6_Money Laundering Flashcards

1
Q

What is money laundering?

A

Making money earned from crimes look like it came from legal activities.

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2
Q

Name the three stages of money laundering

A

Placement, Layering, Integration

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3
Q

What does the ‘Placement’ stage do in money laundering?

A

Puts illegal money into the financial system

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4
Q

What does the ‘Placement’ stage do in money laundering?

A

Puts illegal money into the financial system

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5
Q

What does the ‘Layering’ stage do in money laundering?

A

Hides where the money originally came from using complicated transactions.

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6
Q

What happens in the ‘Integration’ stage of money laundering?

A

Makes the money look like it was earned legally

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7
Q

What group works to make money laundering laws the same around the world?

A

Financial Action Task Force (FATF)

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8
Q

What did the EU directive of 2001 do for money laundering?

A

Made rules to hide and disguise the criminal origin of money the same across EU countries.

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9
Q

How does money laundering hurt businesses and the economy?

A

Damages fair business competition and causes loss of tax money.

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10
Q

What is a Suspicious Activity Report (SAR)?

A

A report that banks make when they see possibly illegal financial activities.

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11
Q

Why are money laundering regulations strict for banks?

A

Banks need to follow strong rules to spot and stop money laundering.

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12
Q

Why is it important to know who really owns the laundered money?

A

Helps find out who benefits from the crime and breaks down the laundering scheme.

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13
Q

What might criminals say to hide the illegal source of their money?

A

They might claim the money came from a legal business or a sudden gain.

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14
Q

How do banks prevent money laundering?

A

Use a system to check and manage risks from illegal money activities.

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15
Q

How is money put into the financial system during ‘placement’?

A

Through fake business deals or wrong invoicing.

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16
Q

What is common in the ‘integration’ stage?

A

Buying expensive things like houses or cars to show the money as earned legally.