Topic 23 (Money laundering) Flashcards
What is money laundering?
It involves filtering the proceeds of any kind of criminal activity through a series of accounts or other financial products in order to make such funds appear legitimate or to make their origins difficult to trace
Who has a legal duty to step in to reduce the risk of money laundering in the UK?
The Financial services firms
What are the 3 Principal money laundering offences?
- Concealing criminal property
- Arranging
- Acquiring, using or possessing
What is concealing criminal property?
- A property a person knows or suspects to be the proceeds of criminal activity
- It is a criminal offence to conceal, disguise, convert or transfer criminal property
What is Arranging?
Occurs when a person becomes involved in a process that they know or suspect will enable someone else to acquire, retain, use or control criminal property
What is Acquiring, using or possessing?
Is a criminal offence for a person to acquire, use or possess any property when that person knows or suspects that the property is the proceeds of primal activity
What is Failure to disclose?
Introduced in 2002 and is the requirement for a person to disclose information about money laundering if they have reasonable grounds for knowing or suspecting that someone is engaged in money laundering
What is Tipping off?
An offence to disclose a person who is suspected of money laundering that ab investigation is being, or may be carried out
How is terrorism described in the terrorism act 2000?
The use of threat or violence against a person or serious damage to property or electronic systems, with the purpose of influencing the government, intimidating the public or advancing a political, religious or ideological cause
What is ‘Terrorist property’?
Money or other property that is likely to be used for terrorism purposes
What is MONEY LAUNDERING?
The process of filtering the proceeds of criminal activity through a series of accounts or other financial products, in order ti give it apparent legitimacy, or to make it’s origins difficult to trace
what is the Financial action task force? (FATF)
an inter-government organisation to co-ordinate the international fight against money laundering
What is consumer due diligence (CDD)?
The process of confirming the identity of customers
What is preventing financial exclusion?
To avoid a person being denied access to financial services, the FCA considers that a firm may accept a letter or statement from a person of responsibility
What are the record keeping requirements?
- evidence of ID must be kept for at least 5 years after the relationship with a customer has ended
- supporting evidence of transactions must be kept until at least 5 years after the date of transaction
What is the role of Credit reference agencies?
They carry out regular checks for anti-money laundering
The FCA makes sure individuals…
- report suspicious circumstances by completing ‘suspicious activity reports’
- refrain from altering persons being investigated
What is the role of the Money laundering reporting officer?
Is a person with appropriate authority who will co-ordinate the firms anti-money laundering activities once in a year
What training is provided?
Firms must
- make employees aware of money laundering procedures and legislation
- provide training in the recognition and handling of money laundering transactions
What must staff be aware of?
- Money laundering law
- Firms procedures and individual responsibilities
- Identity of the firms MLRO and what the responsibilities are
- How any breach of rules can affect the firm and themselves
What are the penalties of money laundering?
- Anyone convicted can face up to 14 years in prison or an unlimited fine
- The offence of tipping of is 5 years or an unlimited fine
- a partner who fails to comply with regulations can be fined, get 2 years in prison or both
What is the main offence that the bribery act 2010 put in place?
Under this legislation it’s an offence to offer, give or promise financial or other advantage to someone else
- max penalty is an unlimited fine and a prison term of up to 10 years
