Anti-Money Laundering & KYC Flashcards
7 cards from real RCMS practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Anti-Money Laundering & KYC flashcards as text
A compliance officer discovers that a long-standing client recently appeared on the OFAC SDN list. What is the immediate required action?
Answer: Block the account and file a report with OFAC as soon as possible
Matching the OFAC SDN list requires immediate blocking of assets and reporting to OFAC — no advance notice to the customer is permitted.
What is the 'tipping off' prohibition in AML law?
Answer: Prohibition against informing a customer or subject that a SAR has been filed about them
Tipping off — disclosing to a subject that a SAR has been or may be filed — is prohibited under federal law to protect the integrity of investigations.
Which of the following best describes 'integration,' the third stage of money laundering?
Answer: Re-introducing laundered money into the economy in a way that appears legitimate
Integration is the final stage where laundered funds re-enter the legitimate economy, making their illicit origin nearly impossible to trace.
Under the USA PATRIOT Act Section 314(b), financial institutions may voluntarily share information with each other for what purpose?
Answer: To identify and report activities that may involve money laundering or terrorism financing
Section 314(b) allows financial institutions to share information voluntarily with one another to identify and report money laundering and terrorist financing.
What is the primary risk associated with correspondent banking relationships from an AML perspective?
Answer: Nested relationships allowing high-risk respondents access to the financial system without proper vetting
Nested correspondent banking allows respondents to bring in their own customers, potentially including high-risk or sanctioned parties, without adequate due diligence.
A casino reports that a patron repeatedly exchanges chips for cash in amounts just under $10,000 over a single day. What should the casino's AML compliance officer do?
Answer: Aggregate the transactions and file a CTR because casino regulations require aggregation
Casinos must aggregate transactions by a single patron within a gaming day and file a CTR if the aggregate exceeds $10,000.
Which element is NOT typically part of an effective AML compliance program under the BSA's 'four pillars'?
Answer: Mandatory customer profit-sharing disclosures
The BSA's four pillars are internal controls, a designated BSA officer, employee training, and independent testing — profit-sharing disclosures are not included.