2024 Q4 AML Knowledge Quiz

Testing Your Anti-Money Laundering Expertise

Lan’s Enterprise Limited Training Program

Welcome to the Quiz

Test your understanding of:

Money laundering offences and stages
Suspicious Activity Reporting (SAR)
Customer Due Diligence (CDD) requirements
Politically Exposed Persons (PEP)
Compliance obligations
AML terminology and concepts

Instructions

How this quiz works:

10 questions covering key AML topics
Read each question carefully
Think about your answer before advancing
Correct answers and explanations will be revealed
Take your time and reflect on each question

Question 1

Money Laundering Offences

Which of the following acts is NOT considered to be a money laundering offence?

Dealing with any assets, knowing the property is proceeds of a crime
Dealing with any assets, believing the property is proceeds of a crime
Dealing with any assets, not knowing the property is proceeds of a crime

Think about it…

What level of knowledge or suspicion is required for an act to be a money laundering offence?

Question 1: Answer

Correct Answer:

Dealing with any assets, NOT knowing the property is proceeds of a crime

Explanation:

Money laundering offences require either:

Knowledge that property is proceeds of crime, OR
Belief or suspicion that property is proceeds of crime

Simply dealing with assets without knowledge, belief, or suspicion is not a money laundering offence.

Question 2

Money Laundering Stages

One of the important steps of money laundering is:

Depositing; withdrawing
Placement; layering
Backward; forward integration
Organisation; controlling

Think about it…

What are the three classic stages of money laundering?

Question 2: Answer

Correct Answer:

Placement; layering

Explanation:

The three stages of money laundering are:

Placement - Introducing illicit funds into the financial system
Layering - Obscuring the audit trail through complex transactions
Integration - Returning “clean” money to the criminal

Placement and layering are two of the three fundamental stages.

Question 3

Regulatory Requirements

Which of the following is a regulatory requirement of money remittance service provider employees?

Reporting a suspicious transaction
Reporting corruption
Reporting a crime

Think about it…

What is the specific AML/CFT obligation for financial service providers?

Question 3: Answer

Correct Answer:

Reporting a suspicious transaction

Explanation:

Under AML/CFT regulations, money remittance service providers and their employees have a legal obligation to:

Identify suspicious transactions
Report suspicious activity to authorities (SAR/STR)
Maintain records and documentation

This is a specific regulatory requirement, distinct from general crime reporting.

Question 4

Suspicious Activity Reporting

When should a Suspicious Activity Report (SAR) be made to the Authorities when you deal with your customer?

Whenever there are suspicious activity indicators making the transaction suspicious
Whenever indicators remain suspicious after review and clarification attempts have failed
For all transactions of US$1,000,000 and above

Think about it…

What level of due diligence is required before filing a SAR?

Question 4: Answer

Correct Answer:

Whenever there are suspicious activity indicators and the transaction remains suspicious, after all information has been reviewed and attempts to clarify the issues with the customer have failed

Explanation:

Proper SAR process:

Identify suspicious activity indicators
Review all available information
Attempt to clarify with the customer
If suspicion persists after investigation → File SAR

Don’t file prematurely or based solely on transaction amount. Due diligence first!

Question 5

Customer Due Diligence

Which of the following is NOT normally required for Customer Due Diligence (CDD)?

Know the spouse of the customer
Know the customer
Know the transaction

Think about it…

What information is essential for CDD compliance?

Question 5: Answer

Correct Answer:

Know the spouse of the customer

Explanation:

The CDD principle: “Know Your Customer, Know Your Transaction”

Required:

Know the customer (identity, background, risk profile)
Know the transaction (purpose, source of funds, nature)

Not normally required:

Spouse information (unless relevant to risk assessment or beneficial ownership)

Question 6

Online Gambling Money Laundering

Launderers typically use gambling accounts as means to acquire funds by:

Choose TWO answers:

Hedging
Depositing funds using stolen credit cards
Bonus seekers
Identity fraud

Think about it…

How do criminals exploit online gambling platforms for money laundering?

Question 6: Answer

Correct Answers:

Depositing funds using stolen credit cards
Identity fraud

Explanation:

Common online gambling money laundering methods:

Use stolen credit cards to deposit funds
Create accounts with fraudulent identities
Make minimal bets to avoid suspicion
Withdraw “winnings” as “clean” money
Exploit account-to-account transfers

Online platforms make it easier to layer and integrate illicit funds.

Question 7

Politically Exposed Persons

True or False:

We do not accept Politically Exposed Persons (PEP) as customers due to their prominent public function. Their position of influence can be used easily for bribery and corruption.

Think about it…

Should financial institutions refuse all PEP customers?

Question 7: Answer

Correct Answer:

FALSE

Explanation:

PEPs can be accepted as customers, BUT:

PEPs require enhanced due diligence (EDD)
Higher risk due to potential for bribery/corruption
Need senior management approval
Ongoing enhanced monitoring required
Source of wealth and funds must be verified

We don’t reject PEPs automatically - we manage the risk appropriately.

Question 8

Money Laundering Vulnerability

True or False:

Launderers are most vulnerable to being caught during the Integration stage – where money is returned to the criminal from what seem to be legitimate sources.

Think about it…

At which stage are criminals most exposed to detection?

Question 8: Answer

Correct Answer:

FALSE

Explanation:

Criminals are most vulnerable during the PLACEMENT stage.

Why Placement is riskiest:

First contact with financial system
Large amounts of cash are suspicious
Hardest to disguise illicit origins
Easiest for authorities to detect

By Integration stage:

Money has been layered multiple times
Origins obscured
Appears legitimate
Much harder to detect

Question 9

Layering Stage Definition

The laundering stage that separates the illicit money from its source, obscures the audit trails, and severs links with the original crime to make it appear like a normal financial transaction:

Entering in the system
Legitimising
Layering
Placement
Integration

Think about it…

Which stage involves complex transactions to hide the money trail?

Question 9: Answer

Correct Answer:

Layering

Explanation:

The three stages explained:

Placement - Entering illicit funds into financial system
Layering - Separating money from source through complex transactions, obscuring audit trails
Integration - Making “clean” money available to criminal through legitimate-appearing sources

Layering characteristics:

Multiple transactions across borders
Shell companies and complex structures
Makes tracing difficult
Severs link to original crime

Question 10

Tipping Off

Disclosing that an investigation is being contemplated on the customer’s account is considered as:

Layering
Suspicious transaction reporting
Failure to disclose
Tipping off
Integration

Think about it…

What happens if you warn a customer about an investigation?

Question 10: Answer

Correct Answer:

Tipping off

Explanation:

Tipping off is a serious offence:

Informing a customer that they’re under investigation
Warning someone about a SAR being filed
Disclosing information that might prejudice an investigation

Consequences:

Criminal penalties
Undermines AML/CFT efforts
Allows criminals to hide evidence or flee
Can result in prosecution of the person who tips off

NEVER disclose investigations or SARs to customers!

Quiz Complete!

How did you do?

Take a moment to reflect on:

Questions you found challenging
Concepts you need to review
Areas for additional training
Real-world application of these principles

Key Takeaways

Remember These Critical Points

Money laundering requires knowledge or belief that property is proceeds of crime
- Not just any dealing with assets
Three stages: Placement → Layering → Integration
- Criminals most vulnerable at Placement stage
SAR filing requires proper investigation first
- Review, clarify, then report if suspicion persists

Key Takeaways (Continued)

Remember These Critical Points

CDD means “Know Your Customer, Know Your Transaction”
- Focus on customer identity and transaction purpose
PEPs require Enhanced Due Diligence, not automatic rejection
- Higher risk, but manageable with proper controls
Tipping off is a criminal offence
- Never disclose investigations or SARs to customers

Areas for Further Study

Continue Your Learning

Review AML/CFT Act and regulations in your jurisdiction
Study your organization’s SAR procedures in detail
Practice identifying red flags in daily transactions
Understand Enhanced Due Diligence requirements
Familiarize yourself with reporting obligations and timelines

Remember: Compliance is everyone’s responsibility!

Contact & Resources

For Further Information

AML Compliance Team: aml@gmfinance.co.nz
Emergency Hotline: +64 09-309-8808
Training Program: Lan’s Enterprise Limited

Questions or Concerns?

Don’t hesitate to reach out to the compliance team for:

Clarification on any quiz questions
Guidance on real-world scenarios
Additional training materials
SAR reporting procedures

Thank You

Stay Vigilant, Stay Compliant

Next Steps:

Review any questions you missed
Discuss challenging scenarios with your team
Apply this knowledge in your daily work
Stay updated on AML/CFT developments