Topic 23 Anti-Money Laundering Flashcards by JOSHUA SAVIDENT

What is Money Laundering?

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

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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

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

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The below are what?

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

Laws relating to Money Laundering

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

Combat serious and organised crime

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

National Economic Centre

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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

Concealing Criminal Property

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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

Arranging

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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

Acquiring, using or possessing

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

Report money laundering suspicion to the authorities

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

True or False

True

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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

What terrorist property is defined as

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

EU’s Money Laundering Directives

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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

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

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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

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

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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?

Property
Criminal Activity
Criminal Property

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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?

Yes

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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

Fourth Money Laundering Directives

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What else does the fourth Money Laundering Directive also do?

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

25%

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

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

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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)

Fifth Money Laundering Directive

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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)

New charges regarding electronic money

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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

Changes to CDD & Beneficial Ownership register

What is the Financial Action Task Force (FATF)?

Intergovernmental organisation established to coordinate the international fight again money laundering

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

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

What circumstance relating to CDD being required is this? When entering into a new business relationship

New Business relationship

What circumstance relating to CDD being required is this? When value of an occasional transaction (1 or several) exceed €15,000

Occasional transaction exceeding €15,000

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

€10,000

What circumstance relating to CDD being required is this? Where the value of annual premiums exceeds €1,000 or €2,500

Life assurance policies

What circumstance relating to CDD being required is this? Where money laundering or terrorist finance is suspected

Suspicion

What circumstance relating to CDD being required is this? Where doubts about proof of identity has previously been obtained

Doubts

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

Change of Circumstances

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

Acceptable form of Identity

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

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

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?

5 years

If an check is completed by credit reference agency it will leave either a? AML ID footprint or a credit search?

AML ID footprint

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

Senior Management Arrangements, Systems & Controls (SYSC)

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

Senior Management Arrangements, Systems & Controls (SYSC)

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

Steps taken to verify customer ID & customer source of funds

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

Publications of the FATF

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

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

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

True

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

At least once each year

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

What a firm must do in relation to AML training

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

What staff of a firm must be aware of

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

- 14 year prison sentence - Fine

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

- 5 year prison sentence - Fine

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

- 2 year prison sentence - Fine - Civil penalties

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

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

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

True

What is "Improper Performance"?

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

What is the punishment for a conviction of bribery?

- 10 year prison sentence - Unlimited fine

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

National Crime Agency

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

£1,000 plus

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

£2,500

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

- Minimum 2 year prison sentence - Fine