APP - Senior Associate

Job Description:

Sanctioned Countries & Risk Countries

1. Which countries are currently under sanctions by the U.S., EU, or UN?
   • Answer: Countries like North Korea, Iran, Sudan, Russia, Ukraine, Serbia, Iraq are under sanctions. It's crucial for financial institutions to monitor and block transactions with entities from these countries.
2. What are the consequences for a financial institution if they fail to comply with sanctions?
   • Answer: Non-compliance can result in heavy fines, reputational damage, and even legal action. Financial institutions must implement robust sanctions screening processes.
3. How do you ensure transactions are not conducted with individuals or entities from sanctioned countries?
   • Answer: By utilizing sanction screening tools and databases like OFAC and the EU sanctions list, transactions are automatically checked, and any matches are flagged for further review.

Fraud Detection

1. What is an account takeover, and how can it be detected?
   • Answer: Account takeover occurs when a fraudster gains unauthorized access to a user's account. It can be detected through unusual login behavior, changes in account details, and irregular activity patterns.
2. What are the differences between phishing and account takeover?
   • Answer: Phishing involves tricking the user into providing personal information, while an account takeover occurs when the attacker uses stolen information to access and control an account.
3. What steps would you take if you detect a suspicious transaction related to fraud?
   • Answer: Immediate reporting to the compliance team, flagging the transaction, conducting an investigation, and filing a SAR (Suspicious Activity Report) if necessary.

AML (Anti-Money Laundering) & KYC (Know Your Customer)

1. What is the importance of KYC in financial institutions?
   • Answer: KYC helps verify the identity of clients, ensuring compliance with legal regulations and reducing the risk of fraud, money laundering, and terrorist financing.
2. What is the difference between CDD and EDD?
   • Answer: CDD (Customer Due Diligence) is the standard process for verifying a customer’s identity, while EDD (Enhanced Due Diligence) is applied to high-risk customers requiring a deeper level of investigation.
3. What is a SAR, and when do you file one?
   • Answer: A SAR is a report filed by financial institutions to notify regulators of suspicious activities. It is filed when a transaction or behavior indicates potential money laundering, fraud, or terrorist financing.
4. What are red flags that suggest suspicious activity?
   • Answer: Large transactions with no clear purpose, rapid movement of funds between accounts, and transactions with high-risk countries are examples of suspicious activity.

Risk Indicators & Compliance

1. What is the role of OFAC in managing sanctions?
   • Answer: OFAC (Office of Foreign Assets Control) monitors and enforces economic and trade sanctions against specific countries, entities, and individuals.
2. What is a PEP, and how do you manage the risk associated with PEPs?
   • Answer: A PEP (Politically Exposed Person) is an individual with a prominent political role. Risk is managed by applying enhanced due diligence (EDD) to PEPs, ensuring that all financial transactions are closely monitored.
3. How do you identify a suspicious pattern of transactions?
   • Answer: Using transaction monitoring systems, financial institutions can flag patterns such as large, frequent, or complex transactions that do not align with a customer's usual behavior.
4. What are the potential indicators of terrorist financing?
   • Answer: Unusual international transfers, frequent small transactions, and lack of clear commercial justification for payments can be indicators of terrorist financing.

AML Reporting and Tools

1. What are the key documents or information that need to be checked before filing a SAR?
   • Answer: Customer identification, transaction details, and the reasoning behind why the transaction is deemed suspicious should be thoroughly checked before filing a SAR.
2. What tools are used in financial institutions for transaction monitoring and fraud detection?
   • Answer: Transaction monitoring systems like Actimize, SAS, and NICE provide automated screening of transactions for suspicious activity. They use pattern recognition and AI to identify potential fraud or money laundering.
3. What is the role of internal reports like UAR in AML operations?
   • Answer: UARs (Unusual Activity Reports) are internal documents used by financial institutions to report suspicious activity or transactions within the institution, helping the compliance team to take appropriate action.
4. How do you ensure compliance with SOF (Source of Funds) and SOW (Source of Wealth) requirements?
   • Answer: Institutions gather documentation such as bank statements, tax returns, and employment records to verify a customer's source of funds and wealth to mitigate risks.

General Best Practices and Compliance Knowledge

1. How do you stay updated with the constantly changing regulations related to AML, KYC, and sanctions compliance?
   • Answer: By regularly reviewing updates from regulatory bodies like FINRA, the SEC, and the OFAC, subscribing to compliance newsletters, and participating in webinars and industry events.
2. How do you deal with high-risk customers that do not have sufficient documentation for KYC checks?
   • Answer: In such cases, enhanced due diligence (EDD) is applied. Additional verification, including third-party checks or a more detailed investigation into the customer’s financial background, may be required.