Question 1

You are the chief compliance officer for a non-U S Bank that maintains some accounts in the name of U S residents Your country has signed a FATCA Model 1 inter-governmental agreement. In developing your FATCA compliance program which should be incorporated into your program?

Options :

A : Customer due diligence for FATCA should be based on existing IRS requirements (or Qualified Intermediaries

B : Customer due diligence for FATCA should leverage your existing AML program

C : IRS reporting must include all account balances and securities held in the name of a US resident

D : Once evidence indicates a relationship with a U S resident, an exemption to file form must be obtained

Answer: C

Question 2

Your bank has recently been targeted by cyber attackers who have compromised the institutions network and stolen some customers online account credentials to conduct account takeovers. Your team is responsible for reporting the incident to law enforcement and regulatory authorities which includes filing Suspicious Activity or Transaction Reports (SAR/STR) You are reviewing accounts that are thought to have been affected to determine if reporting is needed. Which of the findings below would MOST likely trigger a SAR/STR report?

Options :

A : An account displays several withdrawals from ATMs within the past three days

B : A customer's account has not displayed any transaction activity in more than a month

C : An account has recently initiated a series of funds transfers to previously unknown recipients

D : An account received a fairly large cash deposit shortly before the cyber incident started

Answer: C

Question 3

During a risk assessment of its customer onboarding process, a financial institution identifies a lack of adequate procedures for verifying the beneficial ownership of corporate clients. What is the most appropriate action for the institution to take to address this deficiency?

Options :

A : Immediately suspend all new customer onboarding activities until the procedures are updated.

B : Implement enhanced monitoring for transactions involving corporate clients with unidentified beneficial owners.

C : Revise the customer onboarding procedures to incorporate requirements for verifying beneficial ownership.

D : Disregard the issue as long as corporate clients pass other due diligence checks.

Answer: C

Question 4

Your construction company wishes to hire Mr. X to provide consultancy services within his country. He has his own consulting firm and is also a board member of a state-owned bank Mr. X is known for having highlevel business connections and for charging exorbitant rales for his services Mr. X does not like to complete paperwork and prefers to work based on a verbal agreement. Which three facts are red flags requiring enhanced due diligence? Choose 3 answers

Options :

A : Mr. X may be considered to be a politically exposed person (PEP)

B : The price Mr. X charges is suspect if fees are not itemized and documented

C : As a board member of a stale-owned bank Mr. X may be considered a public official under the U.S. Foreign Corrupt Practices Act

D : The price Mr. X charges is suspect since he is in the business of helping companies obtain and retain business

Answer: A,B,C

Question 5

An internal auditor is conducting a quality assurance review of sales results and records for a large U.S. based aerospace and defense contracting firm The auditor has been tasked with reviewing the recordsofsales departments in several countries because the company has raised concerns over accounting discrepancies and possible issues with inflated sales figures. In the records of one sales department the auditor documents an unusually high number of returnsofairplane parts. These returns come from purchasers who executed sales contracts only to invoke right of return shortly afterwards. Upon reviewing thesesales contracts,the auditor cannot find specific provisions regarding right of return for purchasers. Given this information which is the MOST likely conclusion the internal auditor will make?

Options :

A :

The sales department may be violating sanctions through the undocumented saleofdual-use goods to countriessubjectto U S sanctions

B :

The sales department manager may be involved in an embezzlement scheme tied to the returned airplane parts

C :

The sales department may be involved in a tax evasion scheme involving falsified returns to disguise undisclosed assets

D :

The sales department may beinvolved in a fraudulent revenue recognition scheme related to hidden payment andrefundterms

Answer: D

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