Money laundering and FSMA

Question 2

What is money laundering?

Answer 2

The process of making money obtained from criminal activities (e.g., drug trafficking, terrorist funding) appear legitimate.

Question 3

What is the Proceeds of Crime Act 2002?

Answer 3

Legislation outlining offences related to money laundering. Enforcement is managed by the National Crime Agency.

Question 4

What is the Money Laundering Regulation 2017?

Answer 4

Regulations requiring certain businesses to follow procedures to help combat money laundering.

Question 5

What are the three stages of money laundering?

Answer 5

1.Placement:Introducing dirty money into the financial system.

Question 6

What are the three stages of money laundering?

Answer 6

2.Layering:Concealing the source through transactions and book-keeping.

Question 7

What are the three stages of money laundering?

Answer 7

3.Integration:Withdrawing the laundered money from the account.

Question 8

What constitutes an indirect offence under the AML framework?

Answer 8

Failure to fulfil AML obligations, such as not reporting suspicions of money laundering.

Question 9

What is concealing under money laundering offences?

Answer 9

Concealing, disguising, converting, or transferring criminal property from the UK with knowledge or suspicion of its criminal origin. Defence: Authorized disclosure before the concealment occurred.

Question 10

What is arrangement under money laundering offences?

Answer 10

Assisting someone to retain the proceeds of crime, knowing or suspecting it is criminal. Exception: Ordinary litigation. Defence: Authorized disclosure.

Question 11

What is acquisition, use, or possession of criminal property under money laundering offences?

Answer 11

Using, acquiring, or possessing criminal property with knowledge or suspicion of its criminal origin. Defences: Authorized disclosure, adequate consideration.

Question 12

What is the FSMA General Prohibition?

Answer 12

Prohibits carrying out regulated activities unless authorized or exempt. Regulated activities include advising, arranging, dealing as an agent, managing, and safeguarding in relation to specified investments.

Question 13

What are examples of regulated activities under FSMA?

Answer 13

Advising on, arranging, dealing as an agent, managing, or safeguarding specified investments such as insurance contracts, company shares, debentures/bonds, mortgage contracts, pension schemes, and funeral plans.

Question 14

What are specified investments under FSMA?

Answer 14

Insurance contracts, company shares, debentures/bonds, mortgage contracts, pension schemes, and funeral plans.