Q1. Which of the following is NOT a key requirement of the Bank Secrecy Act (BSA) in the United States?
a) Maintain comprehensive records of clients’ transactions
b) Submit reports like Currency Transaction Reports (CTRs)
c) Establish a Customer Identification Program (CIP)
d) Disclose beneficial ownership information to the government
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Correct Answer: d) Disclose beneficial ownership information to the government
Explanation: The BSA does not require financial institutions to disclose beneficial ownership information to the government. This requirement was introduced by the Corporate Transparency Act in 2024.
Q2. The Financial Action Task Force (FATF) is a global regulatory body that:
a) Establishes international standards for Anti-Money Laundering (AML) compliance programs
b) Imposes fines and sanctions on legal entities for non-compliance with AML/CFT obligations
c) Both a and b
d) None of the above
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Correct Answer: c) Both a and b
Explanation: The FATF establishes international standards for AML compliance programs and has the authority to impose fines and sanctions on legal entities and individuals for non-compliance with AML/CFT obligations.
Q3. The 6th Anti-Money Laundering Directive (6AMLD) is a legal framework implemented by:
a) The United States
b) The European Union
c) The United Kingdom
d) India
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Correct Answer: b) The European Union
Explanation: The 6th Anti-Money Laundering Directive (6AMLD) is a legal framework implemented by the European Union to combat money laundering and terrorist financing.
Q4. Which of the following is NOT a key feature of the 6AMLD?
a) Broader definition of money laundering
b) Stricter penalties for non-compliance
c) Mandatory central registers for beneficial ownership
d) Requirement for financial institutions to disclose beneficial ownership information
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Correct Answer: d) Requirement for financial institutions to disclose beneficial ownership information
Explanation: The 6AMLD does not require financial institutions to disclose beneficial ownership information. This requirement was introduced by the Corporate Transparency Act in the United States.
Q5. The Corporate Transparency Act (CTA) in the United States:
a) Requires firms to report their beneficial owners to the government
b) Introduces requirements around beneficial ownership transparency
c) Applies to both US and foreign entities doing business in the US
d) All of the above
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Correct Answer: d) All of the above
Explanation: The CTA requires firms to report their beneficial owners to the government, introduces requirements around beneficial ownership transparency, and applies to both US and foreign entities doing business in the US.
Q6. Which of the following is NOT a key component of the EU’s latest AML package?
a) A regulation to establish an AML Authority (AMLA)
b) A new 6th Anti-Money Laundering Directive
c) A new regulation providing clarity for obliged entities
d) A requirement for financial institutions to disclose beneficial ownership information
Show Answer
Correct Answer: d) A requirement for financial institutions to disclose beneficial ownership information
Explanation: The EU’s latest AML package does not include a requirement for financial institutions to disclose beneficial ownership information. This requirement was introduced by the Corporate Transparency Act in the United States.
Q7. The UK’s Economic Crime Plan 2 (ECP2) commits the government to:
a) Decreasing money laundering and increasing asset recovery
b) Tackling kleptocracy and combatting sanctions evasion
c) Reducing fraud and lowering the threat of international illicit finance
d) All of the above
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Correct Answer: d) All of the above
Explanation: The UK’s ECP2 commits the government to decreasing money laundering and increasing asset recovery, tackling kleptocracy and combatting sanctions evasion, reducing fraud, and lowering the threat of international illicit finance to the UK and its interests.
Q8. Which of the following is NOT a key goal of the 2024 National Strategy for Combatting Terrorist and Other Illicit Financing (2024 Strategy) released by the U.S. Treasury Department?
a) Expand the scope of AML/CFT compliance obligations to sectors not currently subject to the BSA
b) Support efforts by the legal sector to adopt ethics rules that institute AML/CFT measures for attorneys
c) Require financial institutions to disclose beneficial ownership information to the government
d) Consider updates to the regulatory requirements for virtual asset activities
Show Answer
Correct Answer: c) Require financial institutions to disclose beneficial ownership information to the government
Explanation: The 2024 Strategy does not require financial institutions to disclose beneficial ownership information to the government. This requirement was introduced by the Corporate Transparency Act.
Q9. The Indian Financial Intelligence Unit-India (FIU-IND) performs the same functions as:
a) The Financial Action Task Force (FATF)
b) The Financial Crimes Enforcement Network (FinCEN) in the USA
c) The European Union’s 6th Anti-Money Laundering Directive (6AMLD)
d) None of the above
Show Answer
Correct Answer: b) The Financial Crimes Enforcement Network (FinCEN) in the USA
Explanation: The FIU-IND performs the same functions as FinCEN in the USA, which is to collect and analyze information about financial transactions to combat money laundering, terrorist financing, and other financial crimes.
Q10. Under the Prevention of Money Laundering Act, 2002 (PMLA) in India, it is mandatory for banks to furnish a monthly Cash Transaction Report (CTR) to the FIU-IND for:
a) All transactions over Rs. 5 lakh
b) All transactions over Rs. 10 lakh
c) All transactions over Rs. 15 lakh
d) All transactions over Rs. 20 lakh
Show Answer
Correct Answer: b) All transactions over Rs. 10 lakh
Explanation: Under the PMLA, it is mandatory for banks in India to furnish a monthly CTR to the FIU-IND for all transactions over Rs. 10 lakh or its equivalent in foreign currency.