Amwal AML & Compliance Training
AML & Compliance Training recap quiz
- 1.
What is Money Laundering?
- A.
The process where gambling winnings is invested into financial markets.
- B.
The process where money exchange programs are setup.
- C.
The process where illegal gains are to 'cleaned' in order to hide the orgin of the cash.
- D.
The monthly pay process at Amwal.
Correct Answer
C. The process where illegal gains are to 'cleaned' in order to hide the orgin of the cash.Explanation
Money laundering is the process of disguising the origins of illegally obtained money by making it appear as if it came from legitimate sources. It involves a series of transactions and activities that aim to "clean" the money and make it appear legal. This is typically done to hide the illicit activities that generated the funds and to make it difficult for authorities to trace the money back to its illegal source. Money laundering can involve various methods and techniques, such as creating shell companies, using offshore accounts, and engaging in complex financial transactions.Rate this question:
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- 2.
What are the key stages in the Money Laundering process?
- A.
Integration, Leaving & Depositing
- B.
Depositing, Integration & Exchange
- C.
Placement, Harrassment & Substitution
- D.
Placement, Layering & Integration
Correct Answer
D. Placement, Layering & IntegrationExplanation
The correct answer is Placement, Layering & Integration. Money laundering involves three main stages: placement, layering, and integration. Placement refers to the process of introducing illicit funds into the financial system, often through cash deposits or transfers. Layering involves complex transactions and movements of funds to obscure the audit trail and make it difficult to trace the origin of the money. Integration is the final stage where the laundered funds are reintroduced into the legitimate economy, appearing as legitimate assets or investments. This three-stage process is commonly used by criminals to disguise the illicit origins of their funds.Rate this question:
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- 3.
What is a 'STR' and what is the process of 'flagging' a STR?
- A.
'Sound Transaction Record' and inform Sateesh in IT.
- B.
'Secret Terms Record' and inform MLRO who investigates and informs QCB.
- C.
'Strange Transaction Record' & inform the MLRO who investigates and reports to the FIU.
- D.
All the above.
Correct Answer
C. 'Strange Transaction Record' & inform the MLRO who investigates and reports to the FIU.Explanation
The correct answer is 'Strange Transaction Record' and inform the MLRO who investigates and reports to the FIU. This is the process of flagging a STR. When a strange or suspicious transaction is identified, it is recorded as a STR. The MLRO (Money Laundering Reporting Officer) is responsible for investigating these transactions and reporting them to the FIU (Financial Intelligence Unit) for further action.Rate this question:
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- 4.
What is CFT?
- A.
Crimes Financial Testing
- B.
Combating the Financing of Terrorism
Correct Answer
B. Combating the Financing of TerrorismExplanation
CFT stands for Combating the Financing of Terrorism. This term refers to the efforts made by governments and international organizations to prevent and disrupt the financial support provided to terrorist groups. It involves various measures such as monitoring financial transactions, freezing assets, and implementing regulations to prevent money laundering and terrorist financing activities. The goal is to cut off the funding sources of terrorist organizations and hinder their ability to carry out attacks.Rate this question:
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- 5.
Who is the Deputy MLRO?
- A.
Danielle Chackar
- B.
Fahmi Alghussein
- C.
Hani Abdo
- D.
Sami Boujelben
Correct Answer
A. Danielle ChackarExplanation
Danielle Chackar is the Deputy MLRO because she is the only name mentioned in the options provided.Rate this question:
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- 6.
When should KYC be initiated with a new client?
- A.
At an early stage after about the 2nd/3rd meeting?
- B.
Near the latter stages prior to signing a contract?
- C.
When you have time?
- D.
After signing a contract?
Correct Answer
A. At an early stage after about the 2nd/3rd meeting?Explanation
KYC (Know Your Customer) should be initiated with a new client at an early stage after about the 2nd/3rd meeting. This allows the company to gather necessary information about the client, such as their identity, financial status, and risk profile, in order to assess the potential risks associated with the business relationship. By conducting KYC early on, the company can make informed decisions and ensure compliance with regulatory requirements before entering into a contract or providing any services to the client.Rate this question:
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- 7.
What are the basic requirements of KYC and basic CDD?
- A.
To identify, verify and assess.
- B.
To identify, have lunch with and take their money.
- C.
To identify, verify and record.
- D.
To run WorldCheck and Google checks.
Correct Answer
A. To identify, verify and assess.Explanation
The basic requirements of KYC (Know Your Customer) and basic CDD (Customer Due Diligence) involve the processes of identifying, verifying, and assessing the customer. This means that financial institutions and other businesses need to gather information about their customers, confirm their identities, and evaluate their potential risks in order to prevent money laundering, fraud, and other illicit activities. By following these requirements, businesses can ensure compliance with regulations and maintain the integrity of their operations.Rate this question:
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- 8.
When carrying out CDD at what point do we stop?
- A.
The direct client we are dealing with.
- B.
The direct client plus immediate major shareholders.
- C.
The ultimate major Beneficial Owner(s).
- D.
When it becomes too boring or tedious.
Correct Answer
C. The ultimate major Beneficial Owner(s).Explanation
The correct answer is "The ultimate major Beneficial Owner(s)." This means that when conducting Customer Due Diligence (CDD), we stop at the point of identifying and verifying the ultimate major Beneficial Owner(s) of the client. This is important because the ultimate major Beneficial Owner(s) are the individuals who ultimately benefit from or control the client, and knowing their identity is crucial for assessing any potential risks associated with the client's activities.Rate this question:
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- 9.
When assessing a client as per QCRA regulations we must follow a.....
- A.
'Risky but Exciting Approach'
- B.
'Risk Based Approach'
- C.
'Legal, Compliant and Financial Approach'
- D.
The rules of Law 29 of the State of Qatar 2005
Correct Answer
B. 'Risk Based Approach'Explanation
The correct answer is 'Risk Based Approach'. When assessing a client as per QCRA regulations, it is important to follow a risk-based approach. This means that the assessment process should be guided by the level of risk associated with the client or the transaction. This approach allows for a more targeted and efficient assessment, focusing resources on higher-risk areas while minimizing unnecessary scrutiny on low-risk areas. It helps ensure that compliance efforts are proportionate to the level of risk, promoting effective risk management and regulatory compliance.Rate this question:
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- 10.
Customer Due Diligence (CDD) is the responsibility of.......
- A.
Compliance
- B.
Risk
- C.
Customer Facing Staff
- D.
Operations
Correct Answer
C. Customer Facing StaffExplanation
Customer Due Diligence (CDD) refers to the process of verifying the identity of customers and assessing the potential risks associated with their business relationships. It involves gathering relevant information about customers to ensure compliance with regulations and to prevent money laundering, fraud, and other illicit activities. Customer Facing Staff are responsible for directly interacting with customers and collecting the necessary information for CDD purposes. They play a crucial role in conducting due diligence checks, maintaining accurate records, and reporting any suspicious activities to the compliance or risk departments.Rate this question:
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- 11.
After a risk assessment it is decided to carry out 'Enhanced Due Diligence' as the company was found to have foreign 'PEPs' on the board. What scope of work would suffice in reviewing the client?
- A.
Google/Internet/News searches. To verify source of funds. Regular reviews. Assessment and checks on the PEPs immediate family and known colleagues/friends/companies. MLRO sign off and risk rating.
- B.
Wikipedia checks and World checks. MLRO sign off.
- C.
Spy on the PEP and bug his home. MLRO sign off.
- D.
Checking bank statements and asking for police reports. MLRO sign off and risk rating.
Correct Answer
A. Google/Internet/News searches. To verify source of funds. Regular reviews. Assessment and checks on the PEPs immediate family and known colleagues/friends/companies. MLRO sign off and risk rating.Explanation
The correct answer includes a comprehensive scope of work that would suffice in reviewing the client. It involves conducting Google/Internet/News searches to gather information about the client, verifying the source of funds, conducting regular reviews, and assessing and checking the immediate family, known colleagues/friends/companies of the politically exposed persons (PEPs) on the board. The MLRO (Money Laundering Reporting Officer) needs to sign off on the findings and a risk rating should be assigned. This approach ensures a thorough evaluation of the client's background and potential risks associated with their involvement with PEPs.Rate this question:
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- 12.
After starting a business relationship with a client which of the following would cause concern and be a 'Red Flag'?
- A.
Unrealistic wealth compared to profile.
- B.
Trades with no/little benefits and losses without concern.
- C.
Large/rapid movement of funds.
- D.
All the above.
Correct Answer
D. All the above.Explanation
All of the above options would cause concern and be considered a 'Red Flag' when starting a business relationship with a client. Unrealistic wealth compared to their profile could indicate potential fraudulent activity or misrepresentation. Trading with no or little benefits and losses without concern may suggest a lack of regard for financial stability or a disregard for risk management. Large or rapid movement of funds could indicate money laundering or other illegal activities. Therefore, all of these scenarios would raise concerns and be considered red flags.Rate this question:
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- 13.
If a QGF retail client comes to the office how should Amwal LLC deal with them?
- A.
Can give financial advise as already a client?
- B.
Can offer to 'opt up' the client if they qualify? Otherwise can have a 'factual' conversation without financial advise.
- C.
Cannot speak to them at all and politely ask them to leave.
- D.
Offer them tea and have a nice catch up.
Correct Answer
B. Can offer to 'opt up' the client if they qualify? Otherwise can have a 'factual' conversation without financial advise.Explanation
Amwal LLC should offer to 'opt up' the client if they qualify, which means upgrading their services or products based on their eligibility. If the client meets the criteria, Amwal LLC can provide them with additional financial advice and assistance. However, if the client does not qualify, Amwal LLC can still engage in a 'factual' conversation with them, providing information and answering their queries without offering any specific financial advice.Rate this question:
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- 14.
On what basis can a Retail client be opted up?
- A.
If they work for a financial institution and have enough skills and experience.
- B.
If they have over $1m in liquid assets.
- C.
If they have over $1m in liquid assets and the firm is satisfied that they have sufficient knowledge and understanding to invest.
- D.
All the above.
- E.
A & C only.
Correct Answer
E. A & C only.Explanation
A retail client can be opted up if they work for a financial institution and have enough skills and experience, or if they have over $1m in liquid assets and the firm is satisfied that they have sufficient knowledge and understanding to invest. This means that both options A and C are correct, as they both satisfy the criteria for a retail client to be opted up. Option B, which states that having over $1m in liquid assets alone is sufficient, is not correct as it does not consider the client's knowledge and understanding of investing.Rate this question:
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- 15.
Which of the following is NOT a 'high risk' customer?
- A.
Cash intensive business eg money transfer, casinos etc.
- B.
Customers with complex structures that make identifying ownership difficult.
- C.
A PEPs stockbroker.
- D.
A customer whose ownership structure is through 'bearer shares'.
Correct Answer
C. A PEPs stockbroker.Explanation
A PEPs stockbroker is not considered a 'high risk' customer because PEPs (Politically Exposed Persons) are individuals who hold prominent public positions, such as government officials or heads of state, and their stockbrokers are not inherently high risk. While PEPs themselves are considered high risk due to their potential for corruption or money laundering, their stockbrokers are not automatically categorized as high risk customers. The other options listed in the question, such as cash intensive businesses and customers with complex ownership structures, are considered high risk due to the potential for money laundering or illicit activities.Rate this question:
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- 16.
Which one of the following is NOT a 'low risk' customer?
- A.
Other regulated financial institutions.
- B.
Listed Companies.
- C.
Government and Public Authorities.
- D.
Charities.
Correct Answer
D. Charities.Explanation
Charities are not considered "low risk" customers because they typically deal with large amounts of money and donations, making them potential targets for money laundering or fraudulent activities. Unlike other regulated financial institutions, listed companies, and government/public authorities, charities may have less stringent financial controls and oversight, making them more susceptible to financial crimes. Therefore, charities are not categorized as "low risk" customers in terms of financial transactions.Rate this question:
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- 17.
Which of the following is NOT a benefit of a 'Risk Based Approach'?
- A.
Its more flexible, as risks vary across juridictions, customers, products and delivery channels.
- B.
Its more effective - Firms can assess and mitigate risks at a more personal level.
- C.
Its more proportionate - more common sense than a 'tick the box' approach.
- D.
It is a fool proof system.
Correct Answer
D. It is a fool proof system.Explanation
The given correct answer states that "It is a fool proof system" is NOT a benefit of a 'Risk Based Approach'. This means that a risk-based approach is not a foolproof system. A risk-based approach acknowledges that there will always be some level of risk involved and focuses on assessing and mitigating those risks at a more personal level. It is more flexible, effective, and proportionate compared to a 'tick the box' approach. However, it is not a foolproof system, as it cannot completely eliminate all risks.Rate this question:
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- 18.
Who does Compliance Responsibility lie with?
- A.
Board of Directors
- B.
Senior Management & Staff
- C.
Compliance Office
- D.
All of the Above
Correct Answer
D. All of the AboveExplanation
The responsibility for compliance lies with all of the above options, including the Board of Directors, Senior Management & Staff, and the Compliance Office. Compliance is a shared responsibility that involves the entire organization, from top-level executives to frontline employees. The Board of Directors sets the tone at the top and establishes policies and procedures to ensure compliance. Senior Management and staff are responsible for implementing these policies and procedures and ensuring that they are followed. The Compliance Office provides guidance, oversight, and support to ensure that the organization complies with all relevant laws, regulations, and internal policies.Rate this question:
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- 19.
The QFCRA 'Competency and Training' regime came into affect in January 2014. What does this mean for Amwal?
- A.
That all staff need driving licenses.
- B.
That all staff must have nice CVs.
- C.
That the firm monitors the ongoing training and competency of staff.
- D.
The firm monitors the diets of all staff.
Correct Answer
C. That the firm monitors the ongoing training and competency of staff.Explanation
The QFCRA 'Competency and Training' regime coming into effect in January 2014 means that Amwal is required to monitor the ongoing training and competency of its staff. This implies that the firm must ensure that its employees are continuously trained and competent in their respective roles. The regime does not have any relation to driving licenses, CVs, or staff diets.Rate this question:
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- 20.
When 'Opting Up' a client what criteria must they fulfill......
- A.
Be a listed Company.
- B.
Be a retail Client
- C.
A Retail Client who has $1m in net assets and sufficient knowledge to transact.
- D.
Must be a really nice, smiley person. Who we all like!
Correct Answer
C. A Retail Client who has $1m in net assets and sufficient knowledge to transact.Explanation
The correct answer is "A Retail Client who has $1m in net assets and sufficient knowledge to transact." This is because when a client "Opts Up," they are choosing to move from being a retail client to a higher level of service that is typically reserved for clients with a higher net worth and more investment knowledge. Therefore, the client must meet the criteria of having at least $1 million in net assets and the necessary knowledge to engage in transactions at this level.Rate this question:
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Current Version
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Mar 21, 2023Quiz Edited by
ProProfs Editorial Team -
Jun 12, 2013Quiz Created by
ZahidAslam786
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