U2: T23 - ANTI-MONEY-LAUNDERING Flashcards
If a staff member of a financial services organisation were to be accused of ‘arranging’ under the Proceeds of Crime Act 2002, it could mean that they:
a) had knowingly become involved in the process of converting criminal property.
b) personally owned the proceeds of criminal activity.
c) had unwittingly failed to report a potentially suspicious transaction.
d) had personally used the proceeds of criminal activity.
Answer is A)
It could mean that they had knowingly become involved in the process of converting criminal property.
Transferring criminally obtained money through different accounts is an offence only if the funds derive from drug dealing or terrorist activity.
True or false?
False.
Transferring, disguising, concealing or converting criminal property is an offence, no matter what form of criminal activity the funds derive from.
The FATF’s role is to establish a broad policy framework at an international level for the prevention of money laundering.
True or false?
True
In order to be required to report a transaction to the money laundering reporting officer, a member of staff first needs to:
a) be certain that the person is involved in money laundering.
b) advise the person that they may be investigated.
c) review the circumstances of the case with other experienced staff members.
d) have reasonable grounds for believing that a person is involved in money laundering.
Answer is D)
A member of staff who has reasonable grounds for believing that a person is involved in money laundering is obliged to report the suspect transactions.
A bank cashier notices that a customer is paying an unusually large sum of money into their account in cash. The cashier advises the customer that they regard the transaction as suspicious and calls a supervisor to discuss the matter further with the customer.
What offence has the cashier potentially committed?
a) Data protection breach.
b) Tipping off.
c) Failure to disclose.
d) Arranging.
Answer is B)
By alerting the customer to the fact that they were suspicious about the unusual transaction, the cashier potentially committed the offence of ‘tipping off’.
When accepting an investment into a savings account at what transaction value will it become necessary to obtain evidence of the customer’s identity?
a) €15,000.
b) €10,000.
c) £10,000.
d) £15,000.
Answer is A)
The threshold is €15,000, meaning that customer due diligence will be carried out in a greater number of situations.
When the value of an ‘occasional’ transaction exceeds €15,000, whether as a single transaction or as a series of linked transactions. Note that for a business trading in goods and services the threshold is €10,000.
The EU Fourth Money Laundering Directive contains a provision requiring member states to maintain a register of the beneficial owners of legal entities.
A beneficial owner is one who controls what percentage of a legal entity?
25%
A new client has invested £12,000 in the forms of stocks and shares in an ISA product offered by Forward Bank. The bank did not carry out any client identification procedures.
This is most likely to have been because:
a) investments into ISAs are exempt from money‐laundering identification requirements.
b) the client is only temporarily resident in the UK.
c) investment amounts of less than £15,000 are exempt from money‐laundering identification requirements.
d) the client was introduced by an intermediary who obtained the necessary evidence.
Answer is D)
Identification procedures must always be carried out for new clients, so the most likely reason why Forward Bank did not carry them out in this case is that the procedures were carried out instead by an intermediary.
If a money laundering reporting officer (MLRO) suspects a case of attempted money laundering, to whom must this be reported?
The National Crime Agency
A firm’s senior management is required to request a report from the money laundering reporting officer at least once a year.
What action should they take on receiving the report?
a) Forward it to the FCA.
b) Include the total number of SARs in the firm’s annual report and accounts.
c) Review and if necessary improve the firm’s processes and training.
d) Retain the report indefinitely.
Answer is C)
The firm should review and if necessary improve the firm’s processes and training in the light of the report.
The Money Laundering Regulations 2017 define a politically exposed person as anybody in a senior position in a national or international governing body.
Question 1 options:
a) True
b) False
b) False
It is defined as individuals who, because of their position, are considered to be more vulnerable to corruption.
Charlotte is suspicious that a bank customer may be trying to launder money through an account. To whom should she report her suspicions?
Question 2 options:
a) The local police.
b) The bank’s Money Laundering Reporting Officer.
c) The National Crime Agency.
d) Her line manager.
b) The bank’s Money Laundering Reporting Officer.
What would not be acceptable evidence of identity under money laundering legislation?
a) Utility bill or statement.
b) Electoral roll statement.
c) Photo driving licence.
d) Mobile phone bill or statement
d) Mobile phone bill or statement
Acceptable forms of identification are:
1) Current passport
2) Recent Utility/Council tax bill
3) National identity card with photograph
4) Entry on electoral roll
5) Driving license with photograph
What would not be acceptable evidence of identity under money laundering legislation?
a) Utility bill or statement.
b) Current Passport
c) National identity card with photograph
d) Depositary receipt
d) Depositary receipt
Acceptable forms of identification are:
1) Current passport
2) Recent Utility/Council tax bill
3) National identity card with photograph
4) Entry on electoral roll
5) Driving license with photograph
Barry has been found guilty of making recklessly false and misleading statements related to money laundering. What is the maximum applicable penalty?
a) An unlimited fine.
b) 2 years in prison, a fine or both.
c) 3 years in prison or a fine.
d) 5 years in prison, an unlimited fine or both.
b) 2 years in prison, a fine or both.
Penalties:
Directly money laundering: Up to 14 years imprisonment or an unlimited fine or both
Partner/Director failing to comply with Money Laundering regulations: up to 2 years in prison, fined or both or subject to appropriate civil penalties
