Ethics - Money Laundering 2

Question 1

What is Customer Due Diligence (CDD)?

Answer 1

Identify the client and verify their identity based on a reliable independent source (e.g. passport, driving licence or electronic identification)

Question 2

What is Enhanced Due Diligence (EDD)?

Answer 2

Additional procedures required for transactions involving high-risk third countries, politically exposed persons (PEP) or their family members/associates

Question 3

What is a Politically Exposed Person (PEP)?

Answer 3

Someone entrusted with a prominent public function, presenting a higher risk for bribery and corruption

Question 4

What are some key requirements of the regulations for due diligence checks?

Answer 4

Limit of 10,000 Euros for cash acceptance, ongoing monitoring of business relationships, detailed record-keeping, appointment of senior staff/board member, and reporting of suspicions with a Suspicious Activity Report (SAR)

Question 5

What are the penalties for failure to comply with regulations?

Answer 5

Maximum 14 years prison sentence and/or unlimited fine for assisting with money laundering, maximum 5 years prison sentence and/or unlimited fine for tipping off or failing to report suspicion

Question 6

What is the typical requirement for money laundering checks for Customer Due Diligence (CDD)?

Answer 6

Evidence of constitution required based on the type of organization (e.g. public limited company, private limited company)

Question 7

What is important to note about the law, procedures, and guidance relating to money laundering?

Answer 7

They are constantly evolving, with the UK implementing the 7th EU Anti Money Laundering Directive into the discussed regulations