Question 1

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 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

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 4

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 5

Your client has been targeted by a payments scam that has resulted in him remitting significant sums of money to the entity perpetrating the fraud Your client has traced the payments which revealed that the ultimate beneficiary of the fraud is Company A that appears to be operating from the British Virgin Islands (BVI) Before taking any further action your client would like to confirm if Company A Ltd is incorporated in the BVI. How can they do this?

Options :

A : Contact the Commercial Division of the High Court of the BVI

B : Conduct a search of the Registry of Corporate Affairs in the BVI

C : Request the details from the BVI Chamber of Commerce

D : Contact Company A directly

Answer: B

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