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

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 3

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

Question 4

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 5

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

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