AML Standards Part 2

Question 1

what did the first EU directive confine predicate offenses of ML to

Answer 1

drug trafficking

Question 2

what did the second expand it to

Answer 2

to cover not just drug trafficking, but all serious crimes, including corruption and fraud against the financial interests of the European Community

Question 3

what was the first big change of the third directive

Answer 3

defined ML and TF as separate crimes

Question 4

what else did it extend regarding customer identification and suspicious activity reporting obligations

Answer 4

to trusts and company service providers, life insurance intermediaries, and dealers selling goods for cash payments of more than 15,000 euros

Question 5

what is the first big change for the 4th directive

Answer 5

the threshold for entities obliged to report suspicious transactions decreased from 15k to 10k euros

Question 6

what is the second regarding gambling

Answer 6

the scope of obliged entities was enlarged from just casinos to all providers of gambling services

Question 7

what is the third regarding CDD

Answer 7

CDD is to be applied for transfers of funds exceeding 1,000 euros

Question 8

who doe the USA patriot act have implications for

Answer 8

US institutions and non-US institutions that do business in the US

Question 9

what premise do key provisions of the act stem from

Answer 9

that international access points to the US financial system must be controlled

Question 10

what is section 311 entitled

Answer 10

special measures for primary money laundering concerns

Question 11

what does this section provide

Answer 11

the US treasury dept with the authority to apply graduated proportionate measures against a foreign jurisdiction, foreign financial institution, a type of international transaction, or a type of account that

Question 12

that what

Answer 12

the treasury secretary determines to be a “primary money laundering concern.”

Question 13

by designating a country or a financial institution as a primary money laundering concern, what can the US government do

Answer 13

force US banks to halt many of their financial dealings with the designee

Question 14

what are the 5 special measures

Answer 14

1. keep records or file reports on certain financial transactions
2. obtain information on BO
3. obtain info about customers who are permitted to use a foreign bank’s payable through account
4. obtain info about customers who are permitted to use a foreign bank’s correspondent account
5. close certain payable-through or correspondent accounts

Question 15

what does section 312 deal with

Answer 15

correspondent and private banking accounts

Question 16

what are the three measures that a due diligence program must address regarding correspondent banking

Answer 16

1. determining whether EDD is necessary
2. assessing the ML risk presented by the correspondent account
3. applying risk-based procedures and controls reasonably designed to detect and report suspected ML

Question 17

what is a private banking account defined as under the rule

Answer 17

an account with a minimum aggregate deposit of 1 million dollars

for one or more non us people and

which is assigned to a bank employee acting as a liaison with the non-US person

Question 18

for covered private banking accounts US institutions must take reasonable steps to what (4 bullets)

Answer 18

1. ascertain the identity of all nominal and beneifical owners of the accounts
2. ascertain whether any such owner is a SPF
3. ascertain he source of the funds in the account and the purpose and expected use of the account
4. monitor the account to ensure the activity is consistent with the information provided as to the source of funds and the purpose and expected use of the account

Question 19

what is section 313

Answer 19

prohibition non correspondent accounts for foreign shell banks

Question 20

what is the term physical presence defined as

Answer 20

a place of business that is maintained by a foreign bank located at a fixed address (as opposed to solely an electronic address) where

Question 21

where what

Answer 21

it is authorized to conduct banking activities

employs one or more individuals on a full time basis at that location

maintains operating records at that location

is subject to inspection by the banking authority which licensed it at that location

Question 22

what does 314 a allow

Answer 22

law enforcement agencies through fincen to reach out to obtain info

Question 23

what does 314 b allow

Answer 23

provides financial institutions with the ability to share info with one another under a safe harbor that offers protections from liability.

Question 24

what is 319 called

Answer 24

forfeiture from US correspondent account

Question 25

what occurs here

Answer 25

in situations where funds have been deposited with a foreign bank, this section permits the US government to seize funds in the same amount from a correspondent bank account in the US that has been opened and maintained for the foreign bank

Question 26

is the government required to trace the funds

Answer 26

no, because they are deemed to have been deposited into the correspondent account

Question 27

what is 319 b called

Answer 27

records relating correspondent accounts for foreign banks

Question 28

what happens here

Answer 28

allows the appropriate federal banking agency to require a financial institution to provduce within 5 days records or information related to the instiuttions aML compliance or related to a customer of the institution