Chapter 8 - money laundering

Question 1

What is placement in money laundering

Answer 1

Moving the money into a legitimate financial system, such as a bank account

Question 2

What is layering in money laundering

Answer 2

Creating a complex web of transactions to move money around the financial system

Question 3

What is integration in money laundering

Answer 3

Integrating illegal funds back into the legitimate financial system, such as by investing in property or other assets

Question 4

What does POCA stand for and set out?

Answer 4

Proceeds of crime act 2002
sets out principle money laundering offences and requirements

Question 5

What does TA stand for and do?

Answer 5

Terrorism act 2000
sets out principle terrorist financing offences

Question 6

What does MLR stand for and do?

Answer 6

Money laundering and terrorist finance regulations 2020
More detailed rules including what accountants should do with money laundering

Question 7

What is the punishment for money laundering?

Answer 7

Unlimited fine and/or a prison sentence of up to 14 years

Question 8

What is the punishment for terrorist financing?

Answer 8

Unlimited fine and/or a prison sentence of up to 14 years

Question 9

What are the two circumstances when a required disclosure must be made in an internal report or an SAR?

Answer 9

When the accountant wishes to provide services that are in relation to property which is known or suspected to relate to money laundering
When the accountant knows or suspects that another person is engaged in money laundering or terrorist financing

Question 10

What are the four minimum points an SAR must contain?

Answer 10

Identity of the suspected person like name and DOB
Information on which the suspicion of money laundering is based
The whereabouts of the laundered property
Details of the person making the report

Question 11

What is a protected disclosure?

Answer 11

When a required disclosure is submitted, this protects the person against allegations of a confidentiality breach

Question 12

What is an authorised disclosure?

Answer 12

When anyone realises they may have engaged or about to engage in money laundering, this provides them with a defence against money laundering charges

Question 13

What is concealing in money laundering?

Answer 13

Concealing or disgusing criminal property

Question 14

What is arrangement in money laundering

Answer 14

When a person enters into an arrangement which they know or susepcts faciliates the acquisition of criminal property

Question 15

What is acquisition in money laundering?

Answer 15

If a person aquires or has use of criminal property

Question 16

What is the penalty for failure to disclose?

Answer 16

five years in prison and/or a fine

Question 17

what is the penalty for tipping off

Answer 17

five years in prison and/or a fine

Question 18

What is CDD and what does it stand for

Answer 18

Customer due diligence
this is when the accountant investigates a client to see if they might be involved in money laundering or terrorist financing

Question 19

What three main things should CDD include?

Answer 19

Verifying the clients identity by looking at documents and other data
Understanding who the beneficial owners of a business are (owns more than 25%)
What the client wants from the relationship or transaction