Chapter 3 - Concept of Money Laundering and Terrorist Financing

Question 1

What are the 2 main ways TF differs from ML?

Answer 1

1. Small sums of money are required for terrorist acts making identification and tracking more difficult.
2. If legitimate funds are used to finance terrorist acts, it’s hard to determine at what stage legit funds became terrorist funds.

Question 2

What is the FATF?

Answer 2

A body which has issued recommendations for minimum standards for action in different countries to ensure AML and anti TF efforts are consistent internationally.

Question 3

What is the Wolfsberg Group

Answer 3

A group of banks that has issued guidance in relation to private banking and correspondence banking.

Question 4

What are the stages of money laundering?

Answer 4

1. Placement
2. Layering
3. Integration

Question 5

What is now increasingly being used to carry out placement?

Answer 5

The conversion of actual currency for cryptocurrency.

Question 6

Which stage of the money laundering process presents the biggest risk to financial services firms.

Answer 6

Layering stage - the exchanging of one asset for another, or changing the registered owners of an asset.

Question 7

How might firms make it difficult for criminals to integrate their money?

Answer 7

Creating sufficient records.

Question 8

What forms can money laundering take?

Answer 8

1. Turning dirty money into clean money.
2. Handling proceeds of crime such as theft, fraud or tax evasion.
3. Handling stolen goods.
4. Direct involvement or facilitating the laundering of any criminal or terrorist property.
5. Investing the proceeds of crime in financial products.