Question 1

A hacker gains access to aclient’semail. The hacker, posing as the client contacts the real client's financial advisor and requests a wire transfer of S50,000 The advisor sells stock to generate cash and wires the funds to the account at ABC Bank provided by the hacker Has money laundering occurred?

Options :

A : Yes; the advisor sold stock and generated cash

B : No; there was no placement of funds in the account

C : No; the hacker has committed fraud but not money laundering

D : Yes; the hacker committed fraud and then wired money out to hide its origin

Answer: D

Question 2

During a review of its compliance program, XYZ Bank discovers that it has processed transactions involving individuals and entities on the Office of Foreign Assets Control (OFAC) Specially Designated Nationals (SDN) list. What is the most appropriate action for XYZ Bank to take?

Options :

A : Immediately report the findings to OFAC and await further instructions.

B : Suspend all transactions until the individuals and entities are removed from the SDN list.

C : Implement enhanced due diligence procedures for transactions involving high-risk countries.

D : Conduct a retrospective review of transactions to assess the extent of potential violations.

Answer: A

Question 3

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 4

In the context of Compliance Programs and Controls, which of the following statements best describes the purpose of an organizational overview of financial crime controls?

Options :

A : To ensure strict adherence to internal audit procedures.

B : To identify potential vulnerabilities and risks within the organization's operations.

C : To facilitate efficient communication between different departments.

D : To solely focus on regulatory compliance without considering business objectives.

Answer: B

Question 5

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

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