Welcome to your Anti-Money Laundering Quiz

Test your money laundering knowledge

Laundering the financial proceeds of criminal activity continues to pose one of the greatest threats to society: impacting economies, businesses, and most importantly, people across the globe. Anti-money laundering initiatives around the world have led to collaborative efforts between law enforcement, regulatory bodies, trade associations and private businesses.

Many organizations and professionals deploy anti-money laundering controls to help the fight which requires robust knowledge of money laundering techniques, associated crimes and relevant legislation.

Test your knowledge with this interactive money laundering quiz.

Take your Quiz

Name

Email

Designation

Company Name

Phone

1.

Money Laundering means:

Conversion of cash into gold to make them legitimate

Conversion of assets to invest in Laundromats

Conversion of money which is illegally obtained to make them legitimate

Conversion of assets into cash to make them legitimate

2.

The implementation of KYC in banks primarily addresses which one of the following risks:

Compliance risk

Market risk

Reputation risk

Money laundering risk

Legal risk

3.

When banks sell third party products (such as insurance, mutual funds etc) as agents, the responsibility for ensuring compliance with KYC/AML/CFT regulations ……….

lies with the third party issuer

lies with the bank marketing the product

depends on whether the customer pays the money in cash or otherwise

depends on whether the customer is a walk-in customer

lies with both the bank as well as the third party issuer

4.

Under the KYC guidelines, banks need to conduct EDD - ‘Enhanced due diligence’ in all the following cases except in case of ….

Correspondent accounts

Non-face-to-face customers

Trustees, Nominees, and Fiduciaries

Firms with sleeping partners

Personal customers with small deposits

5.

As per KYC guidelines, which one of the following customers is having high risk?

Bank employee

Central Govt. Employee

Small businessman

Politically exposed person resident abroad

6.

The risk of money laundering or terrorist financing is lower in ……….

Basic banking account with a regulated deposit limit

Private banking

Cash intensive business

Non-resident customers

Company having nominee shareholders

7.

FATF is an inter-governmental body of G7 group of countries, a policy making body which sets standards to combat money laundering and financing of terrorism. FATF stands for …….

Financial action on terrorist financing

Financial action task field

Financial action task force

Financial association task force

Fight against terrorist financing

8.

Unusual activities in respect of an customers account is/are -

Request for closure of newly opened accounts where high value transactions are routed through

Frequent deposits of large sums of money bearing labels of other banks into the account

All of the above

Opening of account at a place other than the place of work

9.

Typically, money laundering involves three steps - Name the first step of money laundering.

Placement

Integration

Positioning

Layering

10.

Name the second step of money laundering

Positioning

Integration

Placement

Layering

11.

Name the third step of money laundering

Layering

Integration

Positioning

Placement

12.

What is smurfing?

Physically smuggling cash to a jurisdiction with greater bank secrecy or less rigorous money laundering enforcement and depositing it in a financial institution

Where criminals buy a controlling interest in a bank, preferably in a jurisdiction with weak money laundering controls, and then move money through the bank without scrutiny

A method of placement whereby cash is broken into smaller deposits of money to avoid suspicion of money laundering

Depositing money in a controlled foreign corporation offshore, preferably in a tax haven where minimal records are kept, and then shipped back as a foreign direct investment, exempt from taxation

13.

Which of these is not a form of money laundering?

Bank capture

Round tripping

Red salaries

Structuring

14.

The risk-based approach to money laundering includes?

Both

Customer Risk Assessment

Neither

Organization Risk Assessment

15.

Which is not a recognised form of due diligence?

Extended due diligence

Enhanced due diligence

Simplified due diligence

Customer due diligence

16.

What would a money launderer use a car wash for (in addition to washing their car)?

Washing dirty money to get fingerprints off it

Co-mingling dirty money with legitimate cash

Round-tripping

Trade-based laundering

17.

Name the Netflix movie about the Panama Papers.

The Laundromat

The Laundry Man

The Man from Panama

The Money Launderer

18.

What is one way a money launderer can attempt to launder his money?

He can create a set of false books

He can open a bank account

All of these responses are correct

He can create a separate identity

19.

Which of these describes a shell company?

Businesses that actually conduct no real business

Businesses whose financial records can't be located.

Businesses that have correct financial records

Business that conduct a lot of business activities globally

20.

Which of the following best describes money laundering?

A simple plan to hide money

An elaborate and convoluted scheme to hide money

None of the above responses are correct

The opening of a bank account

21.

What does smurfing involve?

Opening a bank account

Making small deposits over time

Closing a banking account

All of these responses are correct.

22.

Which of the following is not an example of layering?

Using cash deposited in a bank account to purchase an asset

Exchanging cash for a monetary instrument

Using an inbound wire transfer to purchase an asset

Using an inbound wire transfer to purchase a monetary instrument

23.

What are key effects of money laundering on countries? Choose three. i) Reputation risk ii) Losing control of regulatory policy iii) Being forced into adverse fiscal policies iv) Losing control of monetary policy

i, ii, iv

ii, iii, iv

i, iii, iv

i, ii, iii

24.

Which of the following are most vulnerable to the placement stage of money laundering? Choose two. i) Purchasing diamonds ii) Overpaying a credit card balance iii) Obtaining cashiers cheques iv) Internet casinos

i, iii

i, iv

i, ii

ii, iii

25.

Which of the following is a correct statement?

smurfs travel from bank to bank withdrawing cash from ATMs

smurfs are dead people who's accounts have been taken over by money launderers

smurfing is a way to avoid triggering a currency reporting threshold

smurfing requires an insider at a financial institution

Thank you for solving AML/CFT quiz.

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