Money Laundering Flashcards
is an act or series
or combination of acts whereby
proceeds of an unlawful activity,
whether in cash, property or other
assets, are converted, concealed or
disguised to make them appear to
have originated from legitimate
sources.
Money laundering
has been described by many as
the lifeblood of crime and
is a major threat to the economic and social well-being of societies.
Money laundering
is a serious threat
Money laundering
WHY MONEY LAUNDERING
A SERIOUS PROBLEM?
it provides funds for
terrorists, drug traffickers, arms
dealers, and criminal groups.
refers to the laws, regulations
and procedures intended to
prevent criminals from
disguising illegally obtained
funds as legitimate income.
Anti-money laundering (AML)
Can Money Laundering be Stopped?
cannot be completely stopped but it
can be reduced through constant vigilance.
3 Stages of Money Laundering
- Placement
- Layering
- Integration
involves initial placement or introduction of the illegal money.
Placement
involves a series of financial
transactions during which the dirty money is passed through a series of procedures, putting layer upon layer of persons and financial activities into the laundering process.
Layering
the money is once again made available to the criminal with the occupational and geographic origin obscured or concealed.
Integration
Goal: deposit criminal proceeds into financial system
Placement
Goal: conceal the criminal origin of proceeds
Layering
Goal: Create an Apparent Legal origin for criminal proceeds
Integration
is the Philippines’ financial intelligence unit, which is tasked to implement the AMLA
Anti-Money Laundering Council (AMLC)
(AMLC) is composed of:
1) Governor of the Bangko Sentral ng Pilipinas (BSP) as Chairman.
2) Commissioner of the Insurance Commission (IC) as member.
3) Chairman of the Securities and Exchange Commission (SEC) as member.
KYC RULE
Know
Your
Client
What are the covered institutions in AMLC?
Banks
pawnshops
Insurance companies, pre-need companies
SecuritiesPhilippine Gaming Corporations
are a critical function to assess
customer risk and a legal requirement to comply with Anti-Money Laundering (AML) laws.
KYC Proceedures
KYC Proceedures
1) Customer Identification
2) Customer Due Diligence
3) On Data Privacy
Vice Mayor to Kagawad, Medium Businesses
Normal Risk
No possibility you will get involved in illegal activities (Students, Sari-sari stores)
Low Risk
PEPS (Vice Mayor, Mayor, Big Companies)
High Risk
Relatives of high-risk politicians
First Degree
Customer Identification:
✔ Name
✔ Date of birth
✔ Address
✔ Identification number
Transaction in cash or other equivalent monetary instruments involving a total amount in excess of P500,000.00 within one business day.
Covered transactions
✔ there is no underlying legal or trade obligation, purpose or economic justification
Suspiscious transactions
Such data will only be used for the purposes specified at the time the information is collected or as permitted by law, unless otherwise agreed with the client.
On Data Privacy
The privacy of individual client data will be respected in accordance with the laws and regulations of individual jurisdictions.
On Data Privacy
✔ the client is not properly identified
suspicious transactions
✔ the amount involved is not commensurate with the business or financial capacity of the client;
suspicious transactions
other offenses punishable under the AMLA, as amended:
Failure to keep records
Malicious reporting
Breach of Confidentiality
Administrative offenses
is committed by any responsible official or employee of a covered institution who fails to maintain and safely store all records of transactions for 5 years from the dates the transactions were made or when the accounts were closed.
Failure to keep records
is committed by any person who, with malice or in bad faith,
reports or files a completely unwarranted or false information regarding a money laundering transaction against any person.
Malicious reporting
The penalty is 6 months to 4 years imprisonment and a fine of not less than P100,000.00 but not more than P500,000.00.
Malicious reporting
In case the prohibited information is reported by media, the responsible reporter, writer, president, publisher, manager, and editor-in-chief are held criminally liable.
Breach of Confidentiality
when you break a rule in your contact.
Breach of Contract
The AMLC, after due investigation, can impose fines from P100,000.00 to P500,000.00 on officers and employees of covered institutions or any person who violates the provisions of the AMLA.
Administrative offenses
They show the results of operation,
financial condition, changes in owner’s equity, and sources and uses of cash.
FINANCIAL STATEMENTS
are the product of financial Accounting.
FINANCIAL STATEMENTS
discusses the business enterprise’s products, services, facilities, and future directions in both numbers and narrative form.
Review of Operations
provides comparative financial statement information and covers important points such as profitability, sales, dividends, market price of share capital, and asset acquisitions.
Highlights
4 types of audit opinions:
Unqualified Opinion
Qualified Opinion
Disclaimer of Opinion
Adverse Opinion
When a severe scope limitation exists, the auditor may decide to offer a disclaimer of opinion. A disclaimer indicates that the auditor was unable to form an opinion on the fairness of the financial statements.
Disclaimer of Opinion
if the company has placed a “scope limitation” on CPA’s work.
Qualified Opinion
the CPA is satisfied that the business enterprise’s financial statements present fairly its financial position and results of operations
Unqualified Opinion
