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AML Trivia Flashcards | StudBud
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AML Trivia
AML Trivia
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ACAMS Connecticut Chapter's AML Trivia Night!
Flashcards
50 cards
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Practice quiz
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Host live
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Questions
50
Answers
1
Which of the following best describes the 2 step process for developing a BSA/AML risk assessment?
Identifying risk categories and implementing new products.
Identifying specific risk categories & analyzing the info to assess risks.
Hiring external consultants and conducting employee training.
Reviewing past audits and increasing marketing efforts.
2
The board is accountable for managing daily model inputs as part of their responsibilities in model risk governance.
False
True
3
OFAC has how many unique sanctions programs?
120
10
30
4
4
Which of the following typologies is associated with trade-based money laundering (TBML)?
Structuring of cash deposits
Use of shells companies in real estate
Over and under invoicing of goods
Use of prepaid cards
5
Which of the following is a primary objective of model validation under an effective model risk management framework?
To reduce the number of compliance checks for automated decisions
To verify the financial viability of outsourcing model components
To optimize return on investment for machine learning models
To assess whether the model meets its intended business purpose, and inputs
6
Which one of these is not considered one of the 5 pillars of AML Compliance?
Independent testing
Sanctions Screening Procedure
Employee training
Customer Due Diligence
Internal Policies
7
OFAC compliance only applies to U.S. citizens.
True
False
8
A beneficial owner under the CTA is defined as an individual who owns/ controls at least ___% of the company's ownership
10%
25%
50%
20%
9
Which of the following best describes the beneficial owner under FATF guidelines?
The person who manages day to day operations of a company
The nominee director appointed by a trust
The legal owner listed on the company's registration
The natural person(s) who ultimately owns or controls the legal entity
10
Which advanced analytics technique is increasingly used to detect synthetic identities in AML systems?
Linear discriminant analysis
Entity resolution with graph analytics
Time-series forecasting
Regression analysis
11
Under a sound model governance framework, when should model usage be restricted or supplemented?
Only after a regulatory citation
If the model has known limitations or failed validations
When model results align with internal limits
During holiday periods when volume is low
12
If a US dollar transaction between 2 non-US parties clears a US bank, it would not be subject to OFAC.
False
True
13
Maintaining a comprehensive model inventory with version control is a best practice in model governance documentation.
True
False
14
Which of the following is an example of a high-risk customer under AML guidelines?
Retired teacher with a pension
Local school PTA account
College student with a savings account
Politically Exposed Person
15
What is the primary purpose of the Bank Secrecy Act?
To regulate stock trading
To prevent identity theft
To detect and prevent money laundering
To track tax evasion
16
Which of the following is a challenge in sanctions screening for Fedwire messages?
Limited data fields for screening
Manual reconciliation
Lack of transaction volume
Real-time processing requirements
17
Which of the following is a primary purpose of conducting a BSA/AML Risk Assessment?
To evaluate employee performance
To ensure the bank's profitability
To identify/mitigate risks associated with AML/CTF
To comply with customer service standards
18
A core regulatory concern with Third-Party Payment Processors (TPPPs) is that they can:
Increase customer satisfaction with legacy systems.
Create layered relationships that obscure the nature of transactions.
Reduce the effectiveness of marketing tools in digital banking.
Enable Fintechs to avoid consumer protection regulations.
19
Which money laundering typology is particularly prevalent in online gambling platforms?
Use of prepaid gift cards
Structuring through ATM withdrawals
Real estate layering
Chip dumping and collusion
20
Which of the following is a key challenge in sanctions screening for non-Latin character names?
Transliteration inconsistencies
Overreliance on fuzzy logic
Use of single-word mononyms
Frequency of aliases
21
Who must be screened against the OFAC list?
Only foreign nationals
Only financial institutions
All individuals and entities doing business in the US
Only domestic companies
22
Under the 2024 Final Rule on Beneficial Ownership Reporting, which entities are exempt from reporting under the CTA?
Foreign-owned shell companies
All LLCs
Publicly traded companies meeting SEC requirements
Nonprofits
23
Under OFAC's 2024 Compliance Framework, which of the following is a component of a Sanctions Compliance Program?
Annual employee bonuses
Automated marketing tools
Outsourced sanctions screening
Internal controls tailored to risk profile
24
Which of the following best describes the relationship between BaaS platforms and Fintech firms?
Fintechs use BaaS to develop blockchain-based cryptocurrencies.
BaaS platforms allow Fintechs to work independent of any banking regulation
BaaS platforms offer Fintechs access to core banking services via APIs.
Fintech firms provide BaaS to traditional banks.
25
Which of the following is the best example of "integration" in the money laundering cycle?
Microstructuring cash deposits into a single financial institution
Movement of illicit funds through digital currencies to conceal funds
Patterns of high velocity B2B electronic transfers
Purchase of luxury assets like property, art work, jewelry, etc.
26
Which Federal Agency enforces OFAC regulations?
FBI
FinCEN
US Treasury Department
SEC
27
Which of the following is a typology involving the use of NFTs for money laundering?
Token staking
Flash loan arbitrage
Wash trading to inflate value
Cold storage flipping
28
Which one of the following cryptocurrencies holds a reputation for enhanced anonymity and reduced traceability?
Cardano (ADA)
Bitcoin (BTC)
Dogecoin (DOGE)
Monero (XMR)
29
Which AML vulnerability is unique to virtual credit cards?
Lack of customer interest
Inability to track physical location of use
High interest rates
Limited merchant acceptance
30
Which factors should a bank consider when identifying its risk categories?
The bank's employee satisfaction levels.
The bank's technological advancements.
The bank's marketing strategies.
The bank's products, services, customers and geographic locations.
31
The Bank Secrecy Act only applies to banks.
True
False
32
According to FinCEN, which 2 countries were identified in the subject address fields of fentanyl BSA reports?
India and Pakistan
Russia and Ukraine
Colombia and Venezuela
Mexico and the People's Republic of China
33
In the context of model governance, which of the following is responsible for approving the use and monitoring of models
Front-Line Business Users
Senior Management
Internal Audit
Independent Validation Function
34
Which of the following is a mitigation strategy for AML risks in credit card issuing?
Implementing real-time transaction monitoring with behavior analytics
Disabling international transactions
Reducing credit limits for all users
Offering unlimited credit lines
35
Virtual Asset Service Providers must file a SAR within 30 days of initially detecting facts of a suspicious transaction.
False
True
36
What is a key compliance challenge for prepaid card programs involving third party program managers?
High marketing costs
Lack of customer interest
Fragmented oversight and due diligence requirements
Inconsistent branding
37
Which of the following is a not a typical service provided by a BaaS platform?
Transaction monitoring
Compliance support
Account onboarding
Cloud infrastructure provisioning
38
FinCEN requires financial institutions to do what for backfiled/amended CTRs?
Take no additional action
When eFiling, select item 1 "incorrect/amend subsequent report"
Send a backup letter confirming that the reports have been backfiled/amend
Involve legal counsel
39
Which sanctions circumvention tactic uses non-sanctions intermediaries to conduct transactions for sanctioned entities?
Mirror trading
Nested correspondent banking
Third-party obfuscation
Front company layering
40
One potential risk of TPPP relationships is:
Reduced interest income from loans
Enhanced liquidity from non traditional lenders
Unclear customer identification responsiblities
Dilution of branding between Fintechs and banks
41
When should a bank update its BSA/AML risk assessment?
Annually, regardless of changes.
Every 5 years.
Only when instructed by regulators.
When there are changes in products, services, or geographic locations.
42
Which blockchain analysis technique is used to detect mixer usage for layering in crypto-based money laundering?
Tokenization
Dusting
Chain hopping and proof-of-stake validation
Transaction clustering and taint analysis
43
A bank is required by law to have a written BSA/AML risk assessment.
True
False
44
Money laundering usually involves three stages: placement, layering and integration.
True
False
45
A SAR must generally be filed within how many calendar days after detection of suspicious activity?
60
30
90
15
46
Structuring is a legal way to avoid tax reporting.
True
False
47
All employees at a financial institution must receive AML training at least annually.
True
False
48
All SAR filings are public and available online.
True
False
49
A financial institution is required to file a SAR even if the suspicious activity involves an employee.
False
True
50
Employees can tell customers if a SAR has been filed about them.
True
False
