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CeMAP Unit 2 > Topic 23 Anti-Money Laundering > Flashcards

Topic 23 Anti-Money Laundering Flashcards

1
Q

What is Money Laundering?

A

Filtering of proceeds of crime through legitimate mean to make their origins different to trace

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2
Q

All the below are examples of what?

  • Opening an account with a small initial deposit & adding large sums in cash
  • Making an investment into a collective investment which is encashed in a short period of time
  • Arranging a mortgage which is quickly paid off
A

Examples of how criminals use the financial services industry to launder money

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3
Q

The below are what?

  • Proceeds of Crime Act 2000
  • Terrorism Act 2000
  • EU’s Money Laundering Directives
A

Laws relating to Money Laundering

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4
Q

What is the role of the National Crime Agency (NCA)?

A

Combat serious and organised crime

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5
Q

Which department of the National Crime Agency (NCA) is responsible for tackling money laundering, fraud, Bribery & corruption and counterfeiting of currency?

A

National Economic Centre

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6
Q

Which principle money laundering offence is this?

  • Criminal property is a property that a person knows or suspects is the proceeds of a crime
  • It’s a criminal offence to conceal, disguise, convert or transfer criminal property
A

Concealing Criminal Property

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7
Q

Which principle money laundering offence is this?

Arranging occurs when a person becomes involved in a process they know will enable someone else to accuse, retain or use criminal property

A

Arranging

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8
Q

Which principle money laundering offence is this?

It is a criminal offence for a person to acquire, use or possess any property when that person knows or suspects is the proceeds of a criminal activity

A

Acquiring, using or possessing

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9
Q

The Proceeds of Crime Act 2002 has a requirement for what if they suspect money laundering?

A

Report money laundering suspicion to the authorities

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10
Q

It is an offence to tip off a person who is suspended of criminal activity.

True or False

A

True

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11
Q

What are these in relation to terrorist finance?

  • Money or property likely to be used for terrorism purposes
  • Proceeds of the commission of acts of terrorism
  • Proceeds of acts carried out for the purposes of terrorism
A

What terrorist property is defined as

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12
Q

The Money Laundering regulations implement what in relation to the EU?

A

EU’s Money Laundering Directives

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13
Q

What are the below in relation to the Third Money Laundering Directive?

  • Conversion or transfer of property knowing this is derived from criminal activity
  • Concealment or discuse of true nature source, location, disposition, movement, rights with respect to the ownership of property. Knowing this property devired from criminal activity
A

What the EU defines as Money Laundering that has been committed intentionally

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14
Q

What are the below in relation to the Third Money Laundering Directive?

  • Acquisitions, possession or use of property knowing at the time or receipt the property derived from criminal activity
A

What the EU defines as Money Laundering that has been committed intentionally

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15
Q

Participating in association to commit, attempts to commit & aiding, abbeting, facilitating & counselling the commission of any actions mentioned in the following also are part of the Third Money Laundering Directives?

A
  • Property
  • Criminal Activity
  • Criminal Property
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16
Q

If the activities that generated a property took place outside an EU country but the money laundering took place in the EU will the proceeds be treated under EU rules?

A

Yes

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17
Q

Which money laundering directives are the below elements of?

  • Implementation of AML provisions such as CDD. Relevent person must produce AML risk report & translate it’s findings into policies approved by senior management
  • Wider definition of PEPs
  • New of a new criminal offence that making a misleading statement in regards money laundering is punishable by a fine or a prison sentence of 2 years
A

Fourth Money Laundering Directives

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18
Q

What else does the fourth Money Laundering Directive also do?

A
  • Tax crimes
  • Strengthens the co-operation between member states
  • Increases transparency around the beneficial ownership of legal entities each member state must maintain a central register of beneficial owners
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19
Q

To be a beneficial owner of legal entity what percentage of ownership do they need?

A

25%

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20
Q

What does the Money Laundering and transfer of funds (information) (Amendment) (EU exit) 2018 do?

A

Allows UK’s AML regime & counter-terrorism financing to work with the EU post Brexit

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21
Q

The below are covered by which money laundering directive?

  • Virtual Money Providers
  • Art Traders (transactions of 10,000 EUR or more)
  • Estate Agents (for properties let at 10,000 EUR)
A

Fifth Money Laundering Directive

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22
Q

What are the below in relation to the Fifth Money Laundering Directive

  • Maximum monthly payments transaction limit of €150 for non-reloadable payment instructions (threshold reduced from €250 to €150)
  • Remote payment transactions that exceed €50 are subject to CDD (threshold reduced from €100 to €50)
A

New charges regarding electronic money

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23
Q

What are the below in relation to the Fifth Money Laundering Directive

  • ID & VA must be based on documents & data from a reliable & independent source
  • Any member of the public must have access to beneficial ownership information
  • Implementing requirements to harmonise the Enhanced Due Diligence (EDD) across member states
A

Changes to CDD & Beneficial Ownership register

24
Q

What is the Financial Action Task Force (FATF)?

A

Intergovernmental organisation established to coordinate the international fight again money laundering

25
Q

What work does the Financial Action Task Force (FATF) do?

A
  1. Identifying trends in money laundering methods
  2. Setting standards for national anti- money laundering programmes
  3. Evaluating the extent to which countries have implemented the standards
  4. Identifying high risk jurisdictions (deemed to have inadequate AML measures
26
Q

What circumstance relating to CDD being required is this?

When entering into a new business relationship

A

New Business relationship

27
Q

What circumstance relating to CDD being required is this?

When value of an occasional transaction (1 or several) exceed €15,000

A

Occasional transaction exceeding €15,000

28
Q

For a business transaction what is the maximum threshold for occasional transactions?

29
Q

What circumstance relating to CDD being required is this?

Where the value of annual premiums exceeds €1,000 or €2,500

A

Life assurance policies

30
Q

What circumstance relating to CDD being required is this?

Where money laundering or terrorist finance is suspected

31
Q

What circumstance relating to CDD being required is this?

Where doubts about proof of identity has previously been obtained

32
Q

What circumstance relating to CDD being required is this?

Where a change in the circumstances of an existing customer requires new evidence to be obtain

A

Change of Circumstances

33
Q

These are all what in relation to CDD?

  • Current Passport
  • National Identity Card with photograph
  • Driving Licence with photo
  • Entry on electoral roll
  • Recent utility bill or council tax bill
A

Acceptable form of Identity

34
Q

If a person is unable to provide ID how might such a person use financial services?

A

A letter or statement from a person of responsibility who knows the person

35
Q

For the purposes of record keeping how long must either relationship or transactions be keep of a client after the client has left or a transaction?

36
Q

If an check is completed by credit reference agency it will leave either a?

AML ID footprint or a credit search?

A

AML ID footprint

37
Q

To ensure the integrity of the financial markets the FCA ensures what have what in place to combat financial crime.

What are the below?

  • Establish accountability procedures & systems to minimise the risk of money laundering
  • Give responsibility for anti-money laundering system & controls to a senior manager
  • Appointment a Money Laundering Reporting Officer (MLRO)
  • Have documented risk policy to money laundering
A

Senior Management Arrangements, Systems & Controls (SYSC)

38
Q

To ensure the integrity of the financial markets the FCA ensures what have what in place to combat financial crime.

What are the below?

  • Regular training to staff about what is expected of them about money laundering rules & consequences for not complying
  • Educate staff about potential problems
  • Take reasonable steps to ensure that proceedures are up to date
  • Requestion a report at least once in a calendar year from MLRO
  • Take steps to appropriate action to strengthen proceedures & deficiencies identifed in the report
A

Senior Management Arrangements, Systems & Controls (SYSC)

39
Q

The Joint Money Laundering Steering Groups’s Guidance Notes detail what?

A

Steps taken to verify customer ID & customer source of funds

40
Q

Where would a firm find out about known developments in money laundering & deficiencies in AML rules of other jurisdictions?

A

Publications of the FATF

41
Q

What is the role of the Joint Money Laundering Steering Group?

A

Promote good practise & give practice assistance in interpreting the UK money laundering regulations

42
Q

Staff in an organisation have to report money laundering suspicion to the Money Laundering Reporting Officer (MLRO)?

True or False

43
Q

How often must senior management request a report from the MLRO? That contain the following.

  • Assess the firms compliance with the Joint Money Laundering Steering Groups guidance notes
  • Indicate how Financial Action Task Force’s finding have been used during the year
  • Provide information about reports of suspected money laundering incidents of submitted during the year
A

At least once each year

44
Q

What are the below in relation to AML?

  • Take measures to ensure staff are aware of money laundering procedures and legislation
  • Provide training in recognition & handling of money laundering transactions
A

What a firm must do in relation to AML training

45
Q

What are the below in relation to AML?

  • Law relating to Money Laundering
  • Firms procedures & starts individual responsibilities
  • Identity of the firms MLRO & what there responsibilities are
  • How any breech of money laundering rules can impact the firms & themselves
A

What staff of a firm must be aware of

46
Q

Under the proceeds of crime act 2002 anyone convicted of concealing, arranging or acquiring could receive what punishment?

A
  • 14 year prison sentence
  • Fine
47
Q

Under the proceeds of crime act 2002 anyone convicted of failing to disclose or tipping off could receive a punishment of?

A
  • 5 year prison sentence
  • Fine
48
Q

What punishment could a director or partner receive if they fail to comply with money laundering regulations?

A
  • 2 year prison sentence
  • Fine
  • Civil penalties
49
Q

What is deemed as an offence under the Bribery Act 2010?

A

If the person offering the bribe know of believes acceptance of the advantage constitutes improper performance

50
Q

An activity relating to bribery carried out either abroad or in the UK and does not need to have a connection with the UK.

True or False

51
Q

What is “Improper Performance”?

A

Where the person receiving the bribe performs their functions improperly as a result of receiving or accepting a bribe

52
Q

What is the punishment for a conviction of bribery?

A
  • 10 year prison sentence
  • Unlimited fine
53
Q

Who does the MLRO have to report to if they suspect money laundering from one of their clients?

A

National Crime Agency

54
Q

CDD is required on annual life assurance premiums of how much?

A

£1,000 plus

55
Q

CDD is required on single life assurance premiums of how much?

56
Q

According to the Fourth Money Laundering Directive if a person makes reckless or misleading statement about money laundering what is the punishment?

A
  • Minimum 2 year prison sentence
  • Fine

CeMAP Unit 2 (11 decks)

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