Full CKYCA Practice Test and 132 unique questions with explanations waiting just for you!
AML Certifications Dumps CKYCA Exam for Full Questions - Exam Study Guide
NEW QUESTION # 26
During adverse media screening, a KYC analyst discovers a customer's beneficial owner is implicated in an article about a tax evasion scandal. Which is the best next step?
- A. Check that the customer's risk rating is inherently high risk.
- B. Cross-reference the article's source and consider a second source.
- C. Ask the beneficial owner about its involvement in the tax evasion scandal
- D. Reject the customer due to the risk of tax evasion
Answer: B
Explanation:
Adverse media findings should be verified for credibility and accuracy before taking action. Cross-referencing with another reliable source ensures the information is factual and not based on unverified or biased reporting.
NEW QUESTION # 27
During the regular periodic review of a high-risk client, a KYC analyst performs EDD checks and detects the presence of a politically exposed person. The KYC analyst should escalate this issue to the:
- A. management team for approval or denial of risk
- B. onboarding team for the assessment of risk
- C. head of the KYC team for approval or denial of risk.
- D. privacy officer for the assessment of risk
Answer: A
Explanation:
When a politically exposed person (PEP) is identified during enhanced due diligence, FATF requires that senior management approve the decision to continue or terminate the relationship due to the elevated financial crime risk.
NEW QUESTION # 28
Which describes the best method for creating a thorough audit trail to prove compliance?
- A. Notations within the customer profile that the identity was checked
- B. Incorporating copies of documentation and written communication in the customer profile
- C. Storing transcripts in the customer's profile of dialogues that take place during onboarding
- D. Documenting pictures of the customer holding the identification stored in the customer profile
Answer: B
Explanation:
A thorough audit trail requires keeping complete, verifiable records, including copies of identification documents and all written communications, so that compliance checks can be evidenced to regulators or auditors.
NEW QUESTION # 29
A politically exposed person (PEP) is eager to open a private account with an international bank. In addition to performing the normal CDD, which measure should be required from the AML officer?
- A. Obtain senior management approval for establishing such business relationships.
- B. Make a note of a PEP business relationship and file a suspicious transaction report to the local financial intelligence unit.
- C. Conduct enhanced ongoing monitoring of the business relationship each quarter.
- D. Contact law enforcement, as PEPs pose enhanced risks to an institution.
Answer: A
Explanation:
FATF requires that before establishing a business relationship with a PEP, financial institutions must obtain senior management approval, along with applying enhanced due diligence measures such as verifying the source of wealth and funds.
NEW QUESTION # 30
If a customer is a PEP and they are using private wealth services from banks, and also appear to have obtained a fair amount of wealth is this a red flag?
- A. Yes.
- B. No.
- C. Depends on the exact circumstances.
Answer: A
NEW QUESTION # 31
The five components of the internal control framework are the overall control environment are risk assessment, control activities, communication, regulations, quality assurance?
- A. Yes.
- B. No.
Answer: B
NEW QUESTION # 32
An Ultimate Beneficial Owner (UBO) with a control prong is an individual with:
- A. direct and indirect ownership greater than a certain percent value but who lacks management and operational control.
- B. direct ownership greater than a certain percent value.
- C. indirect ownership greater than a certain percent value.
- D. direct and indirect ownership less than a certain percent value who exercises management and operational control.
Answer: D
Explanation:
Under the control prong, a UBO is identified as an individual who may not meet the ownership threshold but still exercises significant management or operational control over the entity, thereby having effective influence over its activities.
NEW QUESTION # 33
What a is supranational organization below? (SELECT 3)
- A. United Nations
- B. World Trade Organization
- C. European Union.
- D. Singapore's Ministry of Law.
- E. Australian Transaction Reports and Analysis Centre.
Answer: A,B,C
NEW QUESTION # 34
What are the two types of Politically Exposed Persons (PEPS) that are identified by The Financial Action Task Force? (SELECT 2)
- A. Foreign PEPs are individuals who are or have been entrusted with prominent public functions by a foreign country.
- B. Domestic PEPs are individuals who are or have been entrusted domestically with prominent public functions.
- C. Domestic PEPs are individuals who are or have been entrusted domestically with prominent non-public functions.
- D. Foreign PEPs are individuals who are or have been entrusted with prominent public functions by a domestic country.
Answer: A,B
NEW QUESTION # 35
In the Customer Identification Program (CIP) What are the basic information required to identify a legal person is? (SELECT 3)
- A. Source of Wealth.
- B. Source of Funds.
- C. Legal Name.
- D. Address, including legal and place of business.
- E. Identification number issued by government.
Answer: C,D,E
NEW QUESTION # 36
When performing EDD on a new high-risk customer, which question best informs the decision to move forward with onboarding?
- A. Does this customer exceed the risk tolerance of the institution?
- B. Will the customer be able to provide legitimate bank reference letters?
- C. Is this customer going to be subject to ongoing monitoring?
- D. Can this customer be accepted given the geographic scope of their activities?
Answer: A
Explanation:
The key question in deciding whether to onboard a high-risk customer is whether their risk profile exceeds the institution's defined risk tolerance, as this determines alignment with regulatory requirements and internal compliance policy.
NEW QUESTION # 37
If you need to reach out to the client for more information and/or verification regarding the Enhanced Due Diligence (EDD) Process. should the KYC employee reach out directly to the client themselves and not the a relationship manager or equivalent.
- A. TRUE.
- B. FALSE.
Answer: B
NEW QUESTION # 38
What is a regional risk (SELECT 3)
- A. Global Financial Centers
- B. Lax Immigration Controls.
- C. Free Trade Zones.
- D. Port Cities.
- E. High Intensity Financial Crime Areas (HIFCA)
Answer: C,D,E
NEW QUESTION # 39
Most Organizations Use the three risk classifications for customers.
What are they? (SELECT 3)
- A. Very High.
- B. Low.
- C. EDD-High.
- D. Medium.
- E. High.
- F. Moderate.
Answer: B,D,E
NEW QUESTION # 40
Who will review KYC files to determine whether you are complying with your jurisdiction's laws and regulations
- A. Law Enforcement
- B. The KYC Analyst
- C. Regulators
- D. Compliance
Answer: C
NEW QUESTION # 41
A customer of a bank in the EU has been changing the business activities of their company every month since becoming a customer two years ago. The bank should:
- A. hold the information for a period of time, as specified by the policies of the bank, and in line with the EU AML Directives.
- B. hold the older information for one year and then destroy any records in line with data privacy requirements.
- C. keep records of the changing circumstances for as long as the customer holds an account with the bank.
- D. maintain only the current information, because data privacy regulations require old information be destroyed when updated.
Answer: A
Explanation:
Under EU AML Directives, banks must retain customer information and changes for the period specified in their internal policies, ensuring compliance with record-keeping requirements, while also adhering to applicable data privacy laws.
NEW QUESTION # 42
During the onboarding process of a new customer, it is noted that the customer is a politically exposed person opening a private banking account and has a foreign passport. Which statement best describes the industry best practice for the institution?
- A. Mandatory periodic review should occur on at least an annual basis
- B. Enhanced monitoring may be decided on by the business line manager.
- C. Simplified monitoring is required per the customer risk criteria.
- D. Simplified monitoring should occur on a yearly basis.
Answer: A
NEW QUESTION # 43
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