AML EXAM 1 QUESTIONS WITH 100% CORRECT ANSWERS

AML EXAM 1 QUESTIONS WITH 100% CORRECT ANSWERS 3 Stages of Money Laundering - answer✔✔1. Placement 2. Layering 3. Integration Three things that might be done during the course of laundering money. - answer✔✔a. Depositing money into a bank account b. Buying high -end goods c. Sending money abroad T/F Ac cepting money derived from illegal sources makes you an accomplice to money laundering. - answer✔✔True What is the goal of the Placement stage? - answer✔✔Getting the money into the financial system. What is the ultimate purpose of ML? - answer✔✔To make it appear that the funds are legitimate. Examples of economic consequences of ML - answer✔✔1. Increased exposure to organized crime and corruption 2. Dampening effect on foreign investments 3. Risk of international sanctions 3 ML risks to Financial Institutio ns - answer✔✔1. Reputational 2. Operational 3. Legal Structuring is usually a process associated with which stage in ML? - answer✔✔Placement Examples of ML in banks - answer✔✔1. Bank accounts 2. Concentration accounts 3. Correspondent accounts 4. Electroni c funds transfer 5. Payable through -accounts 6. Private banking Vulnerabilities of ML in Correspondent banking - answer✔✔- Correspondent banking relationships create a situation in which a financial institution carries out transactions on behalf of customers of another institution. - The amount of money that flows thro ugh correspondent accounts can pose a significant threat to financial institutions, as they process large volumes of transactions for their customers' customers. Examples of ML in non -bank financial institutions - answer✔✔1. Credit and Debit cards 2. Money remitters / Money exchange houses 3. Insurance companies 4. Securities Broker -Dealers 5. Casinos 6. High -value item dealers 7. Vehicle sellers 8. Travel agencies 9. Internet banking 10. Internet casinos 11. Pre -paid Cards and E -cash 12. Trusts 13. Bearer instruments Shell Company - answer✔✔A company that at the time of incorporation has no significant assets or operations. Shelf Company - answer✔✔A corporation that has no activity. Smurfing - answer✔✔A commonly used money laundering method, smurfing involv es the use of multiple individuals and/or multiple transactions for making cash deposits, buying monetary instruments or bank drafts in amounts under the reporting threshold. See Structuring.