International AML CFT Standards (Part 1) Flashcards
what are the three main activities FATF has focused on
- Standard Setting
- Ensuring effective compliance with the standards
- identifying money laundering and terrorist financing threats
what are the 5 areas the 40 recommendations cover
- the identification of risks and development of appropriate policies
- the criminal justice system and law enforcement
- the financial system and its regulation
- the transparency of legal persons and arrangements
- international cooperation
according to FATF when should financial institutions conduct CDD
when they
- establish business relations
- cary out an occasional transaction or wire transfer above the specified threshold
- have a suspiciou of ML and TF
- have doubts about the veracity or adequacy of previously obtained customer identification information
in the 40 recommendations what are the expanded coverage of industries
casinos
real estate agents
DPM
lawyers, notaries, and independent legal professionals and accountants when they prepare or carry out transactions
trust and company service providers
what are the two public documents that FATF uses to identify countries with AML deficiencies
Public Statement
Improving Global AML/CFT Compliance: ongoing process
what is the difference between the 2
the public statement identifies countries or jurisdictions with strategic deficiencies that are so serious that FATF calls on its members and non members to apply conter measures
Improving Global AML/CFT compliance; ongoing process - identifies countries or jurisdictions with strategic weaknesses in AML/CFT measures but that have provided a high level of commitment to an action plan developed with the FATF
What is the basel committee on banking supervision
global standard-setter for the prudential regulation of banks and provides a forum of cooperation on banking supervisory matters
what are the 4 areas that customer due diligence for banks addresses
- importance of KYC standards for supervisors and banks
- essential elements of KYC standards
- The role of supervisors
- Implementation of KYC standards in a cross-border context
according to the paper, what are the four key elements of a KYC program
- customer identification
- risk management
- customer acceptance
- monitoring
who should audit report to
the audit committee of the BOD
what are the 3 principles of the FATF syle regional bodies
role
autonomy
reciprocity
what is their role
they play a roll in identifying and addressing AML/CFT technical assistance needs for their individual members
what is autonomy
FATF and FSRBs are free standing organizations that share the common goals of combating ML and the financing of terrorism and proliferation and of fostering effective AML/CFT systems
what is reciprocity
FATF and FSRBs operate on the basis of mutual or joint or common recognition of their work, which implies that FSRBs and FATF put in place similar mechanisms for effective participation and involvement in each other’s activities
What does the Egmont group consist of
a group of FIUs
what is the goal of the group
to provide a forum for FIUs around the world to improve cooperation in the fight against money laundering and financing of terrorism and to foster the implementation of domestic programs in this field
what are the 5 Egmont principles
expanding and systematizing cooperation in the reciprocal exchange of information
increasing the effectiveness of FIUs by offering training and promoting personnel exchanges to improve the expertise and capabilities of personnel employed by FIUs
Fostering better and secure communication among FIUs through the application of technology such as the Egmont secure web
promoting the operational autonomy of FIUs
promoting the establishment of FIUs in conjunction with jurisdictions with an AML.CFT program in place or in areas with a program in the early stages of development
the FIUs in action, 100 sanitized cases identified 6 of the most frequently observed indicators of ML, what are they
- large scale cash transactions
- atypical or uneconomical fund transfers to or from a foreign jurisdiction
- unusual business activity or transactions
- large and/or rapid movement of funds
- unrealistic wealth compared to client profile
- defensive stance to questioning
what is the wolfsberg group
association of 13 global banks that aims to develop financial service industry standards and guidance related to know your customer anti-money laundering and counter terrorist financing policies
what is the first paper that the wolfsberg published
AML principles for private banking
what controls do these principles recommend
controls that range from the basic, such as customer identification, to EDD such as heightened scrutiny of individuals who have or have had positions of public trust
what are the 3 situations that the principles list that require EDD
PEPs
people residing in or having funds from High risk countries (think NRAs)
people involved in types of businesses known to be susceptible to money laundering
what are the first 4 of 8 wolfsberg recommendations on the suppression of 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 the second 4 of 8 wolfsberg recommendations on the suppression of terrorism
- 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 info and to report to authorities
- performing EDD on business relationships with remittance businesses
