A financial institution is conducting an enterprise-wide risk assessment (EWRA) and has identified a high inherent risk of money laundering associated with its private banking division due to the clientele's high net worth and complex financial structures. However, the institution has implemented robust customer due diligence (CDD) and enhanced due diligence (EDD) procedures, along with sophisticated transaction monitoring systems.
How would these controls impact the assessment of residual risk?

• A.The residual risk would be significantly reduced due to the effectiveness of the controls in place
• B.The residual risk would be moderately reduced, but further controls may be necessary to achieve an acceptable level
• C.The residual risk would remain high due to the inherent nature of the private banking business
• D.The residual risk would be eliminated entirely because the controls are sufficient to mitigate all potential risks

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How do nominees benefit criminals misusing thorn for money laundering purposes? (Select Two.)

• A.Allow domicile in the nominee's jurisdiction
• B.Obscure beneficial ownership
• C.Allow beneficial owners to provide proxies lot voting on corporate decisions
• D.Derail investigations

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Which of the following best describes the use of fuzzy logic in customer screening systems?

• A.It produces outputs that include a range of intermediate possibilities between "Yes" and "No"
• B.It is an advanced analytics tool widely used to implement AFC controls
• C.It allows for a greater number of exact matches, reducing the need for manual review
• D.It is a new technique for enhancing the quality of alerts for review

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Which risks are specifically associated with the misuse of gaming accounts in financial crime? (Choose three.)

• A.Using gaming accounts to transfer illicit funds between players undetected
• B.Structuring transactions to avoid reporting thresholds by keeping them under certain limits
• C.Providing false personal information to evade regulatory oversight
• D.Ensuring identity verification is completed prior to the onboarding of new customers
• E.Investing all gaming winnings into high-risk stocks to conceal funds

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According to PinCEN. when a financial institution (PI) identities a suspicious activity that necessitates suspicious activity report (SAR) filing, the SAR supporting documentation should (Select Two.)

• A.include all documents or records that assisted the Fl in making the determination that the activity required a filing.
• B.have written policies and procedures to maintain supporting documentation.
• C.always be limited to account name, account details, and transaction records.
• D.be saved in a single separate file with hard copies stored in a fireproof cabinet.

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