CCP Assessment

Welcome to your Assessment.

Number of Questions: 100

Time Allowed: 180 minutes.

You are allowed only one (1) attempt.

NAME

ORGANISATION

Risk assessment in AML/CFT Compliance is very important in order to ………………. compliance and related risks using risk management techniques and principles to protect the FI and DNFBPs, except;

A. Identify

B. Assess

C. Control

D. Ignore

E. Manage

What was the self-service laundries which were cash-based business that the early money launderers in USA used to largely legitimise their illicit earnings called?

A. Moneylaundros

B. Moneylaundromat

C. Moneylaundersmat

D. Laundromoney

E. Laundromats

CBN AML/CFT Manual (as amended) defined Politically Exposed Persons (PEPs) as;

A. Individuals who are or have been entrusted with prominent public functions both home and abroad

B. Individuals who are or have been entrusted with prominent private functions both home and abroad

C. Individuals who are or have been entrusted with prominent public functions abroad

D. Individuals who are or have been entrusted with prominent market functions both home and abroad

E. Individuals who are or have been entrusted with prominent professional functions both home and abroad

It is important to continuous monitor transactions and activities of these categories of customers that are described as high risk to ascertain the following except;

A. The source

B. Relationship with Governor of the state

C. Origin

D. Purpose

E. Destination of transactions

In relation to wire transfers, FIs are expected to among other things, adopt the following measures except;

A. Gather and retain adequate information about the originator and beneficiary of wire transfer transactions

B. Report Foreign Transfer (FTR) of amount above specified threshold and Suspicious Transaction (STR) where necessary

C. Inform the beneficiary of suspicious wire transfers about the STR the FI is about to or has filed

D. Avoid conducting wire transfer transactions for designated entities and persons

E. Take freezing actions where necessary

The Components of Compliance include the following except

A. Development and Maintenance of Written Policies and Procedures

B. Designation of a Compliance Officer

C. Development of an Effective Compliance Training, Education and Awareness Programme

D. Establishment and Maintenance of a Process for Routinely Evaluating and Identifying Potential and Actual Non-Compliance

E. None of the above

According to FATF Recommendation 21, FIs & DNFBPs should put in place measures to protect the confidentiality of such staff where they have made their suspicious transaction report to appropriate units/department in good faith and sanction any staff against tipping-off that does any of the following;

A. informs

B. counsels or

C. warns a customer about any report made to the FIU or an on-going investigation concerning such customer’s transaction

D. A, B and C

E. A, B and C

According to FATF, Terrorist financing is the financing of terrorist acts, and of terrorists and terrorist organisations. Terrorist financing provides funds for terrorist activities. The funds are from the following sources;

A. Legitimate sources

B. Legitimate and illegitimate sources

C. Legitimate personal donations and profits

D. Businesses and charitable organizations

E. Criminal sources such as illicit drug trade, the smuggling of weapons, fraud, kidnapping, extortion and other illegal sources

Recommendation 2 of FATF is about which of the following;

A. Ultimate Beneficial Owner (UBO)

B. Politically Exposed Persons,

C. National Co-operation and Co-ordination,

D. Customer Due Diligence

E. Correspondent Banking

In the Rules of Engagement in AML/CFT Compliance, the following are important part of it except;

A. The FI or DNFBP should establish written AML/CFT policies and procedures

B. The Board should approve the AML/CFT policies and procedures of the FI or DNFBP

C. The FI or DNFBP should review/update the AML/CFT policies and procedures at least every 3 years

D. The FI or DNFBP should communicate the AML/CFT program to all employees and directors

E. The FI or DNFBP should engage the entertainment industry to organize social events every month-end.

In Information and Communication Technology (ICT) crimes, the computer is used to target the following crimes except;

A. DOS Attack

B. Armed Robbery

C. Virus Attack

D. Hacking

E. A, B and C

Responding to a Law Enforcement Investigation - The first rule when confronted with a law enforcement investigation is to;

A. Respond quickly and completely to all requests

B. Do not ignore, defer or otherwise put aside or delay responding to a law enforcement inquiry or request for documents

C. Inform appropriate senior management, staff should be designated to handle and update senior management.

D. Retain qualified, experienced legal counsel if the enquiry is on the institution.

E. All of the above

The following are drivers of de-risking, except;

A. Perceived or Assessed Risk

B. Client/Customer Profitability

C. Increased compliance costs and Pressures

D. Rising Fines and Penalties

E. Growing number of FATF-Styled Regional Bodies (FSRBs)

The following are the best Practices for PEPS and FEPS except;

A. Identification of all PEPS/FEPS

B. Reserve the decision to open account to senior management or get senior management approval

C. Contact PEP/FEP to inform him/her when you are filing regulatory reports

D. Investigation of the source of funds

E. Use third party confirmation - internet searches, confirming houses, credit agencies

There is an increasing wave of vulnerabilities on the part of financial institutions and DNFBPs to cybercrime and the sources of threats and vulnerabilities are from;

A. Products and Services

B. Customers

C. Employees and Directors

D. Compliance

E. All of the above

The Payable-through-accounts which are also known as “pass through” or “pass-by” accounts can be said to be a situation where:

A. The correspondent bank officers can delightfully pay their flight ticket for a visit to respondent bank offices during overseas trips.

B. The respondent bank allows its customers to access the correspondent account directly to conduct business on their own.

C. The officers of both correspondent bank and respondent bank are passers-by in in foreign jurisdictions

D. The Central Bank allows a dedicated account to serve PEPs as High Net-worth Individuals (HNIs)

E. The correspondent Bank and Respondent Bank can allow Payable-through, Pass-through or Pass-by accounts to be opened for any person from developing countries particularly Africa in order for financial inclusion purpose

Financial institutions and DNFBPs should put in place high level AML/CFT Compliance policy on the prevention of money laundering and protection of the institutions and/or its employees from the following risk except

A. Reputational risk

B. Operational risk

C. Concentration risk

D. Technology risk

E. Legal and Regulatory risk

Risk management deals with the process of recognizing, mitigating and reviewing compliance risks which also include;

A. Money laundering and Natural disaster

B. Money laundering and terrorist financing risk

C. Laundering risk only

D. Terrorist financing risk only

E. Money laundering and concentration risk

The following are within the category of high risk customers;

A. Customers with high volume of cash deposits/transactions

B. PEPs & FEPs (including their families & close associates)

C. A public quoted limited liability company

D. Businesses dealing in fast moving goods (e.g. consumer and Household products)

E. All Designated Non-Financial Businesses and Professions (DNFBPs), Dealers in luxurious items i.e. jewelleries, precious stones, cars, etc.

Under Recommendation 33, FATF recommends that countries should maintain comprehensive statistics on matters relevant to the effectiveness and efficiency of their AML/CFT systems. This includes keeping statistics on the following:

A. STRs, received and disseminated;

B. ML/TF investigations, prosecutions and convictions;

C. Property frozen; seized and confiscated

D. Mutual legal assistance or other international requests for co-operation made and received

E. All of the above

The evil or consequences of money laundering and/or terrorist financing and/or financing of proliferation of Weapons of Mass Destruction (WMD) are far-reaching and can disrupt and dislocate social, security, political, and economic activities and they include the following except;

A. Increased Crime and Corruption,

B. Staff insubordination

C. Undermines the Legitimate Private Sector

D. Weakening Financial Institutions

E. Termination of correspondent banking facilities

One of the New Hires in your bank that has recently been trained stated in the course of your monthly Departmental meetings that; ‘Correspondent banking relationship involves the use of Nostro (an account held by a bank in foreign currency in another bank). In other words, from the respondent bank view, the funds deposited at correspondent banks are referred to as Nostro accounts’. Considering the expression of this New Hire in relation to the terminology, Nostro, as indicated above, which of the following statements below is correct about his assertion of Nostro;

A. Yes, it is true.

B. No, it is not true.

C. Central Bank holds meeting with FI to give interpretation

D. It depends on the interpretation by the affected Financial Institution

E. The Foreign Currency (FX) in the account must be transferred to Foreign Reserve

The risk assessment process consists of the following stages:

A. Identify inherent risk, Set Risk Tolerance, Create Risk Reduction Measures and Controls

B. Identify inherent risk, Set Risk Tolerance, Create Risk Reduction Measures and Controls

C. Identify inherent risk, Set Risk Tolerance, Create Risk Reduction Measures and Controls, evaluate residual Risk, Determine profit target

D. Identify inherent risk, Set Risk Tolerance, Create Risk Reduction Measures and Controls, Evaluate residual Risk, Implement Risk-Based Approach and Review

E. Identify inherent risk, Set Risk Tolerance, Create Risk Reduction Measures and Controls, Review profit targets, carve a market niche

If an employee exaggerates the credentials, background or financial ability and resources of a customer in written reports that the bank requires, for instance for credit appraisal; this is referred to a what in AML/CFT compliance;

A. Bad behaviour

B. Redflag

C. Misdemeanour

D. Misrepresentation

E. Innocent mistake

The sources of ML/TF threats include:

A. Customers

B. Location/geography/jurisdiction

C. Law Enforcement agents

D. Products & services

E. Delivery channels and technology

Some basic Information in relation to individual customers include;

A. General Information – Name, Date of Birth, Contact details, Segment, Staff Indicator, E-Banking Access, Household, Group ID, Relationship Manager, Access Segment, etc

B. Personal information – the customer’s relationship with spouse and children, neighbour, etc.

C. Demographics – Nationality, Marital Status, Hold Mail, Educational Qualification, Employment details, Income and Expenses, etc.

D. Psychographic – Campaign preferences, membership information, Hobbies, Relationships, Asset information, Product preferences, Transaction plan, etc.

E. Other Bank Information – Bank accounts, Credit card accounts, etc.

The four (4) pillars of Customer Due Diligence (CDD) are as follows except;

A. Customer Acceptance Policy (CAP)

B. Review of Logical and Physical Access (RLPA)

C. Customer Identification Procedure (CIP)

D. Monitoring of Transactions/Activities (MoTA)

E. Risk Management (RM)

Some of the basic concepts of risk are except;

A. Threat and Vulnerability

B. Risk universe

C. Personal risk

D. Inherent risk and Residual risk

E. Risk appetite and Risk tolerance,

Under Recommendation 2, FATF recommends the following except:

A. Countries should have national AML/CFT policies which are informed by the risks identified, and are regularly reviewed.

B. Countries should designate an authority or have a co-ordination or other mechanism that is responsible for national AML/CFT policies.

C. Mechanisms should be in place to enable policy makers, the Financial Intelligence Unit (FIU), law enforcement authorities, supervisors and other relevant competent authorities to co-operate, and where appropriate, co-ordinate domestically with each other concerning the development and implementation of AML/CFT policies and activities. Such mechanisms should apply at both policymaking and operational levels.

D. AML/CFT Compliance responsibilities should be the responsibilities of the Executive arm of government alone and they should jail or charge perceived money launderers and terrorist financiers to court as they desire.

E. Competent authorities should have similar co-operation and, where appropriate, coordination mechanisms to combat the financing of proliferation of weapons of mass destruction.

If the law enforcement agency or a prosecutor obtains a court order to retrain or freeze an account or to prevent funds from being withdrawn or moved, the institution should;

A. Obtain a copy of the order

B. Comply with the restraining or freezing order timely

C. Question the freezing order and do not be in a haste as nothing will happen if delayed

D. Obtained a copy of sworn affidavit, which is sometimes included with the order for additional clues

E. Obtained a copy of sworn affidavit, which is sometimes included with the order for additional clues

It is said that all civilised societies have long been fighting money laundering even before the term money laundering was coined. The following are some of the ways the authorities had been fighting money laundering except;

A. Observed activities of people to ensure they were legitimate

B. Where people were found to be engaging in illegal activities, the authorities moved after them, for identification and arrest

C. Traced the illicit funds and/or assets even when their forms have been changed or converted

D. Identify the money launderers and encourage them to utilize their humongous wealth to support the activities of government and promote good wellbeing of the people.

E. Confiscate the assets and prosecute the criminals and/or money launderers to ensure they are punished according to law to serve as a deterrent to others.

Compliance function is the responsibility of the following groups;

A. The Board alone

B. Top management alone

C. Senior Management alone

D. Middle Level Management alone

E. Entire staff

Except in one of the following instances, terrorist financiers use techniques similar to those of money launderers to achieve their malevolent and destructive goals by

A. Evading authorities' attention

B. Protecting the identity of their sponsors

C. Making financial transactions to be smaller in amounts when compared to that of money laundering

D. Exposing the source of funds and targets for terror attacks

E. Ensuring detection and tracking of terrorist funds is more difficult

The Compliance Department can choose any or more than one of the following media to communicate to the entire institution except;

A. Compliance handbook, Newsletter or periodicals

B. Compliance awareness

C. Sharing of hand bills at the motorpark

D. Compliance Screen savers and Titbits

E. Compliance eLearning

Court Order is usually issued by Court empowering a law enforcement agency to compel the production of documents and testimony. The documents and testimony are designed to allow the law enforcement agency to;

A. Investigate suspicious transactions

B. Allow law enforcement agents develop cordial relations with the alleged suspect

C. Gather information and details of the matter under investigation

D. develop evidence

E. Prosecution

One of the following is not part of FATF recommendations in relation to Confiscation and Provisional Measures under Recommendation 4 which states that Countries should have measures, including legislative measures, that enable their competent authorities to:

A. Identify, trace and evaluate property that is subject to confiscation

B. Carry out provisional measures, such as freezing or seizing, to prevent any dealing, transfer or disposal of property subject to confiscation

C. Take steps that will prevent or void actions that prejudice the country’s ability to freeze or seize or recover property that is subject to confiscation

D. Take any appropriate investigative measures

E. Ensure that the property that is a product of crime can only be confiscated if the money launderer did not put it to proper economic use.

To ensure proper rule of engagement in AML/CFT compliance, an FI or DNFBP should also ensure practices which of the following;

A. There should be policy to protect employees when they report suspicious transactions in good faith

B. There should be policy on the imposition of sanctions on employees that do not adhere to the monitoring and reporting policies and procedures of the FI or DNFBP

C. The FI or DNFBP should make sure that the Internal Audit Dept. have the competency to conduct oversight on AML/CFT compliance function

D. There should be independent audit of compliance by external consultant every 3 years

E. All of the above

The following are redflags associated with an employee except;

A. Employee is involved in an excessive number of unresolved exceptions.

B. Employee lives a lavish lifestyle that could not be supported by his or her salary

C. Employee takes some nap or rest during break periods

D. Employee frequently overrides internal controls or established approval authority or circumvents policy

E. Employee uses company resources to further private interests

Which of the following are regulatory approaches;

A. Rule-Based Regulation, Principle-Based Regulation and Out-Based Regulation

B. Sanction-Based Regulation, Principle-Based Regulation and Out-Based Regulation

C. Fine-Based Regulation, Principle-Based Regulation and Out-Based Regulation

D. Penalty-Based Regulation, Principle-Based Regulation and Out-Based Regulation

E. None of the above

Compliance risks include the following risks except;

A. Reputational risk

B. Legal risk

C. Regulatory risk

D. Financial risk

E. All of the above

In what year did FATF align its Recommendations from what was known as the 40+9 to only 40 Recommendations?

A. February 2013

B. February 2016

C. February 2014

D. February 2012

E. February 2015

In order to ensure compliance with record-keeping and retention regulatory requirements, an FI and DNFBP should adhere to which of the following;

A. Maintain customers in digital and hard copies

B. Maintain transactions records digital and hard copies

C. Retain the records for at least 5 years after severance of relationship

D. Maintain records in safe and easy retrieval manner

E. All of the above.

Which one of the following is not a Politically Exposed Persons (PEPS);

A. The President, Vice president, Ministers, Advisers

B. Executive members of Market Association

C. Members of Senate and their advisers and assistants

D, Members of the House of Representatives and their advisers and assistants

E. Members of the Judiciary and their assistants

Which of the recommendations of FATF stated that Risk-Based Approach is the process of identifying, measuring, monitoring and mitigating risk;

A. Recommendation 1

B. Recommendation 2

C. Recommendation 3

D. Recommendation 4

E. Recommendation 5

Automation of compliance function through the use of electronic solutions to monitor, detect, analyze, and generate reports on suspicious transactions is preferable to manual because;

A. It is effective

B. Efficient

C. Timely

D. Convenient

E. All of the above

The absence of a sound ML and TF risk assessment exposes institution to serious damages and risks;

A. Reputational

B. Operational

C. Inventory

Legal and Regulatory

Financial and concentration

Compliance can be defined as;

A. Adherence to profit motive and compliance with the laws and regulations that are convenient and which will not shrink profitability of the financial institution’s or DNFBP’s business.

B. Adherence to laws, rules, regulations and guidelines that are relevant in the course of doing business or in the operation or activities of providing goods and services.

C. Disobedience to laws, rules, regulations and guidelines that are relevant in the course of doing business or in the operation or activities of providing goods and services.

D. Obedience to convenient extant laws, rules, regulations and guidelines that are irrelevant in the organisation’s line of doing business.

E. None of the above.

Information Communication Technology (ICT) has been very useful to humanity and has also been used wrongly to perpetrate various crimes which have also been a source of major concern in the world. What is this type of crime this committed daily called?

A. InformationCrime

B. TechnologyCrime

C. CommunicationCrime

D. Cybercrime

E. None of the above

Risk can be defined as the likelihood or probability or threat of damage, injury, liability, loss, or any other negative occurrence that is caused by internal or external vulnerabilities with uncertain impact, and that may be avoided though preemptive action. Meanwhile, risk appetite is the willingness to take risk. This is the amount of risk that the FI or DNFBP is willing to seek or accept in the pursuit of its long term objectives. This is how much risk you can take and you are still comfortable. The risk appetite of an institution is set and approved by;

A. The board

B. Executive Management

C. Top Management

D. Senior Management

E. The Employees

The early money launderers adopted which of these money laundering schemes or techniques to achieve their illegitimate goal;

A. Resorted to purchasing legitimate businesses to blend their unlawful earnings with the legitimate earnings they received from these businesses.

B. Ensured they took proper inventory of their incomes and paid correct taxes to government on all their illicit earnings in order to be seen as good taxpayers.

C. Declared all their incomes during tax self-assessment and/or best of judgement computations and adheres to terms and conditions therein.

D. Utilized their wealth in a transparent manner to ensure nobody is in doubt of their net-worth and/or source of their wealth hence they make their wealth to be common or public knowledge.

E. They money launderers spent the illegitimate money as soon as they took possession since the illegitimate fund is now in their possession and they can spend it any how they like and it does not concern anybody.

Threat could mean a person or event likely to cause damage or danger. An FI or DNFBP is faced with the threat of money laundering/terrorist financing from except;

A. Terrorist group

B. Money launderers

C. Toddler

D. Fraudsters

E. Shell banks, shell companies and Criminals

The ML/TF vulnerability sources include:

A. Weak Internal Control and Inefficient Customer Due Diligence

B. Poor Record Keeping and Poor transaction monitoring and reporting

C. Efficient AML/CFT Compliance Application

D. Inadequate Training

E. Weak Management Supervision

The key purpose of ML and TF risk assessment is to drive improvements in ………………………………….. by FI or DNFBP through the identification of specific risk and determination of how these risks are mitigated and controlled.

A. Mobilizing funds

B. Pursuing profitability

C. Ensuring customers are attracted

D. Combating financial crimes

E.Increasing visibility in the market place

A staff avoids taking periodic vacations and says that he/she is fully committed to the institution’s growth and development. This type of disposition can be explained to mean;

A. Commitment

B. Hard-work

C. Loyalty

D. Redflag

E. Support

The techniques and methods used in money laundering and terrorist financing are similar to an extent. However, there are crucial differences. Money Laundering has the following features except;

A. Usually, there is no workable financial profile within their operational activities.

B. The motivation is to make money or profit

C. Funding is from internal sources within criminal organizations

D. The money launderer prefers the financial system as their conduit or means of fund transmission

E. Large amounts in transactions are often structured to avoid reporting requirements.

The Nostro and Vostro accounts are used in correspondent banking relationship and the terminologies are applied differently depending on the side of the divide it is viewed from, for instance, depending on whether the financial institution is a correspondent bank or a respondent bank. Some say there may be other accounts. Therefore, from the respondent bank’s view, the funds deposited at correspondent banks are referred to as ………………. accounts.

A. Vostro accounts

B. Bank accounts

C. Nostro accounts

D. Correspondent accounts

E. Respondent accounts

In addition to FATF definition, Politically Exposed Persons (PEPs) can also be defined as;

A. Past or current office holders or individuals entrusted with high level private functions

B. Past or current office holders or individuals entrusted with high level business functions

C. Past or current office holders or individuals entrusted with high level market functions

D. Past or current office holders or individuals entrusted with high level public functions

E. Past or current office holders or individuals entrusted with high level professional functions

The EU Defined Politically Exposed Persons (PEPs) as;

A. ‘’ .. Natural persons who have been entrusted with prominent public functions and immediate family members or persons known to be close associates of such persons’’

B. ‘’ .. Natural persons who have been entrusted with prominent private functions and immediate family members or persons known to be close associates of such persons’’

C. ‘’ .. Natural persons who have been entrusted with prominent business functions and immediate family members or persons known to be close associates of such persons’’

D. ‘’ .. Natural persons who have been entrusted with prominent professional functions and immediate family members or persons known to be close associates of such persons’’

E. None of the above.

In the case of corporate entities, the following general identification procedure for this class of customers are adopted;

A. Name and principal place of business of the company

B. Names of Directors and official identification number e.g. RC no.

C. Name of company located next to the prospective corporate customer

D. Original or certified copy of the certificate of incorporation

E. Nature and purpose of the business and its legitimacy

International Association of Insurance Supervisors (IAIS) was formed in 1994. The membership consists of standard setting organisations of insurance supervisors and regulators from over 190 jurisdictions. Its major role is to supervise the insurance industry in order to develop and maintain a fair, safe and stable industry. IAIS also issues Guidance Notes on AML/CFT for operators in the insurance industry as part of its roles. It is located in …………………

A. Paris, France

B. Brussels, Belgium

C. Athens, Greece

D. Basel, Switzerland

E. Amsterdam, Netherlands

The following observations can be referred to as redflags associated with customers. Except;

A. Large - scale cash transactions

B. Rapid offshore transfer of funds immediately they are deposited

C. An institution’s application that is always experiencing system glitches

D. Unusual funds inflow into customers account

E. Settlement of Bad and Doubtful Debt by third parties or without waiver request

The FATF Recommendation 3 are as follows;

A. ML should be criminalized on the basis of the Vienna Convention and the Palermo Convention (see Article 3(1)(b) &(c) Vienna Convention and Article 6(1) Palermo Convention).

B. The predicate offences for ML should cover all serious offences, with a view to including the widest range of predicate offences. At a minimum, predicate offences should include a range of offences in each of the designated categories of offences.

C. When proving that property is the proceeds of crime, it should not be necessary that a person be convicted of a predicate offence

D. Predicate offences for money laundering should extend to conduct that occurred in another country, which constitutes an offence in that country, and which would have constituted a predicate offence had it occurred domestically.

E. All of the above.

A customer can be defined or described as or in all or one of the following ways;

A. A person or entity that maintains an account with a financial institution

B. A person on whose behalf an account is maintained

C. A beneficiary of transactions conducted by an intermediary

D. A person who lives near a bank and comes to greet the manager from time to time

E. A person or entity connected with a financial transaction that can pose a significant or other risk to the institution (e.g. trustees/settlers)

The financing of proliferation of WMD is the use of money to facilitate the movement, use and proliferation of WMD across the world. There is the likelihood of interconnection between proliferation and terrorist activities because of the following except;

A. Financing of proliferation can aid terrorism globally

B. There is also a concern in relation to Dual Use Goods

C. These categories of goods and technologies can also be used for the development of WMD, terrorist activities and human rights violations.

D. Proliferation financing can assist in bringing socio-economic from developed to developing countries

E. These so called ‘dual use’ are subject of European Union (EU) control and other international jurisdictions hence its movement under trade services should be kept under close watch.

In what year was the Financial Action Task Force (FATF) formed by G8?

A. 1980

B. 1998

C. 1989

D. 1986

E. 1990

A search warrant is a grant of permission from a court for a law enforcement agency to search certain designated premises and to seize specific categories of items or documents. Generally, the requesting agency is required to establish that probable cause exists to believe that evidence of a crime will be located. The warrant is authorized based on information contained in the …………………. submitted by a law enforcement officer.

A. Warrant

B. Affidavit

C. Statement

D. Police Station Diary

E. Court judgement

The Egmont Group provides support to member …..

A. CBN

B. NDIC

C. FIU

D. Legislature

E. Judiciary

As a proper guide to implementation of rule of engagement under Governance, an FI or DNFBP should ensure the following except;

A. Consider the provisions the minimum standard and set higher expectations in your FI

B. Conduct risk assessment to ML & TF before manual compilation

C. Consult Black market operators for guidance because of the understanding of underground banking system

D. Seek Board Approval for all Manuals and document the approval for sighting by examiners

E. Make provision for Renewal Page in the Manual. Set a higher standard for manual update (i.e at least once a year)

This PEP definition was given By …………… ‘’ .. Individuals who are or have been entrusted with prominent public functions in a foreign country, for example heads of state or of government, senior politicians, senior government, judicial or military officials, senior executives of state-owned corporations, important political party officials. Business relationships with family members or close associates of PEPs involve reputational risks similar to those with PEPs themselves. The definition is not intended to cover middle ranking or more junior individuals.

A. Wolfsberg

B. FATF

C. GIABA

D. Basel Committee

E. None of the above

Apart from the major role of International Organization of Securities Commissions (IOSCO) which includes development, implementation and promotion of high standards of regulation for enhancing investors protection around the world, it also issues Anti-Money Laundering Guidance Notes for various areas relating to;

A. Treasury bills and Treasury Certificates

B. Securities and Derivatives in the Capital market

C. Bridging Loans for MSMEs

D. Correspondent banking activities

E. PEP investments

The best approach to be adopted by a financial institution or DNFBP to fulfill expectations in relation to Consumer Protection is by;

A. Ensuring timely complaints handlings and dispute resolution

B. Promoting professionalism and ethics

C. Outlining the rights and responsibilities of customers

D. Adopting fair and ethical debt recovery practices

E. All of the above

Law enforcement investigations, in many other jurisdictions, can be triggered by any number of factors, including;

A. the receipt suspicious transaction report or STR

B. tips from other sources (inside and outside of the government)

C. Information gleaned from other cases

D. Observation and environmental scanning

E. All of the above

GIABA was established in the year 2000 by the Economic Community of West African States (ECOWAS) authority of;

A. Heads of States and Government

B. Parliament of ECOWAS member states

C. Anti-graft agencies ECOWAS member states

D. ECOWAS Monetary union

E. Attorneys General of ECOWAS member states

Sequel to the September 11 terrorist attack, FATF Recommendations were expanded in 2001 to include;

A. Anti-money laundering (AML)

B. Combating of Terrorist Financing (CTF)

C. Know Your Customer (KYC)

D. Politically Exposed Persons (PEPs)

E. Customers Due Diligence (CDD)

The origin of money laundering can be traced to the period when some people started devising means to evade detection and payment of taxes, as they were earning huge sums in cash from extortion, prostitution, gambling and liquor sales and so many other illicit activities which was yielding huge sums of money that they needed to launder the money to give it a legitimate appearance. The term "money laundering" as used in modern times originated from a group in the United States referred to as the;

A. Drug groups

B. Armed Robbery groups

C. Mafia groups

D. Big Guys groups

E. Money laundering groups

Under Recommendation 39, FATF recommends that Countries should be able to execute extradition requests in relation to ML/TF without undue delay. In particular, countries should;

A. Ensure ML and TF are extraditable offences;

B. Ensure that they have a case management system, and clear processes for the timely execution of extradition requests including prioritisation where appropriate; and

C. Not place unreasonable or unduly restrictive conditions on the execution of requests.

D. A, B and C

E. A and B

This PEP definition which states that they - “Include individuals whose current or past official position can attract publicity or whose financial action or circumstances may be the subject of increased public scrutiny”.

A. FATF

B. Wolfsberg Group Definition

C. Brentwood

D. Basel

E. None of the above

Money laundering can only be a means to an end but not an end in itself for a criminal if all of these happen except one;

A. When the stolen assets are successfully laundered and eclipsed from the long arm of the law

B. At the point the mark of filth is obliterated and the illicit funds now appear legitimate

C. If the money laundering process ensures the illicit funds is possession of the money launderer or he/she is in control of it

D. Where the money launderer has successfully separated himself/herself from the illegitimate money

E. When the public knows not only that the source of the wealth is illegal but even the exact illicit origin

As captured in FATF Recommendation 20, it states that in order to aid investigation of financial crimes, FIs and DNFBPs should report suspicious transactions to the Financial Intelligence Unit (FIU). Therefore, Suspicious transaction can manifest in the following ways except;

A. Unusual frequency and Unusual complexity

B. Activities that do not make economic sense or lawful objective

C. Activities that are inconsistent with customer’s known business profile

D. Activities that match the customer’s profile and circumstance

E. Activities relating to terrorist financing

The ………. of the FIs or DNFBPs have the right to identify and assess all the risks embedded in the operation of their institution. This also includes the risk of money laundering and terrorist financing. The policy and review for assessing the risk should be approved.

A. Board

B. Management

C. Risk Management

D. Operations

E. Compliance

The following information can be used to identify individuals except;

A. Legal name and any other names used

B. Correct permanent address in full, Telephone, fax numbers & email address

C. Details of a onetime co-passenger

D. Date and place of birth, Nationality, Occupation, public position held

E. Official personal identification number or other unique identifier contained in an unexpired official document, Signature

A customer who has Unrealistic business proceeds compared to client’s profile, re-activates his/her dormant account with huge amount and/or deposits at various branches the same day for no logical reason is said to be;

A. Doing well in his/her business

B. Patronizing the institution

C. Diversifying his/her operations

D. Manifesting signs of redflag

E. Showing that his business requires another account

A regulation was passed by European Parliament and Council of the European Union on the 14/April/2016. It became effective on the 25th May, 2018. The regulation cover data controller, data processor and data subject within EU. It is also relevant to those outside EU if they process data on EU residents. The only exemption is for those data that concern national securities by EU Law Enforcement Agencies. The acronym for this regulation is known as;

A. GDPP

B. GPRS

C. GDPR

D. GRDP

E. GPSR

…………… also known as De-banking refers to financial institutions exiting relationship with and closing the account of clients considered as ‘High risk’;

A. De-marketing

B. De-risking

C. De-connecting

D. De-relationship

E. None of the above

The current FATF 40 Recommendations makes the Risk Based Approach (RBA) a centrifugal force and added ………………………….. as part of the global themes.

A. Combating Terrorist Financing

B. The Proliferation of Weapons of Mass Destruction (WMD)

C. Ultimate Beneficial Owner (UBO)

D. DNFBPs

E. Know Your Customer (KYC)

If your institution is served with a summons or subpoena compelling the production of certain documents, the institution should;

A. Have its senior management and/or counsel review the summons or subpoena

B. Contest the summons or subpoena, if there are grounds to do so, otherwise, take all appropriate measures to comply

C. Respond on a timely and complete basis to avoid adverse action and penalties

D. Do not notify the customer who is being investigated and if the government or law enforcement asks the bank to keep certain accounts open, such a request should be obtained in writing under proper letterhead and authority

E. All of the above

The following are components of the 10 Pillars of AML/CFT except;

A. Record Keeping & Retention

B. Attending Campaign rallies of the ruling party

C. Online, Real-time Transaction Monitoring

D. Internal Control & Audit

E. Training & Awareness Program

When presented with a search warrant, an institution should consider taking the following steps, except:

A. Call the financial institution's in-house or outside counsel

B. Review the warrant to understand its scope

C. Resist the search operation to prove you are stubborn and tough

D. Ask for and obtain a copy of the warrant

E. Remain present while the agents record an inventory of all items they seize and remove from the premises. Keep track of the records taken by the agents, get a copy and note the law enforcement agents and/or affiliations present.

In order to manage compliance risk effectively, financial institutions are expected to set the following five (5) rules.

A. Enterprise Risk Management framework of institutions should recognize ML & TF risk, and issue guidelines on the methodology for customer risk rating and account risk assessment

B. Have a policy on prohibition of numbered and anonymous accounts or fictitious names and shell companies

C. Acquire PEP List, UN/OFAC Sanction. Compile List of High risk customers. Establish policy and mechanism for screening

D. Conduct ML/TF risk assessment before establishing new branches, subsidiaries, products and new technology

E. All of the above

The BCBS also plays an important role in AML/CFT compliance through its principles on;

A. Politically Exposed Person (PEP)

B. Customer Due Diligence (CDD)

C. Combating of Terrorism Financing (CTF)

D. Whistleblowing

E. Corporate Governance

For proper risk assessment guidance, an FI or DNFBP should ensure the following except;

A. The Enterprise Risk Management framework of the FI should recognize ML & TF risk

B. Issue guidelines on the methodology for customer risk rating and account risk assessment to customer service and account officers

C. Onboard Terrorist and Watch-listed persons and entities to provide information on what they do in the underground world

D. Have a policy on prohibition of numbered accounts, anonymous accounts or accounts in fictitious names and shell companies

E. Acquire PEP List, UN/OFAC Sanction. Compile List of High risk customers. Establish policy and mechanism for customer, account and transactions screening and filtering

Money launderers and terrorist financiers constitute …….. to the operations of FIs & DNFBPs.

A. Good control

B. Profit

C. Risks

D. Asset

E. Necessary

There are reasons that gave rise to the global shift and focus on Compliance which include the following except;

A. Focus on reputational risk

B. Increasing regulatory legislation

C. Stricter penalties for regulatory breaches

D. Use of sanctions by regulators to punish opposition

E. Threat to the society and indeed the entire world

Which of the following is part of the 10 Pillars of AML/CFT Compliance;

A. Corporate Governance, Conduct & Culture

B. Compliance Management & Internal Sanctions

C. Enterprise-wide ML, TF & PF Risk Assessment

D. Customer Due Diligence, EDD, UBO

E. All of the above

Once such an investigation is commenced, the relevant law enforcement agency might request information from a financial institution in order to obtain evidence. Requests for information can come in several forms of except;

A. subpoenas (Summons)

B. Invitation

C. Interview

D. Manhandling and/or coercion

E. Search warrants

Steps that law enforcement agencies can or should take in conducting a money laundering investigation include:

A. Follow the money, identify unlawful activity and underlying transactions.

B. Review databases and conduct computer-based searches

C. Develop good relationship with the suspect because he/she is a respected person in the society

D. Review public records, Review licensing and registration files

E. Review STRs and in cross-border cases, seek international assistance.

There are differences between Terrorist Financing and money laundering. Terrorist financing has the following attributes except;

A. The motivation is ideological and the conduit favours cash couriers or informal financial systems such as Hawala and currency exchange firms.

B. Source of funding is Internally from self-funding cells (generally centered on criminal activity).

C. Detection of suspicious transactions is in terms of Suspicious relationships, such as wire transfers between seemingly unrelated parties, which lead to transactional links.

D. In terms of financial activity, no workable financial profile of operational terrorists exists, according to U.S. 9/11 Commission.

E. The terrorist can benefit from the terrorist finance raised for the terror activities by utilizing the funds before the terror act is carried out

‘Trust but Verify’ means,

A. Verification of information is extremely important

B. Although customer should be trusted but you should do the needful

C. Do not bother about verification as customer is always right and cannot be questioned

D. Certain information such as names, permanent address, validity of official documents, should be verified

E. Corroborate your observation and documents submitted

FATF was formed by G8 with the objective of;

A. Combating the growing problem of Money Laundering (ML) worldwide

B. Fighting Terrorist Financing (TF)

C. Assisting the developing countries to pull them out of poverty and stimulate economic development

D. Strengthen the relationship between the developed countries and developing countries

E. Partnership between Europe and other continents for industrialization

Vulnerability refers to the weaknesses in the internal control processes that may likely be exploited by the threats. The weaknesses include except;

A. Insufficient customer-base

B. Improper implementation of KYC/CDD

C. Poor Record keeping

D. Late rendition of mandatory reporting

E. Inaccurate Sanctions Screening

1 out of 100

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