Annual AML Training And Testing

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Annual AML Training And Testing - Quiz

In this quiz on Annual AML Training and Testing, we’ll be taking a look at a handful of question regarding such topics as exposed persons, suspicious transactions, undue relationships, enhanced due diligence and much more. What can you tell us? Let’s find out right now!


Questions and Answers
  • 1. 

    If wealth is gotten in a foreign jurisdiction by a business activity that is illegal in The Bahamas, but not in the foreign jurisdiction, it would be illegal to accept the funds here

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    The statement is False because funds are accepted based on a premise that the funds were legally gotten in the home country; in spite of an activity being illegal within The Bahamas, should it be legal in the home country, and The Bahamas accepts that country as a business introducer, then it is legal to accept such funds within The Bahamas

    Rate this question:

  • 2. 

    Which of the following is not considered law subject to penalties, but for advice and direction which if ignored, may lead to sanctions under applicable law?

    • A.

      A) Laws

    • B.

      B) Regulations

    • C.

      C) Guidelines

    Correct Answer
    C. C) Guidelines
    Explanation
    The correct answer is C. Laws and Regulations are enforceable by penalties, while Guidelines are intended to present practical advice on how the bank licensee should conduct itself. In the absence of evidence that the bank is following advice, the regulator may conclude that the bank is carrying on business in a manner which may give rise to sanctions under the applicable law.

    Rate this question:

  • 3. 

    What component is the most important element in the prevention of money laundering?

    • A.

      A) The Laws

    • B.

      B) The Systems in Place

    • C.

      C) The People within the System

    Correct Answer
    C. C) The People within the System
    Explanation
    The correct answer is C. The most important component in the prevention of Money Laundering is the people who operate the systems intended to facilitate compliance with the laws. Without the people, the systems would be inoperable, and the laws unenforceable.

    Rate this question:

  • 4. 

    Our laws regarding money laundering is not specific to our geographical area, being the Caribbean and Americas, but follows international standards.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    The statement is True. Our laws are framed to follow international standards, and not specific to our geographical area.

    Rate this question:

  • 5. 

    Reputation risk refers to what type of publicity

    • A.

      A) Positive

    • B.

      B) Negative

    • C.

      C) Any kind

    Correct Answer
    B. B) Negative
    Explanation
    The correct answer is B. Risk to your reputation result from negative publicity, while positive publicitiy (answers A and C) should generally help your company.

    Rate this question:

  • 6. 

    Reputation Risk is measured by

    • A.

      A) Potential of an event occuring

    • B.

      B) Unlikelihood of an event

    • C.

      C) Actual events

    Correct Answer
    A. A) Potential of an event occuring
    Explanation
    The correct answer is A. Reputation Risk is measured by the potential that negative publicity about your company may result in negative consequences. Both B and C are incorrect, because Risk is measured in likelihood not unlikelihood, and not in actual events, but the potential that an event may occur.

    Rate this question:

  • 7. 

    Risk to your reputation may result from  a) Business decisions made in good faith b) Poor ethical decisions

    • A.

      A) A Only

    • B.

      B) B Only

    • C.

      C) Both A and B

    • D.

      D) None of the above

    Correct Answer
    C. C) Both A and B
    Explanation
    The correct answer is C. Decisions made in good faith and poor ethical decisions can result in risks to your reputation.

    Rate this question:

  • 8. 

    A bank with a tarnished reputation is more likely to lose customer accounts

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    The statement is True. A bank with a damaged reputation is more likely to lose accounts than one with its reputation intact.

    Rate this question:

  • 9. 

    The threats we face as a jurisdiction relate only to accepting the proceeds of crime

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    The statement is False. Our threats also include the use of funds within the system, and our reputation for competent customer service and a global partner in the effort against Money Laundering.

    Rate this question:

  • 10. 

    The effort to combat money laundering is cultural and specific to jurisdictions, and there is little global cooperation given the diversity of countries and cultures

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    The statement is False. The effort is global, with international bodies and standards, encouraging and enabling cooperation despite diversity of countries and cultures.

    Rate this question:

  • 11. 

    Reputation may be affected by a) Quality of clients accepted b) Quality of service offered

    • A.

      A) A only

    • B.

      B) B Only

    • C.

      C) Both A and B

    Correct Answer
    C. C) Both A and B
    Explanation
    The correct answer is C. Your reputation may be affected by both the quality of clients accepted, and the quality of service offered.

    Rate this question:

  • 12. 

    International initiatives are issued to achieve all of the following, except

    • A.

      A) Standard approaches

    • B.

      B) To engender cooperation

    • C.

      C) To share information

    • D.

      D) To impose law across jurisdictions

    Correct Answer
    D. D) To impose law across jurisdictions
    Explanation
    The correct answer is D, since international initiatives cannot impose law in foreign jurisdictions, but encourage the other three (A, B and C) which may result in laws being enacted within the foreign jurisdiction.

    Rate this question:

  • 13. 

    The Wolfsberg Principles were composed by a consortium of Compliance Officers

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    The statement is False. The Wolfsberg Principles were established by a consortium of 11 global banks.

    Rate this question:

  • 14. 

    The Financial Action Task Force (FATF) is

    • A.

      A) Composed of 25 member countries

    • B.

      B) Headquartered in Brussels

    • C.

      C) Made 40 Recommendations in 2003 used to measure effectiveness of AML regimes.

    Correct Answer
    C. C) Made 40 Recommendations in 2003 used to measure effectiveness of AML regimes.
    Explanation
    The correct answer is C, since both A (there are least 34 member countries) and B (it is headquartered in Paris) are incorrect.

    Rate this question:

  • 15. 

    The group of Financial Intelligence Units who collaborate for information sharing and assistance is called the

    • A.

      A) Egmont Group

    • B.

      C) FATF

    • C.

      C) EU Directive

    Correct Answer
    A. A) Egmont Group
    Explanation
    The correct answer is A, formed during 1995 for information sharing and exchange.

    Rate this question:

  • 16. 

    The overriding Act which makes money laundering unlawful within The Bahamas is the

    • A.

      A) Criminal Justice Act

    • B.

      B) Proceeds of Crime Act

    • C.

      C) The Evidence Act

    Correct Answer
    B. B) Proceeds of Crime Act
    Explanation
    The correct answer is B, the Proceeds of Crime Act which grants the authorities power over the proceeds of crime related to money laundering and connected purposes; both A and C relate to proceedings in foreign jurisdiction.

    Rate this question:

  • 17. 

    The Acts which do not deal specifically with foreign jurisdictional proceedings are

    • A.

      A) The Criminal Justice Act

    • B.

      B) The Evidence Act

    • C.

      C) The Financial Intelligence Unit Act

    Correct Answer
    C. C) The Financial Intelligence Unit Act
    Explanation
    The correct answer is C. the FIU Act grants power to enforce penalties within The Bahamas. Both A and B deal with foreign proceedings.

    Rate this question:

  • 18. 

    Should a staff member not report a suspicious transaction, they are in contravention of which legislation

    • A.

      A) The Financial Intelligence Unit Act

    • B.

      B) The Central Bank of The Bahamas Act

    • C.

      C) The Financial Transactions Reporting Act

    Correct Answer
    C. C) The Financial Transactions Reporting Act
    Explanation
    The correct answer is C. The FIU Act authorizes enforcement of penalties under the POCA, while The Central Bank of The Bahamas Act establishes the Central Bank as the regulatory body with defined duties and powers.

    Rate this question:

  • 19. 

    The regulatory bodies within The Bahamas (for the purpose of Money Laundering does not include

    • A.

      A) The Gaming Board

    • B.

      B) The Business Licensing Authority

    • C.

      C) The Insurance Commission

    Correct Answer
    B. B) The Business Licensing Authority
    Explanation
    The correct answer is B. The regulatory bodies include both The Gaming Board and the Insurance Commission; the Business Licensing Authority is concerned with the issuance of Business Licenses for specific activity, and has no role in regulating Money Laundering.

    Rate this question:

  • 20. 

    How is a prospective client best identified

    • A.

      A) By a passport

    • B.

      B) By a Drivers License

    • C.

      C) By a Credit Card

    Correct Answer
    A. A) By a passport
    Explanation
    The correct answer is A. A passport, being an accepted document for entry into foreign countries, is more complete than a driver's license, containing information such as Nationality, Home Address and Travel history. A credit card is not a valid ID.

    Rate this question:

  • 21. 

    Do the regulations allow you to rely on KYC procedures performed by third parties?

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    The statement is True. The regulations allow for reliance on KYC procedures performed by third parties who qualify as 'eligible introducers'

    Rate this question:

  • 22. 

    To be classified as an eligible introducer, local entities should be:

    • A.

      A) Licensed under a financial services regulator

    • B.

      B) A reputable law firm

    • C.

      C) Known to the bank

    Correct Answer
    A. A) Licensed under a financial services regulator
    Explanation
    The correct answer is A. Local entities licensed under a financial services regulator qualify as eligible introducers.

    Rate this question:

  • 23. 

    How does the home address on a utility bill, best assist in identifying the prospect

    • A.

      A) The bank may want to visit the prospect

    • B.

      B) The utility bill shows the monthly expenses

    • C.

      C) The home address coupled with the name is evidence of a place of residence

    Correct Answer
    C. C) The home address coupled with the name is evidence of a place of residence
    Explanation
    The correct answer is C. While the bank may want to visit the prospect, that is not the common reason for requesting a utility bill and personal visits are not the norm. Further the monthly expenses (b) has no real relevance.

    Rate this question:

  • 24. 

    Why is it so important to know that your client is the person they claim to be

    • A.

      A) Because it is the law

    • B.

      B) Because the relationship is based on the integrity of the representations

    • C.

      C) Because identity theft is quite common

    Correct Answer
    B. B) Because the relationship is based on the integrity of the representations
    Explanation
    The correct answer is B. The relationship to be established is based on the integrity of the representations made to the bank on the prospect and a complete reliance that the person is who they represent themselves to be.

    Rate this question:

  • 25. 

    Who are categorized as exposed persons?

    • A.

      A) Persons with credit exposures

    • B.

      B) Persons whose hidden dealings are discovered

    • C.

      C) Persons who have a level of influence, and are highly visible and accessible

    Correct Answer
    C. C) Persons who have a level of influence, and are highly visible and accessible
    Explanation
    The correct answer is C. Exposed persons are individuals who have a level of influence (authority, perceived immunities, means and resources) and due to their public office, are quite visible and accessible. Choices A and C are not valid descriptions of exposed persons in relation to AML.

    Rate this question:

  • 26. 

    To be labeled a PEP, one must be a Member of Parliament

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    The statement is False. Politically Exposed Persons are not limited to Members of Parliament.

    Rate this question:

  • 27. 

    Corporations, being non-personal entities, are held to a lesser standard in due diligence

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    The statement is False. Corporations (and beneficial owners) are held to similar standards in due diligence as personal prospects.

    Rate this question:

  • 28. 

    A company shows evidence of being duly formed by producing a

    • A.

      A) Certificate of Incorporation

    • B.

      B) Memorandum and Articles of Association

    • C.

      C) Register of Officers and Directors

    Correct Answer
    A. A) Certificate of Incorporation
    Explanation
    The correct answer is A. The issuance of a Certificate of Incorporation by a Registrar is proof of a duly formed company. Items B and C are documents which are required in forming a company, but not evidence that is has been registered.

    Rate this question:

  • 29. 

    What is enhanced due diligence?

    • A.

      A) When your company has special expertise in due diligence procedures

    • B.

      B) When you rely on due diligence procedures performed by others

    • C.

      C) When specific pre-defined circumstances occur, which demand increased due diligence

    Correct Answer
    C. C) When specific pre-defined circumstances occur, which demand increased due diligence
    Explanation
    The answer is C. Specific circumstances (which are defined) require enhanced due diligence, such as limited interaction with the prospect, an exposed person, a high risk country.

    Rate this question:

  • 30. 

    Less due diligence is required for charities and non-profit entities

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    The statement is False. Equal or greater due diligence is required for Charities and Non-profit entities.

    Rate this question:

  • 31. 

    Unincorporated entities compared to incorporated, attract an equal standard of due diligence.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    This statement is True. Equal due diligence is required whether the entity is incorporated or not.

    Rate this question:

  • 32. 

    Deposits may be accepted and placed on 'suspense' until the account is formally accepted.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    The statement is False. Deposits should be accepted only upon the account being duly accepted.

    Rate this question:

  • 33. 

    What is not considered an element of a new client profile?

    • A.

      A) Purpose of Account

    • B.

      B) Nature and size of assets

    • C.

      C) Account holder's political persuasion

    • D.

      D) Account holder's identification

    Correct Answer
    C. C) Account holder's political persuasion
    Explanation
    The correct answer is C. The client's political persuasion has no rlevant effect on the profile, except if the client is an exposed person. A, B and D are all factors in establishing a profile.

    Rate this question:

  • 34. 

    In considering a prospective client, the bank is more concerned with the source of wealth than the legal structure of the proposed entity.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    The statement is True. The origin and legality of the wealth being offered takes precedence to the legal structure being proposed.

    Rate this question:

  • 35. 

    Risk Rating assignment is required when the first transaction occur

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    The statement is False. Risk Rating assignment is required before the first transaction occurs.

    Rate this question:

  • 36. 

    The transaction monitoring program is most dependent on

    • A.

      A) The assigned risk rating

    • B.

      B) The frequency of deposits

    • C.

      C) The policies of the bank

    Correct Answer
    A. A) The assigned risk rating
    Explanation
    The correct answer is A. The transaction monitoring program should be structured in relation to the risk rating; higher risk rated accounts require more extensive monitoring. While B and C are relevant, they are not most relevant.

    Rate this question:

  • 37. 

    The Compliance Officer is duty bound to make reports of Suspicious Transaction Reports to the Financial Intelligence Unit.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    The statement is False. The MLRO is duty bound to report to the FIU, not the compliance officer.

    Rate this question:

  • 38. 

    How many years should a record of transactions be held according to the law

    • A.

      A) 5

    • B.

      B) 6

    • C.

      C) 7

    Correct Answer
    C. C) 7
    Explanation
    The correct answer is C. A transaction should be held for seven years after its process date.

    Rate this question:

  • 39. 

    An employee has a duty to report a transaction as a suspicious transaction when he/she a) Knows b) Suspects c) Is advised d) Has reasonable grounds to suspect  

    • A.

      A) A Only

    • B.

      B) A and C only

    • C.

      C) A B and D

    Correct Answer
    C. C) A B and D
    Explanation
    The correct answer is C.

    Rate this question:

  • 40. 

    Who do you report a Suspicious Transaction to in your office

    • A.

      A) The Board of Directors

    • B.

      B) The President of the Bank

    • C.

      C) The MLRO

    • D.

      D) Senior Management

    Correct Answer
    C. C) The MLRO
    Explanation
    The correct answer is C. Suspicious Transactions should be reported to the Money Laundering Reporting Officer.

    Rate this question:

  • 41. 

    There are generally three stages of money laundering

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    The statement is True. Placement, Layering and Integration

    Rate this question:

  • 42. 

    The best time to intercept a Suspicious Transaction is at the time of integration

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    The statement is False. The best time to intercept a Suspicious Transaction is at Placement.

    Rate this question:

  • 43. 

    The preferable and more effective transaction monitoring system is one that is

    • A.

      A) A combined automated and manual system

    • B.

      B) An automated system only

    • C.

      C) A fully manual system

    Correct Answer
    A. A) A combined automated and manual system
    Explanation
    The Correct answer is A. A combined automated system (which identifies transactions out of a profile) and manual (which investigates transactions identified) is more effective than separate systems.

    Rate this question:

  • 44. 

    Client accounts on the 'Watch-list' are normally considered Low to Moderate Risk

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    The statement is False. Clients on a 'watch list' are generally considered High Risk.

    Rate this question:

  • 45. 

    In determining whether a transaction is suspicious, the best question to ask is if the transaction is outside the profile

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    The statement is True.

    Rate this question:

  • 46. 

    In determining whether a transaction is suspicious, the employee should ask themselves which question

    • A.

      A) Does it make economic sense

    • B.

      B) What does my supervisor think

    • C.

      C) What have I been trained to consider

    • D.

      D) The state of the economy

    Correct Answer
    A. A) Does it make economic sense
    Explanation
    The correct answer is A. While B and C is recommended. D is not relevant.

    Rate this question:

  • 47. 

    Cash transactions which are broken into small segments, to comply with a limit requirement is referred to as

    • A.

      A) Phishing

    • B.

      B) Layering

    • C.

      C) Structuring

    • D.

      D) Tagging

    Correct Answer
    C. C) Structuring
    Explanation
    The correct answer is C.

    Rate this question:

  • 48. 

    Where undue relationships are forged with bank employees, a common objective is for the purpose of

    • A.

      A) Fraud through collusion

    • B.

      B) More efficient service

    • C.

      C) Negligence

    Correct Answer
    A. A) Fraud through collusion
    Explanation
    The correct answer is A. Most attempts to forge undue relationships with bank employees is for the intent to commit fraud.

    Rate this question:

  • 49. 

    In terminating a client relationship, a company should seek advice on its duty owed to a) The client b) Third parties c) The regulator

    • A.

      A) A only

    • B.

      B) B only

    • C.

      C) A and B only

    Correct Answer
    C. C) A and B only
    Explanation
    The correct answer is C. A. company should act to limit its liability to clients and third parties; and independent professional advice is recommended; with regard to the regulator, a company may simply consult the regulator with any queries.

    Rate this question:

  • 50. 

    Occasional transactions are permitted under law, and require proper identification and declaration of source of funds

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    The statement is True.

    Rate this question:

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