Module 2 (Part 2) Flashcards
What does the 2012 Revision of the FATF 40 Recommendations state
some customer types pose heightened risks, and recommend additional customer due diligence on specific customers and activities
What are the 6 areas listed
- PEPs
- Cross-Border Correspondent Banking
- Money or Value Transfer Services
- New technologies
- Wire Transfers
- Transparency and Beneficial Ownership of Legal persons and arrangements
Appropriate steps must be taken to _________ PEPs
identify
including what 3 steps
- obtaining senior management approval of such business relationships
- taking measures to establish the sources of wealth and funds
- conducting ongoing monitoring
Regarding cross-border correspondent banking, appropriate steps must be taken to understand what 4 things about the institutions
- The institutions business,
- reputation
- Supervision,
- AML controls
What should countries ensure about Money or Value Transfer Services
that they are licensed or registered
Subject to AML requirements
What should countries and financial institutions assess regarding new technologies
the risks associated with the development of new products, business practices, deliver mechanisms, and technology
What should countries require regarding wire transfers
they should require financial institutions to obtain and send required and accurate originator, intermediary, and beneficiary information with wires
what should financial instutions monitor wires for
incomplete information and take appropriate measures
what should they also monitor wires for
for those involving parties designated by the UN Security council
what should they do if they involve such parties
take freezing actions or otherwise prohibit the transactions from occurring
Regarding transparency and beneficial ownership of legal persons and arrangements what should countries do
take appropriate measures to prevent the misuses of legal persons for money laundering or terrorist financing,
including what
ensuring information about the BO and control of such legal persons is available to competent authorities
particularly with regard to what types of legal persons
legal persons that can issue bearer shares or have nominee shareholders or directors
how many members is FATF currently comprised of
35 member jurisdictions and 2 regional organizations
what are the 2 regional organizations
the gulf cooperation council
European commission
What else are there in the organization
31 associate members or observers of FATF
What are the first 10 members of FATF
- Argentina
- Australia
- Austria
- Belgium
- Brazil
- Canada
- China
- Denmark
- Finland
10 France
What are the second group of 10
- Germany
- Greece
- Hong Kong (China)
- Iceland
- India
- Ireland
- Italy
- Japan
- Korea
- Luxembourg
What is the third group of 10
- Malaysia
- Mexico
- Netherlands
- New Zealand
- Norway
- Portugal
- Russian Federation
- Singapore
- South Africa
- Spain
What are the final 5
- Sweden
- Switzerland
- Turkey
- United Kingdom
- United States
What is the primary global standard-setter for the prudential regulation of banks
The Basel Committee on Banking Supervision
What kind of forum does it provide
cooperation on banking supervisory matters
what is the committees mandate
to strengthen the regulation, supervison and practices of banks worldwide with the purpose of enhancing financial stability
What paper did the basel committee publish in october of 2001
Customer Due Diligence for Banks
what are the 4 areas it 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
what does the paper specify as the four key elements of KYC program
- Customer identification
- Risk management
- Customer acceptance
- Monitoring
Banks should not only establish the identity of their customers, but what
should also monitor account activity to identify transactions that do not conform to the normal or expected transactions for that customer or type of account
Should numbered accounts be prohibited?
No
but what
should be subjected to exactly the same KYC procedures as other customer accounts
What does the paper also identify
specific customer identification issues related to higher risk customers
what should banks develop
customer acceptance policies and procedures
what should these policies and procedures describe
background, country of origin, business activities, and other risk indicators
what is the second bullet point
banks should use standard identification procedures when dealing with non face to face customers
what is the third
banks should provide periodic bank-wide employee training that explains the importance of the KYC policies and AML requirements
what is the final bullet point
conduct continued monitoring of high risk accounts by compliance personnel to obtain a greater understanding of the customers’ “normal activities” and to enable the updating of identification papers and the detection of suspicious transaction patterns
