Wk 9

Question 1

What is this space actually all about
* Money laundering
* Fraud
* Why do institutions care about this ?
* What are banking, financial and regulatory obligations ?

Answer 1

Financial crime prevention targets money laundering and fraud, which threaten the integrity of financial systems.
Such crimes can damage institutional reputation and erode customer trust.

Regulatory obligations include:
-Know Your Customer (KYC): Verify client identities.
-Anti-Money Laundering (AML) Policies: Detect and report suspicious activities.
-Transaction Reporting: Report specific transactions to regulatory authorities.
-Compliance Programs: Maintain training and systems to adhere to financial crime prevention laws.

Question 2

What is money laundering?

Answer 2

• the process of changing large amounts of money obtained from crimes, into origination from a
  legitimate source
• the practice of engaging in financial transactions to conceal the identity, source, or destination of
  illegally gained money
• taking any action with property of any form which is either wholly or in part the proceeds of a crime
  that will disguise the fact that that property is the proceeds of a crime or obscure the beneficial
  ownership of said property

Question 3

AML - what is it? Is it a financial, legal or operational issue?

What are the elements of the AML program?

What about negative obligations and what about anti-tipping?

Answer 3

Anti-money laundering (AML) is a term mainly used in the financial and legal industries to
describe legal controls requiring financial institutions and other regulated entities to prevent, detect,
and report money laundering activities

Question 4

Why is FATF a neccessary international/cross-border function?

Question 5

KYC

• What is know-your-client or know-your-customer ?
• What are the basic obligations
• What is a ‘risk based approach’ ?
• In practice, how do situations of conflict arise ? How are these specifically relevant to global private wealth ?

Question 6

What are the 4 key elements of KYC?
.
.
.
.
.
* Why are entities and entity-specific onboarding so relevant ?
* What happens when things go wrong or obligations are not discharged correctly ?

Answer 6

1.Customer acceptance policy
2.Customer identification procedures
3.Monitoring of transactions
4.Risk management

ans here…..

Question 7

KYC - examples or client questioning

Question 8

KYC
* UBO
* Beneficial versus registered holder
* Why does this matter ?
* How does this specifically impact private wealth and family offices ?

Question 9

Sanctions -* What are sanctions ?
* In practice - how is it possible to detect issues like this in payments and flows ?
* What kind of third parties offer these services ?

Answer 9

• Examples - Iran, North Korea
• Quick discussion - Huawei ?

Question 10

Anti-bribery - * How does this tie into financial flows ?
* Why do institutions need to care about this ?
* Is this hard to detect ? How is it possible to detect such payments or flows ?

Answer 10

• Laws with extraterritorial effect:
• US - Foreign Corrupt Practices Act
• Australia - Commonwealth Criminal Code Act 1995 (Cth)
• Regional equivalents

Question 11

CTF - what is it? how does it work in practise? is there a tie-in to geographic restrictions?

Question 12

PEP
* Politically Exposed Person. What is this ?
* What sort of person ends up on a list like this ?
* Can you still do business with PEPs ?

Question 13

PEP
* What are the implications ?
* How do you test for PEP status ? What are the processes and procedures
* Relates to EDD vs CDD

Question 14

CDD -* CDD - customer due diligence
* What does this typically look like ?
* Is there a fixed set of attributes or rules ? How does this work in a rules based approach ?
* How important is type of business - say, freemium online wealth advisory business versus
full banking setup ?

Question 15

EDD - enhanced due diligence
* What does this look like ?
* How does this differ from CDD
* How do these interact in a rules or risk based approach ?

Question 16

SoW - * Why is this important ?
* What kind of due diligence captures evidence to mitigate these risks or discharge
obligations ?
* What are common sources of wealth in global private wealth ?
* In a client segmentation setting, does this have any implications ?

Question 17

SoF - * Isn’t this the same as source of wealth ?
* How are these issues distinct
* Let’s discuss examples of significant disparity between SoW and SoF
* Which is easier to prove - SoW or SoF ? What kind of documentation is collected ?

Question 18

Hollistic approach to money laundering -
What are the key regulatory obligations, and in a broader sense - what is the policy objective here ? What happens when things go wrong ?