Define "smurfing." - ANSWER The use of multiple individuals and/or transactions for making cash deposits, buying monetary transactions or banks drafts in amounts under the reporting threshold.
(NB: Some equate this te
...
Define "smurfing." - ANSWER The use of multiple individuals and/or transactions for making cash deposits, buying monetary transactions or banks drafts in amounts under the reporting threshold.
(NB: Some equate this term with structuring)
What are the sections of the USA PATRIOT Act pertaining to AML due diligence? - ANSWER *Section 312* -- Requirement that institutions create risk-based due diligence programs
*Section 313* -- Prohibits US financial institutions from dealing with shell banks
*Section 319* -- Requires US financial institutions to maintain records with names, contact info of the owners of foreign banks for which they maintain correspondent accounts.
*Before establishing correspondent accounts, banks should be able to answer basic questions about the respondent bank, including owners and the nature of its regulatory oversight*
What are the three indicators of a black market peso exchange (BMPE)? - ANSWER 1.) Payment made in cash by a third party with no connection to the underlying transaction;
2.) Payment made by wire transfers from third parties unconnected to the underlying transaction; and
3.) Payment made with checks, bank drafts, or money orders not drawn on the account of the purchaser.
What are the four basic elements of a financial institution's AML program? - ANSWER 1.) *Policies* -- a system of internal policies, procedures, and controls;
2.) *Oversight* -- a designated compliance officer with day-to-day oversight of the AML program
3.) *Training* -- an ongoing employee training program
4.) *Audit* -- An independent audit function to test the AML program
What are the seven elements of a sound customer due diligence (CDD) program? - ANSWER 1.) Identification of customer & business entities, including source of wealth
2.) Customer transaction & activity profiles (real & projected)
3.) Acceptance of customer in context of products & services
4.) Assessment and grading of risks that the customer/account present
5.) Transaction monitoring based on risks
6.) Investigation of unusual customer activity
7.) Documentation of findings
According to the Wolfsberg Statement on AML Screening, Monitoring, and Searching (2009), what are the most appropriate and effective overall monitoring frameworks? - ANSWER Risk-based monitoring models and frameworks sufficiently flexible to meet the needs and nature of the individual financial institution. These may contain one or more of the following:
- Dedicated automated transaction monitoring system
- System-generated exception reports
- Manual "line of business" incident reports
- Scheduled periodic reviews/sampling
- Event-driven reviews
What is the broad objective of the UNODC model legislation on money laundering and the financing of terrorism? - ANSWER 1.) To strengthen the ability of MS to implement measures against money laundering and the financing of terrorism
2.) To assist them in detecting seizing, and confiscating illicit proceeds as required pursuant to UN instruments and other globally accepted standards
3.) To provide relevant and appropriate technical assistance upon request
What are the permitted uses of information according to the Egmont Group's "Principles for Information Exchange between Financial Intelligence Units for Money Laundering and Terrorism Financing Cases"? - ANSWER 1.) Info exchanged between FIUs may be used only for the specific purpose for which the info was sought or provided
2.) The requesting FIU may not transfer the shared information to a third party, nor make use of the information for an administrative, investigative, prosecutorial, or judicial purpose without the prior consent of the supplying FIU
According to the FATF's paper, "Risk-Based Approach Guidance for Casinos," what are the potential transaction risks for casinos (both land- and internet-based)? - ANSWER 1.) Use of casino accounts
2.) Redemption of chips, tickets, or tokens for currency
3.) Loan sharking
4.) Transfers between customers
5.) Cash
6.) Proceeds of crime
What is a mutual legal assistance treaty (MLAT)? - ANSWER An agreement among countries allowing for
1.) mutual assistance in legal proceedings
2.) access to documents and witnesses
3.) other legal and judicial resources
... in the respective countries and in private and public sectors for use in official investigations and prosecutions
What are the three tasks that the FATF focuses on? - ANSWER 1.) Spreading the AML message worldwide
2.) Monitoring implementation of the FATF Recommendations among FATF members, and
3.) Reviewing money laundering trends and countermeasures.
What are the characteristics of charities and non-profit institutions that make them particularly vulnerable to misuse for terrorist financing? - ANSWER 1.) They enjoy the public trust
2.) They have access to considerable sources of funds
3.) They are cash-intensive
4.) They frequently have a global presence, often in (or adjacent to) areas exposed to terrorist activity
5.) They are often subject to little regulation and/or have few obstacles to their creation
Identify the second specific customer ID issues identified in the Basel Committee's paper, "Customer Due Diligence for Banks" (Oct. 2001). - ANSWER 1.) Trust, nominee, and fiduciary accounts
2.) Corporate vehicles, especially if there are nominee shareholders or shares in bearer form
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