BSA/AML lesson Flashcards Preview

Foundations > BSA/AML lesson > Flashcards

Flashcards in BSA/AML lesson Deck (27)
Loading flashcards...
1
Q

BSA was designed to help identify the source, volume, and movement of currency through which of the following?

A

Requiring individuals, banks and other financial institutions to file currency transaction reports.

2
Q

Pursuant to the BSA, a bank includes which of the following

A
  • Credit unions
  • Savings and loan associations
  • Thrift Institutions.

Does NOT include branches of commercial banks in foreign countries

3
Q

Annunzio-Wylie Anti-Money Laundering Act

ONLY CIVIL

A

strengthened sanctions, including civil penalties, but did NOT impose criminal liability. The Money Laundering Control Act first imposed criminal liability for money laundering.

4
Q

Money Laundering Control Act of 1986

A

first imposed criminal liability for money laundering.

5
Q

Currency and Foreign Transactions Reporting Act

A

also known as the BSA, established requirements for record keeping and reporting by private individuals, banks and other financial institutions.

6
Q

Patriot Act

INCREASED. not first imposed which was done by Money Laundering control act

A

criminalized the financing of terrorism and increased both civil and criminal penalties for money laundering

7
Q

The Patriot Act

A
  • expanded the AML program requirements to all financial institutions;
  • increased civil and criminal penalties for money laundering;
  • required banks to respond to regulatory requests for information within 120 hours;
  • required the agencies to consider a bank’s AML record when reviewing bank mergers and acquisitions.

it did NOT develop the Suspicious Activity Report

8
Q

Pursuant to the Federal Reserve Board of Governors’ Regulation H, a bank must establish and maintain a BSA/AML compliance program that contains, at a minimum, which of the following element

A

The program must, at a minimum, include four elements, (1) a system of internal controls, (2) independent testing, (3) a designated individual that is responsible for day-to-day compliance, and (4) training for appropriate personnel.

it does not require to (1) protect customer from identity theft or (2) automate identification of suspicious transactions

9
Q

FinCEN

Financial Crimes Enforcement Network

A

the delegated administrator of the BSA. OFAC administers and enforces trade sanctions.

10
Q

OFAC-Office of Foreign Assets Control

A

administers and enforces trade sanctions.

administers and enforces trade sanctions based on U.S. foreign policy and national security goals against targeted foreign countries, terrorists and those engaged in activities related to the proliferation of weapons of mass destruction?

11
Q

As opposed to money laundering, the motivation behind terrorist financing is generally ideological.

A

True, The motivation for money laundering is generally profit seeking rather than ideological.

12
Q

Layering

A

involves the movement of funds around the financial system in a complex series of transactions to create confusion and complicate the paper trail.

13
Q

Civil penalties that may be imposed for violations of BSA/AML laws

A

Civil penalties include removal, forfeiture and civil money penalties

14
Q

Criminal penalties

A

may include forfeiture, but also include imprisonment and criminal money penalties.

15
Q

Legitimate funding sources, such as charitable donations, are used to finance terrorist organizations.

A

True. Terrorists generally finance their activities through both unlawful and legitimate sources.

16
Q

Pursuant to 18 USC 1956, a person convicted of money laundering can face up to 20 years in prison and a fine of up to $500,000.

A

True

17
Q

Placement

A

structuring currency deposits in amounts to evade reporting requirements or commingling currency deposits of legal and illegal enterprises

  • divide large amt below 10,000 in smaller bank accounts
  • purchase vacation package or insurance policy for refund
  • purchase cashier checks or money order, and deposit into other accounts
18
Q

Integration

A

create the appearance of legality by connection to a plausible explanation for sources of funds such as purchase and resale of real estate, investment securities, foreign trusts or other assets.

19
Q

Layering - paper trail
Placement - structure deposits
Integration - purchase and resale of real estate

A

describes a process for money laundering

20
Q

Federal Reserve’s Regulation H - 12 CFR 208.63(c)(2)

A

requires that state member banks provide for independent testing for compliance, which can be conducted by bank personnel if they are independent of the BSA/AML compliance function, or by an outside party. If the BSA compliance officer completes this test, it represents a conflict of interest and would be a violation of Regulation H

21
Q

BSA compliance officer, tellers and other employees who regularly deal with cash should receive more frequent and higher-level training.

A

True. All bank employees should have training and basic understanding, but appropriate personnel may need more frequent training

22
Q

The independent testing of a bank’s Bank Secrecy Act (BSA)/Anti-Money Laundering (AML) compliance cannot be performed by a telle

A

True

23
Q

A bank’s failure to file CTRs or the presence of errors on the CTRs could indicate an inadequate training program

A

True

24
Q

The BSA officer must first be knowledgeable of the BSA and all related regulations in order to ensure compliance.

A

The individual(s) must have the requisite authority and resources to administer an effective BSA compliance program. The title is not important as long as the authority is present and resources are available. A line of communication to senior management and the board is critical in order to keep them apprised of ongoing compliance with the BSA.

25
Q

12 CFR 208.63(c) of Regulation H states that the contents of the compliance program shall, at a minimum

A

(1) provide for a system of internal controls to ensure ongoing compliance; (2) provide for independent testing for compliance to be conducted by bank personnel or an independent party; (3) designate an individual or individuals responsible for coordinating and monitoring day-to-day compliance; and (4) provide training for appropriate personnel.

26
Q

A system of internal controls to ensure compliance with the BSA should do which of the following

A

Internal controls are the bank’s policies, procedures and processes designed to limit and control risks and, in this instance specifically, to achieve compliance with the BSA. Internal controls should provide for periodic updates to the bank’s risk profile, meet all regulatory recordkeeping and reporting requirements, and provide for timely updates in response to changes in regulations.

does NOT include training for personnel which is in a separate category

27
Q

The Federal Reserve System requires the U.S. branches, agencies and representative offices of the foreign banks they supervise that are operating in the United States to develop a written BSA compliance program.

A

The program must be approved by the respective bank’s board of directors and noted in the minutes, or approved by delegees acting under the express authority of their respective bank’s board of directors to give such approval.