Mohammed Favas K.t

AML/KYC/Fraud Investigation Interview Questions & Answers Are you preparing for an AML, KYC, or Fraud Investigation interview? Here are some key questions and answers to help you succeed: 1. What’s the difference between AML and KYC? Answer: AML (Anti-Money Laundering) refers to laws and measures designed to prevent money laundering. KYC (Know Your Customer) is a crucial component of AML, focusing on verifying customer identities and assessing risk. While KYC is primarily a preventive measure, AML covers both prevention and investigation of financial crimes. 2. What are the key red flags for money laundering? Answer: • Large cash deposits that don’t align with the customer’s profile. • Transactions structured to remain below reporting thresholds. • Fund transfers to high-risk jurisdictions. • Rapid movement of funds between multiple accounts (layering). • Shell companies with unclear ownership structures. 3. What is Enhanced Due Diligence (EDD), and when is it required? Answer: EDD is an in-depth verification process applied to high-risk individuals or entities, such as politically exposed persons (PEPs) or high-net-worth clients. It involves additional checks, verification of the source of wealth, and continuous monitoring. EDD is required when a customer presents an increased risk of financial crime. 4. How do you investigate a potentially fraudulent transaction? Answer: 1. Analyze transaction details for inconsistencies. 2. Review the customer’s profile and transaction history. 3. Identify red flags such as unusual or high-risk transfers. 4. Utilize fraud detection tools and sanctions screening. 5. Escalate or file a Suspicious Activity Report (SAR) if necessary. 6. Document findings and suggest appropriate actions. 5. What is a Politically Exposed Person (PEP), and why is it considered a risk? Answer: A PEP is an individual holding a high-level public position or someone closely associated with government officials. Due to their influence, PEPs pose a higher risk for corruption and money laundering. Financial institutions conduct Enhanced Due Diligence (EDD) to mitigate these risks. Stay tuned for more insights follow for updates!

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🚨ACAMS / CAMS Certification Prep – MCQ Series: Day 1 🎓 Test Your AML Knowledge Before the Exam Q1. Which of the following is NOT a stage of money laundering? A) Placement B) Layering C) Integration D) Structuring ✅ Answer: D – Structuring is a technique used in the placement stage, not a separate stage. Q2. Which organization issues the “40 Recommendations” for AML? A) FATF B) FinCEN C) IMF D) Basel Committee ✅ Answer: A – FATF (Financial Action Task Force) issues the 40 Recommendations. Q3. In a risk-based approach, which customer should receive Enhanced Due Diligence (EDD)? A) Local retail store owner B) Politically Exposed Person (PEP) C) Student with part-time job D) Pensioner ✅ Answer: B – PEPs have higher inherent risk. Q4. Which of the following is a red flag for trade-based money laundering (TBML)? A) Matching shipping documents B) Over/under-invoicing of goods C) Timely payments D) Single shipment per year ✅ Answer: B – Over/under-invoicing is a known TBML method. Q5. What is the primary purpose of sanctions screening? A) To check for money laundering B) To identify prohibited transactions or parties C) To verify customer income D) To calculate tax obligations ✅ Answer: B – Sanctions screening prevents dealings with prohibited persons/entities. Q6. Which document formally reports suspicious activity to authorities in the U.S.? A) STR B) CTR C) SAR D) KYC Form ✅ Answer: C – SAR (Suspicious Activity Report) is filed with FinCEN in the U.S. Q7. Which is an example of “Placement” in money laundering? A) Buying real estate with illicit funds B) Wire transfers through multiple jurisdictions C) Depositing cash into a casino account D) Converting funds into gold offshore ✅ Answer: C – This is placing illicit funds into the financial system. Q8. Which global body sets AML/CFT standards internationally? A) FATF B) FBI C) World Bank D) SEC ✅ Answer: A – FATF is the global standard setter for AML/CFT. Q9. Which of the following is part of Customer Due Diligence (CDD)? A) Filing an STR B) Identifying beneficial owners C) Closing an account D) Sending wire transfers ✅ Answer: B – Identifying beneficial owners is a key CDD step. Q10. A customer frequently sends small wire transfers just below the reporting threshold to multiple foreign accounts. This is an example of: A) Smurfing B) Integration C) EDD D) Risk-based approach ✅ Answer: A – Smurfing is breaking transactions to avoid detection. 💡 Pro Tip: Practice daily. Read the explanation — CAMS is about understanding why, not just memorizing. 📢 Next: Day 2 – Another 10 Realistic CAMS MCQs with Answers & Explanations 🔔 Follow for daily CAMS prep & free resources. #CAMS #ACAMS #CAMSPrep #AML #KYC #FinancialCrime #ComplianceCareers #AMLTraining #RiskManagement #Certification #AntiMoneyLaundering #LinkedInLearning

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🔍 Money Laundering vs. Terrorist Financing In financial crime compliance, knowing the difference is vital: 💰 Money Laundering (ML) – Illegitimate money trying to look legitimate. 🎯 Terrorist Financing (TF) – Legitimate or illegitimate funds directed toward illegitimate ends. Both threaten the integrity of the financial system—but their sources, flows, and goals differ. Recognizing these nuances is what keeps compliance professionals a step ahead. 👉 How does your team ensure strong controls against both ML & TF? #AML #CFT #Compliance #ACAMS #FinancialCrime #RiskManagement #FraudPrevention

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P-4 How an AML investigation actually works: how alerts are generated, when investigations start, how analysts review them: 1. Triggering of an Alert An AML investigation does not start randomly; it begins when the monitoring system detects unusual activity that breaks defined rules. Every bank or financial institution sets up Transaction Monitoring Systems (TMS) which automatically scan customer transactions against pre-set thresholds, typologies, and scenarios. Examples of alert triggers: A customer deposits ₹10,00,000 in cash within one day. Multiple smaller deposits (₹49,000, ₹48,000) to avoid reporting threshold → structuring/smurfing. Funds moving frequently between multiple accounts without clear purpose. Transactions with high-risk jurisdictions (tax havens, sanctioned countries). Unusual activity compared to the customer profile (e.g., student account receiving heavy business transfers). When such a red flag is detected, the system generates an alert. 2. Case Creation Once an alert is generated, it is sent to the AML Case Management System where it becomes a “case” assigned to an investigator. The case file usually includes: Transaction details (date, time, amount, counterparties). Customer profile (KYC data, occupation, income level, country). Historical account activity. Any existing risk rating (high, medium, low). 3. Start of Investigation An AML investigator/analyst begins by reviewing the case step by step: Step 1: Understand the Customer Who is the customer? (individual or corporate) What is their risk profile? (low, medium, high) What does their business or occupation suggest about expected transactions? Step 2: Analyze the Alert Transaction(s) Was it a one-time anomaly or repeated pattern? Does the transaction make sense compared to the customer’s background? Are there signs of structuring, layering, or shell company involvement? Step 3: Perform Screening Run the customer and counterparties through sanctions lists (OFAC, UN, EU, RBI). Check for PEP (Politically Exposed Person) status. Conduct Adverse Media checks for negative news (fraud, gambling, drug trafficking, etc.). Step 4: Gather Additional Information Request documents from the Relationship Manager (e.g., invoices, contracts). Compare with expected customer behavior. Decision-Making in Investigation Once analysis is complete, the investigator must decide the outcome of the alert. Possible outcomes: False Positive True Positive (Suspicious Case) Request for Information (RFI) #Check #P-5 for next step AML #KYC #EDD #TransactionMonitoring #FalsePositive #FinancialCrime #AntiMoneyLaundering #Compliance #RiskManagement #SanctionsScreening #STR #SAR #CDD #KYB #FIU #FATF #BSA #AMLInvestigation #FraudPrevention #CFT #AMLTraining

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🚨 High-Level AML/KYC Interview Q&A You Can’t Miss in 2025 🚨 If you want to crack top AML/KYC interviews, memorizing definitions won’t work anymore. Hiring managers look for strategic thinking and real-world application. Here are 5 questions with winning answers 👇 ⸻ Q1: How do you differentiate between a false positive and a true hit in sanctions screening? ✅ Answer: Start by validating the identifiers (DOB, passport, address). Use fuzzy matching logic to eliminate spelling variations. If multiple data points align with the sanctions list, escalate as a true hit. If only the name matches but other identifiers don’t, document the rationale and close as a false positive. ⸻ Q2: How do you prioritize alerts in transaction monitoring when facing large volumes? ✅ Answer: Apply a risk-based approach. High-risk jurisdictions, unusual transaction patterns, and repeat suspicious behavior get reviewed first. Use automated tools/risk scoring for low-risk cases to save time. Always maintain documentation for audit readiness. ⸻ Q3: How do you approach Enhanced Due Diligence (EDD) for Politically Exposed Persons (PEPs)? ✅ Answer: Begin with a deep background check using reliable databases and adverse media. Assess Source of Wealth (SOW) and Source of Funds (SOF) using tax filings, company ownership structures, and open-source intelligence. Apply continuous monitoring since PEP risk changes with political influence and exposure. ⸻ Q4: How do you investigate potential trade-based money laundering (TBML)? ✅ Answer: Look for red flags such as over/under invoicing, inconsistent shipping documents, unusual trade routes, or commodities that don’t match the customer’s business profile. Use dual verification (shipping data + payment flow) and escalate to compliance if patterns indicate layering or round-tripping. ⸻ Q5: How do you handle regulatory audits or inspections? ✅ Answer: Ensure documentation is watertight—from KYC files to transaction monitoring cases. Align internal policies with FATF, local regulations, and global best practices. During audits, be transparent: highlight what’s working, but also acknowledge gaps and explain remediation steps in progress. ⸻ ✨ Pro Tip: Don’t just answer—back your response with tools (Actimize, SAS, World-Check, Fircosoft) or real scenarios you’ve worked on. That’s how you stand out. #AML #KYC #FinancialCrime #ComplianceCareers #AMLAnalyst #KYCAnalyst #ComplianceJobs #CareerGrowth

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🚀 Great Learning Opportunity! If you are working in KYC / AML / Compliance or planning to build your career in this domain, here’s something useful for you. 👉 Riskpro is offering a few free courses related to KYC and AML. ✅ Learn industry-relevant concepts ✅ Get certified on completion ✅ Enhance your professional profile Explore the courses here: https://lnkd.in/dqgarFdv Don’t miss this chance to upskill and strengthen your expertise in the compliance and financial crime domain. Follow Ravinder Singh Ougde for more updates. #KYC #AML #RiskManagement #Compliance #Learning #Certification #CareerGrowth

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