Tanzin Huq Flashcards
AML/CFT Flashcards
What makes gold the most attractive to money launderers?
Gold can be purchased for dirty cash, meaning it is useful in the placement phase. It can also be exchanged for cash or other items or physically handed to another person with little or no audit trail, making it useful in the integration phase. Although gold is in high demand and can be easily melted down, these are not the most useful features of gold to money launderers.
Who is Settlor?
A Settlor is the person who creates the trust which defines how the assets of the trust are to be distributed to the beneficiaries. The Settlor may be a lawyer, or other legal professional a third party, or even the beneficiary of a trust, however this is not required.
What is the result of an increased awareness of the potential for gatekeepers to assist in money laundering in recent years?
Lawyers who represent money launderers can more easily be prosecuted.
Why does ML hire “Gatekeeper”?
Professionals such as lawyers, notaries, accountants, investment advisors, and trust and company service providers who assist in transactions involving the movement of money to disguising criminal source of funds, and are deemed to have a particular role in identifying, preventing and reporting money laundering.
There are 2 reasons of hiring Gatekeeper- 1. Implementation of AML program has raised to detect criminal proceeds; 2. Continuous effort to combat money laundering has made money launderer to work even harder. “Gatekeeper” is subject matter expert, they know domestic and international rules and regulations.
Some countries impose due diligence requirements on gatekeepers that are similar to those of financial institutions.
Give an example- how “Credit Finance” can be used by money launders?
They can borrow money for high value assets(eg boat), pay off the loan by cash settlement, then sell asset and start all over again.
EU’s 2nd directive on the use of the financial system for the purpose of ML expand the scope of the 1st directive, please explain
2nd directive amended and updated the 1st directive on the prevention of the use of the financial system for the purpose of ML. The aim of the 2nd directive was to refine the existing provisions created by the 1st directive and to plug the gaps in the legislation highlighted by the 40 recommendations, suggested by the FATF.
Also, 2nd directive taking into account underlying offences such as corruption and thus expanding the predicate offences.
In addition, the 2nd directive added the authority to identify, trace, freeze, seize and confiscate any property and proceeds linked to criminal activities
Please explain, FATF has had practice of “naming and shaming”
It determines maintain inadequate anti-money laundering controls or are not cooperating in the global AML/CFT efforts
