Money Laundering

Question 1

Stages of money laundering

Answer 1

Be particularly careful used in cash based business

Placement: Intro of funds in the sys

Layering: money passed through large no of transaction making it difficult to trace the original

Integration: dirty money cleaned as it’s back in the economy

Question 2

Money laundering offences

Answer 2

1) Concealing criminal property
2) Acquiring,using or possesing criminal property
3) Becoming involved in agreement or suspicion or facilitating the acquisition of criminal property

Report to MRLO

Question 3

Tipping-off

Answer 3

Tiping of is a situation where the mlro(money laundering reporting officer )or individual discloses information that could effect the investigation or the the suspect get the chance to conceal the fraud.

Question 4

Process of ML

Placement

Answer 4

Placement: Using cash Business to make it legitmante

• Make lots of cash deposits in varied bank accounts
• Purchase many monetary instruments

Question 5

Process of ML

Layering

Answer 5

Layering: passing money thrugh tracsations to change form

• Bank wire transfers
• Dep and width continually between accounts regularly
• Purchase high value investments
• Numerous sales and purchase of investments
• Fakes sales between own companies

Question 6

Process of ML

Integration

Answer 6

Integration: difficult to get money trail now

-Investing in luxary, real estate, business ventures

Question 7

Smurfing

Answer 7

Large deposits in small ammounts, in diffrent banks to make it less suspicious, Done by many or one person

Question 8

Alt Banking

Answer 8

Some countrires may have deep rooted unconventional banking systems. Operating out of the control of gov so no proper trail is found.

Question 9

Off shore banks

Answer 9

Sending money through various banks to countires such as Cayman Islands, Hong kong, Panama etc

Question 10

Shell Companies

Answer 10

They accept illegal money as consideration for goods and services.

Question 11

MLRO Responsibilities

Answer 11

Officer who is responsible for receiving and evaluating reports of suspected ML

• Consider Internal Reports
• If there is grounds of suspicion
• Prep report for ext authority
• Train employees for anti ML
• Design and Implement anti ML procedures
• Advise the team on how to prevent it and possible risks of it

Question 12

Client Due Diligence (CDD)

Know Your Customer (KYC)

Answer 12

Client Due Diligence (CDD)
WHO, owns, controls, eco activity and funds source of ENTITY

Know Your Customer (KYC)
Ongoing monitoring, scale nature size of amount would make it apparent.
for individuals: id, dob, address
for Corp: Registrar info etc
for Trust: deed, date of establishment, detail of trustees

Question 13

Enhanced record keeping

Answer 13

Full detail of transactions and business relationship for 5 years after end of business operation. All int and ext reports.

Question 14

Communication and training

Answer 14

Training all those involved in audit engagements, all staff and support staff who don’t get involved.

Question 15

Internal Controls, risk assessment, management and monitoring

Answer 15

• Client Screening
• Sys and controls to ensure training is taken and understood by all relevant employees
• Sys that allows periodic testing of policies of firm with legislation