Week 4 - Intro to Money Laundering (ML)

Question 1

Define ML

Answer 1

The conversion or transfer of property, knowing that such property is derived from criminal activity, for the purpose of concealing or disguising the illicit origin.

Question 2

Explain the 3 general processes involved in money laundering (PLI)

Answer 2

• PLACEMENT - Illigitimate money is introduced into the financial system.
• LAYERING - Using transactions & processes to confuse and or obscure the ownership of the funds
• INTEGRATION - ‘Clean’ money is returned to the criminal

Question 3

What effects does ML have on society?

Answer 3

• Undermines legitimate businesses by underselling
• Increases crime & corruption. Procedes of ML used to fund other crime & crime relies on ML.
• Loss of tax revenue
• Costs to society, glamorising crime and lifestyles
• Danger to financial institutions

Question 4

Describe the EU Legislation from EU Directive re Money Laundering

Answer 4

*CONVERSION or TRANSFER to CONCEALING or DISGUISING the illicit origin of the property
* ACQUISITION, POSSESSION or USE of illicit funds
* ASSISTING or AIDING any person involved in such

Question 5

What is FATF

Answer 5

The Financial Action Task Force