A bank is preparing for its anti-money laundering independent review, which is performed every two years under the direction of the compliance officer. The bank’s corporate audit department will conduct the review. The compliance officer will review the final report before it is released to the Board of Directors.
What is the issue with this situation?

1. A. Independent reviews must be performed annually
2. B. The review must be performed by a group outside of the bank
3. C. The final report must be presented directly to the board of directors
4. D. There is a conflict of interest with the management of the review process

Correct Answer: A

What are two requirements with respect to supporting documentation that is used to identify potentially suspicious activity, according to Financial Action Task Force? (Choose two.)

1. A. It must be retained for at least five years
2. B. It must be retained for at least seven years
3. C. It must be kept in a manner so that it can be provided promptly
4. D. It must only be released to the government through a subpoena process

Correct Answer: AC

An institution is about to release a new peer to peer (P2P) funds transfer product to provide much needed remittance services to an under-banked population segment in the country.
The service allows customers to transfer funds through a mobile banking application to individuals worldwide entering only a name and mobile number. The new service charges less than comparable market solutions and offers real time transfer of funds. The customer onboarding process is conducted at branch locations with identity verification.
Which three present the highest anti-money laundering or sanctions risk and will require controls prior to launch? (Choose three.)

1. A. Customer onboarding
2. B. Cross-border functionality
3. C. Real time transfer of funds
4. D. Servicing the under-banked population
5. E. Limited access to counterparty information

Correct Answer: ACE

What are two risks to institutions for violating anti-money laundering laws as demonstrated by the 2012 HSBC settlement with United States authorities? (Choose two.)

1. A. Forfeiture of assets
2. B. Civil money penalties
3. C. Loss of bank charter/license
4. D. Imprisonment of bank employees

Correct Answer: AB

The USA PATRIOT Act requires United States (U.S.) financial institutions to collect certain information from non-U.S. banks that hold a correspondent account. Which two pieces of information must a non-U.S. bank provide to its U.S. correspondent to enable them to comply with this requirement? (Choose two.)

1. A. The name and address of all shell banks the bank maintains accounts for
2. B. The name and address of all beneficial owners who own 25% or more of the bank
3. C. Prompt notice of any suspicious activity it detects on any customer who uses the correspondent account
4. D. The name and address of a U.
5. E. person who is authorized to receive service of legal process for the bank

Correct Answer: BC