Chapter 2 (Part 2) Flashcards
What is the Wolfsberg Group
an association of 13 global banks that aims to develop financial services industry standards and guidance related to KYC/AML and counter terrorist financing policies
what do the wolfsberg anti-money laundering principles for private banking state
banks must “endeavor to accept only those clients whose source of wealth and funds can be reasonably established to be legitimate.”
what are 3 situations that the principles list that require EDD
- PEPs
- people residing in and/or having funds from high-risk countries
- people involved in types of economic or business activities or sectors known to be susceptible to ML
when also may clients require greater scrutiny (4 situations)
- info gained from monitoring their activities
- external inquiries
- negative news
- other factors that may expose the bank to rep risk
what was one of the key revisions made in 2001 for the wolfsberg principles related to
the prohibiton of the use of internal non client accounts to keep clients from being linked to the movement of funds on their behalf
what are these accounts called
concentration accounts
what are the first 4 of 8 recommendations from wolfsberg regarding terrorism
- providing official lists of suspected terrorists on a globally coordinated basis by relevant authorities
- including adequate information in the lists to help institutions search customer databases efficiently
- providing prompt feedback to institutions following circulation of the official lists
- providing information on the manner, means, and methods used by terrorists
what are 5-8
- developing government guidelines for business sectors and activities identified as high risk for terrorism financing
- developing uniform global formats for funds transfers that assist in the detection of terrorism financing
- protecting financial institutions with safe harbor immunity to encourage them to share information and to report to authorities
- performing EDD for business relationships with remittance businesses, exchange houses, casas de cambia, bureax de change and money transfer agents
in 2002 wolfsberg issued guidelines on AML principles for correspondent banking, what is recommended
due diligence should be risk based and on an ongoing basis
what elements should be considered when conducting due diligence
- geographic risk
- branches, subsidieres and affiliates of correspondent banking clients and of the institution
- ownership and management structures of the correspondent banking client
- clients customer base and business
- clients products and services
- clients regulatory status and history
- clients anti money laundering controls
- clients dealings with shell banks
- visits to the clients business
- EDD regarding the involvement of PEPs with the correspondent banking client and downstream correspondent (nested) relationships the correspondent provides
- The principles should be part of a financial institution’s larger AML program including anti bribery and corruption, fraud and evasion of sanctions
What is the deal with the world bank and international monetary fund
These organizations work together and in conjunction with FATF to encourage countries to have adequate anti-money laundering laws and to review AML laws and procedures of FATF member countries.
what premise do key provisions of the USA Patriot Act stem from
international access points to the US financial system must be controlled
what does section 311 do
provides the US treasury department 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 the treasury secretary determined to be a “primary money laundering concern”
by designating a country or financial institution as a primary ML concern, what can the government do
force US banks to halt many of their financial dealings with the designee
once designated, the US government can force a bank to follow one or more 5 special measures, what are those
- keep records and/or file reports on certain financial transactions
- obtain info on the BO of any account opened or maintained in the US by a foreign person or a foreign person’s representative
- identify and obtain information about customers who are permitted to use, or whose transactions are routed through, a foreign banks payable through account
- identify and obtain information about customers permitted to use, or whose transactions are routed through, a foreign bank’s correspondent account
- close certain payable through or correspondent accounts
