An unusual spike in activity has occurred for a customer who is a supplier of aviation parts to a military force. The customer's current line of business is consistent with the banks records, and no adverse media hits have occurred. Which is the best reason for an investigator to continue an investigation?
Answer(s): A
The best reason for an investigator to continue an investigation is that the end-user is a military force. This is because supplying aviation parts to a military force may involve sanctions risk, export control risk, or human rights risk, depending on the nature and destination of the military force. The investigator should conduct further due diligence to determine if the customer is complying with the relevant laws and regulations, and if the bank is exposed to any reputational or legal risk by providing services to the customer.
Former Airline Employee and Aircraft Part Sellers Charged in Kickback ... Former Airline Employee and Aircraft Part Sellers Charged in Kickback ... Former airline employee and aircraft part sellers charged in kickback ...
Which actions should financial institutions perform to ensure proper data governance? (Select Three.)
Answer(s): A,B,D
Financial institutions should perform the following actions to ensure proper data governance:Establish an appropriate data management method for collecting and storing information. This is important to ensure that the data is consistent, reliable, and accessible for various purposes, such as risk assessment, compliance reporting, and customer service. Data management methods may include defining data standards, policies, and procedures; implementing data quality controls and validation checks; and using appropriate data storage systems and formats. Ensure the accuracy of customer identification records and transaction records and appropriately manage data as a prerequisite for the effective use of IT systems. This is important to comply with the anti-money laundering and counter-terrorist financing (AML/CFT) requirements, such as customer due diligence, transaction monitoring, and suspicious activity reporting. Accurate and complete customer and transaction data also enables financial institutions to use IT systems more effectively for data analysis, risk management, and decision making. Periodically validate integrity and accuracy of information used for IT systems such as customer information, customer identification records, and transaction records. This is important to ensure that the data remains up-to-date, relevant, and reliable over time. Data validation may include verifying the source and quality of the data; identifying and correcting any errors or inconsistencies; and updating or deleting any obsolete or redundant data.
Data Governance for Financial Institutions - Capgemini Small and Medium-Sized Deposit-Taking Institutions (SMSBs) Capital and Liquidity Requirements - OSFI
Why is a more robust supervisory approach needed by regulators when overseeing small- and medium-sized money service businesses (MSBs) compared to larger MSBs for combatting terrorist financing (TF)?
Answer(s): D
A more robust supervisory approach is needed by regulators when overseeing small- and medium- sized MSBs compared to larger MSBs for combatting TF because small- and medium-sized MSBs are more at risk of allowing transactions linked to TF due to the lack of skilled compliance resources. Small- and medium-sized MSBs may face challenges in implementing effective AML/CFT controls, such as conducting risk assessments, applying customer due diligence measures, monitoring transactions, detecting suspicious activities, and reporting to the authorities. They may also have limited access to training, guidance, and tools to enhance their compliance capabilities. Therefore, regulators need to provide more supervision and support to small- and medium-sized MSBs to ensure that they comply with the AML/CFT requirements and mitigate the TF risks.
Sustainable Growth for Small and Medium-Sized Enterprises ... - MDPI Lessons on Resilience for Small and Midsize Businesses - HBR
Which pattern of activity most strongly indicates an individual is a foreign terrorist fighter?
Answer(s): B
The pattern of activity that most strongly indicates an individual is a foreign terrorist fighter is a large cash advance on a credit card and purchases at travel and sporting goods websites. This is because this pattern may suggest that the individual is preparing to travel to a conflict zone and purchase equipment or supplies for terrorist activities. According to the United Nations Office on Drugs and Crime, some of the indicators of foreign terrorist fighters include1:Sudden or increased financial activity, such as cash withdrawals, transfers, or deposits, especially in large amounts or involving foreign currency or locations. Purchases of travel-related items, such as airline tickets, passports, visas, luggage, or clothing, especially to or from high-risk destinations or transit hubs. Purchases of items that could be used for terrorist purposes, such as weapons, explosives, chemicals, communication devices, or survival gear.Changes in behavior, such as expressing radical views, cutting ties with family or friends, joining extremist groups, or displaying signs of emotional distress.
Foreign Terrorist Fighters - United Nations Office on Drugs and Crime
Which action is part of the enhanced due diligence process?
One of the actions that is part of the enhanced due diligence process is collecting beneficial ownership details regarding the client's account. This is important to identify the natural persons who ultimately own or control the client, and to assess the potential risks associated with them.According to the Financial Action Task Force (FATF), beneficial ownership information should include1:The name, nationality, and country of residence of each beneficial owner. The date of birth or incorporation of each beneficial owner. The nature and extent of the beneficial interest held by each beneficial owner. The means by which the beneficial ownership or control is exercised.
FATF Guidance on Transparency and Beneficial Ownership
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