AML Standards Part 2 Flashcards
what did the first EU directive confine predicate offenses of ML to
drug trafficking
what did the second expand it to
to cover not just drug trafficking, but all serious crimes, including corruption and fraud against the financial interests of the European Community
what was the first big change of the third directive
defined ML and TF as separate crimes
what else did it extend regarding customer identification and suspicious activity reporting obligations
to trusts and company service providers, life insurance intermediaries, and dealers selling goods for cash payments of more than 15,000 euros
what is the first big change for the 4th directive
the threshold for entities obliged to report suspicious transactions decreased from 15k to 10k euros
what is the second regarding gambling
the scope of obliged entities was enlarged from just casinos to all providers of gambling services
what is the third regarding CDD
CDD is to be applied for transfers of funds exceeding 1,000 euros
who doe the USA patriot act have implications for
US institutions and non-US institutions that do business in the US
what premise do key provisions of the act stem from
that international access points to the US financial system must be controlled
what is section 311 entitled
special measures for primary money laundering concerns
what does this section provide
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
that what
the treasury secretary determines to be a “primary money laundering concern.”
by designating a country or a financial institution as a primary money laundering concern, what can the US government do
force US banks to halt many of their financial dealings with the designee
what are the 5 special measures
- keep records or file reports on certain financial transactions
- obtain information on BO
- obtain info about customers who are permitted to use a foreign bank’s payable through account
- obtain info about customers who are permitted to use a foreign bank’s correspondent account
- close certain payable-through or correspondent accounts
what does section 312 deal with
correspondent and private banking accounts
what are the three measures that a due diligence program must address regarding correspondent banking
- determining whether EDD is necessary
- assessing the ML risk presented by the correspondent account
- applying risk-based procedures and controls reasonably designed to detect and report suspected ML
what is a private banking account defined as under the rule
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
for covered private banking accounts US institutions must take reasonable steps to what (4 bullets)
- ascertain the identity of all nominal and beneifical owners of the accounts
- ascertain whether any such owner is a SPF
- ascertain he source of the funds in the account and the purpose and expected use of the account
- 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
what is section 313
prohibition non correspondent accounts for foreign shell banks
what is the term physical presence defined as
a place of business that is maintained by a foreign bank located at a fixed address (as opposed to solely an electronic address) where
where what
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
what does 314 a allow
law enforcement agencies through fincen to reach out to obtain info
what does 314 b allow
provides financial institutions with the ability to share info with one another under a safe harbor that offers protections from liability.
what is 319 called
forfeiture from US correspondent account
what occurs here
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
is the government required to trace the funds
no, because they are deemed to have been deposited into the correspondent account
what is 319 b called
records relating correspondent accounts for foreign banks
what happens here
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
