CAMS 6th Study: Chapter 5

What are Designated Non-Financial Businesses and Professions?

+ Casinos, including internet casinos + Real Estate Agents + Dealers in precious metals and precious stones + Lawyers, Notaries, other independent legal professionals and accountants + Trust and company service providers who prepare or carry out certain duties on behalf of their clients

What is a Beneficial Owner?

1. The natural person who ultimately owns or controls an account through which a transaction is being conducted 2. The natural people who have significant ownership of as well as those who exercise ultimate effective control over a legal person or arrangement

At a min., what should a AML program include?

1. Written internal policies, procedures, and controls 2. A designated AML Compliance Officer 3. Ongoing employee training 4. Independent review to test the program

What is Bill Stuffing?

A casino customer goes to various slot machines putting cash in the bill acceptors and collects cash out tickets with nominal gaming activity, then cashes out at the casino cage or asks for a check

What is Smurfing?

A commonly used money laundering method, smurfing involves the use of multiple individuals and/or multiple transactions for making cash deposits, buying monetary instruments or bank drafts in amounts under the reporting threshold Individuals who are hired to conduct the transactions are referred to as smurfs

What is a Letter of Credit?

A credit instrument issued by a bank that guarantees payments on behalf of its customer to a third party when certain conditions are met

What is a International Business Company (IBC)?

A variety of offshore corporate structures dedicated to business use outside the incorporating jurisdiction, and feature rapid formation, secrecy, broad powers, low cost, low to zero taxation, and minimal filing and reporting requirements

What is Casa de Cambio?

Also called a bureau de change or an exhange office. A Casa de Cambio offers a range of servics that are attractive to money launderers + Currency exchange + Consolidation of small denomination bank notes into larger ones + Exchange of financial instruments such as travelers checks, money orders, and personal checks + Telegraphic transfer facilities

What is a Concentration Account?

Also called an omnibus account. Held by a financial institution in its name, a concentration account is used primarily for internal administrative or bank to bank transactions in which funds are transmitted and commingled without personally identifying the originators

What is a Benami Account?

Also known as a nominee account. Held by one person or entity on behalf of another or others. Benami accounts are associated with the hawala underground baking system of the Indian subcontinent

What is a Trust?

Arrangement among the property owner (grantor), a beneficiary, and a manager of the property (the trustee), whereby the trustee manages the property for the benefit of the beneficiary in accordance with terms set by the grantor

What is a Shell Bank?

Bank that exists on paper only, and has no physical presence in the country where it is incorporated or licensed, and which is unaffiliated with a regulated financial services group that is subject to effective consolidated supervision

What is a Cashier's Check?

Common monetary instrument often purchased with cash. Can be used for laundering purposes; cashier's checks provide an instrument drawn on a financial institution.

What are Financial Action Task Force-Style Regional Body?

FSRBs have forms and functions similar to those of FATF. However their efforts are targeted to specific regions. In conjunction with FATF, FSRBs constitute an affiliated global network to combat ML and TF

What is a Collection Account?

Immigrants from foreign countries deposit many small amounts of currency into one account where they reside, and the collected sum is transferred to an account in their home country without documentation of the source of fund; can be used to launder money

What is a Trustee

May be a paid professional or company or unpaid person that holds the assets in a trust fund separate from the trustee's own assets. The trustee invests and disposes of the assets in accordance with the settlor's trust deed, taking into consideration any letters of wishes

What is a Settlor?

People or companies who transfer ownership of their assets to trustees by means of a trust deed. Where the trustees have some discretion as to the investment and distribution of the trust's assets. The deed may be accompanied by a nonlegally binding letter setting out what the settlor wishes done with the assets

What is a Gatekeeper?

Professionals, such as lawyers, notaries, accountants, investment advisors, ad trust and company service providers who assist in transactions involving the movement of money and are deemed to have a particular role in identifying, preventing, and reporting money laundering

What is a Grantor?

The party who transfers title or ownership of property or assets. In a trust, typically the person who creates or funds the trust

What is Nesting?

The practice where a respondent bank provides downstream correspondent services to other financial institutions and processes these transactions through its own correspondent account The correspondent bank is thus processing transactions for financial institutions on which it has not conducted due diligence. Although this is a normal part of correspondent, it requires the correspondent bank to conduct EDD on its respondent's AML program to adequately mitigate the risk of processing the customer's customer's transactions

What is a payable through account?

Transaction account opened at a depository institution by a foreign financial institution through which the foreign institution's customers engage, either directly or through sub-accounts, in banking activities and transactions in such a manner that the financial institution's customers have direct control over the funds in the account. These accounts pose risks to the depository institutions that hold them because it can be difficult to conduct due diligence on foreign institution customers who are ultimately using the PTA accounts.