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CAMS > Module 2 (Part 3) > Flashcards

Module 2 (Part 3) Flashcards

1
Q

What is this topic on

A

EU directives on Money Laundering

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2
Q

When was the first EU directive on the prevention of the use of the financial system for the purpose of money laundering adopted

A

June of 1991

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3
Q

When was the second directive adopted

A

December of 2001

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4
Q

What did the second directive do

A

amend the first directive to require stricter money laundering controls across the continent

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5
Q

When was the third EU directive adopted

A

2005

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6
Q

what was it based on

A

elements of FATF’s revised 40 recommendations

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7
Q

When was the fourth EU directive adopted

A

June of 2015

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8
Q

what was the fourth directive on

A

the prevention of the use of the financial system for the purposes of money laundering and terrorist financing

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9
Q

What did the third directive do

A

extended the scope of the first and second directives

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10
Q

what is the first way in which it did that

A

defined money laundering and terrorist financing as separate crimes

The directive’s measures were expanded to cover not only the manipulation of money derived from crime, but also the collection of money or property for terrorist purposes

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11
Q

what is the second way in which it extended the scope of the first and second directives

A

extended customer identification and suspicious activity reporting obligations to trusts and company service providers, life insurance intermediaries, and dealers selling goods for cash payments of more than EUR 15,000

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12
Q

What is the third way

A

detailing a risk based approach to customer due diligence. The extent of due diligence that is performed on customers, whether simplified or enhanced, should be dependent on the risk of money laundering or terrorist financing they pose

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13
Q

what is the final way

A

requiring all financial institutions to identify and verify the “beneficial owner” of all accounts held by legal entties or person

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14
Q

what does BO refer to

A

the natural person who directly or indirectly controls more than 25 percent of a legal entity or person

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15
Q

When did the 4th directive enter into effect

A

June 26, 2015

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16
Q

How much time did members have to adapt those legislations

A

2 years from that date

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17
Q

What did the 4th directive do

A

repeal the third directive and the other 2

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18
Q

What is the first bulletpoint

A

The threshold for entities obliged to report suspicious transactions decreased

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19
Q

what did it decrease from to

A

15,000 to 10,000 euros

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20
Q

what is the second bullet point

A

the scope of obliged entities was enlarged from just casinos to all “providers of gambling services.”

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21
Q

What is the third bulllet point

A

customer due diligence is to be applied for transfers of funds exceeding 1,000 Euros

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22
Q

what is the note regarding PEPs

A

EDD should be applied to every single pep whether the individual is domestic or third country citizen.

23
Q

What ist he second part

A

The risk these persons pose was extended to 12 months and measures they are subject to must also be applied to their family members and their known close associates

24
Q

How many other FATF style regional bodies are there that have similar form and functions to FATF

A

9

25
Q

What else are there

A

Various Financial Intelligence Units (FIUs) and banks collaborate formally or informally in groups or associations to improve cooperation in the fight against money laundering

26
Q

What is the role of FATF Style Regional Bodies

A

they play an essential role in identifying and addressing AML/CFT technical assistance needs for their individual members

27
Q

What is the deal with Autonomy

A

FATF and FSRBs are free standing organizations that share the common goals of combating money laundering and the financing of terrorism and proliferation and of fostering effective AML/CFT systems

28
Q

What is the deal with reciprocity

A

FATF and FSRBs operate on the basis of (Mutual or joint or common) recognition of their work,

29
Q

what does this imply

A

that FSRBs and FATF put in place similar mechanisms for effective participation and involvement in each other’s activities

30
Q

What is the deal with common interest

A

Since FATF and FSRBs are part of a larger whole and the success or failure of one organization can have an effect on all organizations, protection of the FATF brand is in the common interest of both FATF and FSRBs

31
Q

What are the other 9 FSRBs

A
  1. Asia/Pacific group on money laundering (APG)
  2. Carribean Financial action task force (CFATF
  3. Council of Europe Committee of experts on the evaluation of anti-money laundering and the financing of terrorism (MONEYVAL)
  4. Eurasia Group (EAG)
  5. Eastern and Southern Africa Anti-money laundering group (ESAAMLG)
  6. Intergovernmental action group against money-laundering in west Africa (GIABA)
  7. Middle east and Nrth Africa Financial Action Task Force (MENAFATF)
  8. Task force on money laundering in central Africa (GABAC)
  9. Financial Action Task force of latin America (GAFILAT) (Formerly known as financial action task force on money laundering in South America)
32
Q

What group was formed in 1995 when a number of FIUs began to work together

A

Egmont Group

33
Q

Why is it Egmont group

A

named for the location of the first meeting, the egmont-arenberg palace in Brussels

34
Q

What is the goal of the group

A

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

35
Q

what are the 5 Egmont principles

A
  1. Expanding and systematizing cooperation in the reciprocal exchange of information
  2. increasing the effectiveness of FIUs by offering training and promoting personnel exchanges to improve the expertise and capabilities of personnel employed by FIUs
  3. Fostering better and secure communication among FIUs through the application of technology such as the Egmont secure web
  4. Promoting the operational autonomy of FIUs.
  5. 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
36
Q

What is the Wolfsberg Group

A

an association of 13 global banks that aims to develop financial services industry standards and guidance related to KYC, AML and Counter-Terrorist Financing Policies

37
Q

what does the group do

A

aims to develop financial services industry standards and guidance related to kyc, anti money laundering and CFT policies

38
Q

What did the wolfsberg group publish in October of 2000

A

the wolfsberg anti-money laundering principles for private banking

39
Q

when was it revised

A

May 2002 and June 2012

40
Q

what do these principles recommend

A

controls for private banking that range from the basic (such as customer identification) to enhanced due diligence (such as heightened scrutiny of individuals who “have or have had positions of public trust” such as PEPs.

41
Q

What does the wolfsberg principle state

A

that banks must “endeavor to accept only those clients whose source of wealth and funds can be reasonably established to be legitimate.”

42
Q

What do they highlight the need to identify

A

the beneficial owner of funds “for al accounts” when that person is someone other than the client

43
Q

what do they urge

A

private bankers to perform due diligence on “Money managers and similar intermediaries” to determine that the middlemen have “satisfactory” due diligence process for their clients or a regulatory obligation to conduct such due diligence.

44
Q

what do the principles recommend as to who should approve all new clients and accounts

A

at least one person other than the private banker

45
Q

what guidelines did the wolfsberg group also issue in early 2002

A

the suppression of the financing of terrorism

46
Q

what did this outline

A

the roles of financial institutions in the fight against money laundering and terrorism financing

47
Q

what are the first 4 of 8 recommendations

A
  1. providing official lists of suspected terrorists on a globally coordinated basis by relevant authorities
  2. including adequate information in the lists to help institutions search customer databases efficiently
  3. providing prompt feedback to institutions following circulation of the official lists
  4. providing information on the manner, means, and methods used by terrorists
48
Q

what are the second 4 of 8

A
  1. developing government guidelines for business sectors and activities identified as high-risk for terrorism financing
  2. developing uniform global formats for funds transfers that assist in the detection of terrorism financing
  3. protecting financial institutions with safe harbor immunity to encourage them to share information to and to report to authorities
  4. performing EDD for “business relationships with remittance businesses, exchange houses, casas de cambia, bureau de change and money transfer agents” and other high-risk customers or those in high-risk sectors, and activities “ such as underground banking businesses or alternative remittance systems.”
49
Q

What is the Summary of FATF

A

Members: Group countries and international organizations

Important Document: 40 Recommendations

Topic: Criminalization, role of financial system, international cooperation

Mandatory: No

50
Q

What is the summary of regional FATF bodies

A

Members: Carribean, Asia-Pacific countries

Important Document: Recocmmendations

Topic: Focus on Regional AML issues

Mandatory: No

51
Q

Basel Committee summary

A

Members: Central bank governors of the G-10

Important Document: CDD for banks, consolidated KYC

Topic: KYC

Mandatory: No

52
Q

European Union Summary

A

Members: EU member countries

Important Document: EU directives on AML/CFT

Topic: CDD, Risk -based, gatekeepers

Mandatory: Yes

53
Q

Wolfsberg Summary

A

Members: LArge International banks

Important Document: AML principles on private and correspondent banking, etc.

Topic: Customer acceptance, EDD

Mandatory: No

54
Q

Egmont Group summary

A

Members: National FIUs

Important document: Secure communication using Egmont secure web training

Topic: Cooperation among the national FIUs, Promoting establishment of FIUs

Mandatory: No

CAMS (19 decks)

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