CFATF monitors members'
implementation of the anti-money laundering recommendations identified in the Kingston
Declaration through the following activities:
- Self-assessment of the implementation recommendations
- An ongoing program of mutual evaluation of members
- Coordination of, and participation in, training and technical assistance programs
- Biennial plenary meetings for technical representatives, and
- Annual ministerial meetings
Identify the three gateways that assist with the AML cooperation between countries: - ANS ✔✔-
Mutual Legal Assistance Treaties
- Financial Intelligence Units
- The Supervisory Channel
Identify the Four Ways that good technology can equip organizations with improved defenses in
the fight against financial crime - ANS ✔✔- Transaction monitoring: scanning and analyzing data
for potential money laundering activity
- Watch list filtering: screening new accounts, existing customers, beneficiaries and transaction
counterparties against terrorist, criminal, and other blocked persons watch lists
- Automation of regulatory reporting: filing STRs, currency transaction reports (CTRs), or other
regulatory reports with the government
- A detailed audit trail: demonstrates compliance efforts to regulators
, Define Know Your Customer - ANS ✔✔Know Your Customer (KYC) refers to anti-money
laundering policies and procedures used to determine the true identity of a customer and the
type of activity that is "normal and expected" and to detect activity that is "unusual" for a
particular customer. Many experts believe that a sound KYC program is one of the best tools in
an effective anti-money laundering program.
According to FATF's paper called "Money Laundering and Terrorist Financing Vulnerabilities of
Commercial Websites and Internet Payment Systems" what are the different classes of
commercial websites? - ANS ✔✔- Mediated Customer to Customer - private individuals sell to
one another via an online market place (eBay)
- Mediated Business to Customers - multiple merchants sell to customers via an online market
place (Amazon)
- Non-mediated Customers to Customers - allows customers to advertise the goods they want to
sell (Craigslist)
- Director Business to Customer - merchants sell via their own website (gap.com)
- Direct Business to Business - merchants to merchants (Alibaba)
What is Tipping Off? - ANS ✔✔The improper or illegal act of notifying a suspect that he or she is
the subject of a STR or is otherwise being investigated or pursued by the authorities.
What are the four key elements of Know Your Customer (KYC) as identified in the Basel
Committee's October 2001 paper called "Customer Due Diligence for Banks?" - ANS ✔✔-
Customer Identification
- Risk Management
- Customer Acceptance
- Monitoring
What is the broad objective of UNODC model legislation on money laundering and financing of
terrorism? - ANS ✔✔UN Office of Drug and Crime
