Corporate Anti Money Laundering Interview Question and Answers

Last Updated on Sep 1, 2025, 2k Views

Corporate Anti Money Laundering interview question and answers

🔹 General AML Knowledge
Q1. What is Money Laundering? Explain its stages.
A1. Money laundering is the process of disguising the origins of illegally obtained funds to make them appear legitimate.
The three stages are:
- Placement – Introducing illicit funds into the financial system (e.g., deposits, smuggling cash).
- Layering – Moving money through complex transactions to obscure its source (e.g., wire transfers, shell companies).
- Integration – Reintroducing laundered money into the legitimate economy (e.g., investments, real estate).
🔹 Corporate AML Framework
Q2. What is the role of AML in a corporate environment?
A2. In a corporate setting, AML ensures the company is not used for financial crime. This includes:
- Screening clients, vendors, and third parties against sanctions/PEP lists.
- Conducting customer due diligence (CDD) and enhanced due diligence (EDD).
- Monitoring transactions for unusual activity.
- Reporting suspicious transactions to regulatory authorities (STR/SAR).
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🔹 Regulations & Compliance

Q3. Which major global AML regulations and bodies should corporates comply with?
A3. Key regulations and bodies include:

FATF (Financial Action Task Force) – Sets global AML standards.
OFAC (Office of Foreign Assets Control) – U.S. sanctions screening.
EU AML Directives – Governs AML compliance in the EU.
FinCEN – U.S. Financial Crimes Enforcement Network.
Local regulators (e.g., RBI in India, FCA in UK, MAS in Singapore).

🔹 Due Diligence

Q4. What is the difference between KYC, CDD, and EDD?
A4.

KYC (Know Your Customer): Basic identity verification (name, DOB, address, ID).
CDD (Customer Due Diligence): Assessing customer risk, source of funds, nature of business.
EDD (Enhanced Due Diligence): Deeper investigation for high-risk clients (e.g., PEPs, sanction exposure, high-value transactions).

🔹 Corporate AML Red Flags

Q5. What are some red flags you would look for in corporate transactions?
A5.

Sudden large transfers inconsistent with business profile.
Payments routed through multiple shell companies.
Transactions involving high-risk or sanctioned jurisdictions.
Complex structures with no clear beneficial owner.
Over/under-invoicing in trade finance.

🔹 Sanctions & Screening

Q6. How do you handle a potential sanctions hit during screening?
A6.

Review the match (check identifiers like name, DOB, passport, location).
Use public domain research (media, company filings).
Escalate to compliance if it appears to be a true match.
If confirmed, block the transaction and file a Suspicious Transaction Report (STR).

🔹 Corporate AML Programs

Q7. What are the key elements of an effective corporate AML program?
A7.

Governance and a clear compliance framework.
Risk assessment of customers, products, and geographies.
CDD & EDD procedures.
Ongoing transaction monitoring.
Sanctions screening.
Training & awareness for employees.
Independent audit & testing.

🔹 Scenario-Based

Q8. If a long-standing corporate client suddenly starts sending large payments to a sanctioned country, how would you respond?
A8.

- Review the transaction details and customer profile.
- Check if there are exemptions or licenses.
- Escalate to compliance immediately.
- Block the transaction if prohibited.
- File a SAR/STR with the regulator.

🔹 Technology & Tools

Q9. What AML tools or systems are you familiar with?
A9. Examples:

Screening & KYC tools: World-Check, Dow Jones, Refinitiv, LexisNexis.
Transaction monitoring systems: Actimize, SAS AML, FICO TONBELLER, Oracle Mantas.
Workflow tools: Fircosoft, ComplyAdvantage, Shufti Pro, etc.

🔹 Behavioral

Q10. Why do you want to work in Corporate AML Compliance?
A10.
“I am motivated by the challenge of preventing financial crime and protecting organizations from reputational and regulatory risks. I enjoy analytical work, staying updated on regulatory developments, and contributing to a strong compliance culture in the corporate world.”