ML
What is a red flag?
A warning or signal that should bring the attn of a financial org to a potentially suspicious transaction or activity
What is commission rogatorie?
AKA letters rogatory or letter of request, is a written request for evidence sent by the central authority of the requesting country.
Mutual Legal Assistance Treaty (MLAT)
Agreement among countries allowing for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial resources in the respective countries, in private and public sectors, for use in official investigations and prosecutions.
Where does the ultimate responsibility for a financial org aml/cft program lie?
BOD, members must set the tone from the top by openly voicing their commitment
What types of documents do financial orgs typically have that could assist a financial investigator in tracking $ movements
Banks maintain sig cards, which are collected at acct opening; acct statements; deposit tickets; ip addresses; login activity
what types of customers do supervisory authorities identify as inherently high risk for ML?
Banks; casinos; offshore corps etc
When should a financial org conduct sanctions screening
Before a financial org starts doing business w/ a new customer or engaging in certain transactions, it should review the various country sanctions program requirements and published lists of known or suspected terrorists, narcotics traffickers, and other criminals for potential matches
What makes bearer bonds, bearer stock certs, and bearer shares prime vehicles for ML
Belong, on the surface, to the "bearer". Provide opportunities to disguise their legitimate ownership
ex 1st stage
Blending of funds, purchasing significant stored value cards w/ currency, fx, currency smuggling and loans
FATF
Composed of 35 Member jurisdictions
What is one of the most important aspects of due diligence for a bank when establishing a relationship w/ a Money Services Business *MSB)
Confirm the MSB has implemented a AML/CFT program and is properly licensed to operate
Red flags of ML associated w/ casinos and gambling
Converting the funds to be laundered from cash to checks and using casino credit to layer transactions before transferring out the funds; buying chips w/ illicit funds and requesting repayment via check drawn on the casinos account; using illegal funds to repay casino lines of credit
Describe FATF 15 concerning new products, delivery mechanisms, and technologies
Countries and financial orgs should assess the risks associated w/ the development of new products, business practices, delivery mechanisms and tech. They should assess these risks prior to launching new products and take appropriate measures to mitigate the identified risks
What is a tax haven?
Countries that offer special tax incentives or tax avoidance to foreign investors and depositors
3 Criteria in AML/CFT
Customer Type; Geographic Location; Products and Services used
According to the Basel Committee's KYC guidance, what are the four key elements of a KYC program
Customer identification; Risk mgmt; Customer acceptance policy; ongoing monitoring
What are the 7 elements of a sound CDD program
Customer identification; profiles; customer acceptance; risk rating; monitoring; investigation; and documentation
What must EU member countries do w/ the EU directives
EU members must transpose the directives into law
characteristics of charities and non profits make them vulnerable to terrorist financing
Enjoy the public trust; have access to lots $; being cash intensive; have global presence; often near areas exposed to terrorist activity; subject to little regs
FATF focus areas
FATF fulfills its obligations by spreading the AML message worldwide through technical compliance and effectiveness assessment
What is the purpose of a memorandum of understanding in the context of FIUs conducting the investigations
FIUs are tasked w/ receiving and analyzing SARs and maintaining close links w/ police and custom authorities. They share info among themselves informally.
what is a search warrant, and how is it issued
Grant of permission from a court for a LE agency to search certain designated premises and seize specific categories of items or documents.
4 Pillars
Internal Controls; Compliance Functions; Training; Independent Audit
Concentration account
Internal accounts established to facilitate the processing and settlement of multiple or individual customer transactions w/in the bank, usually on the same day. They are frequently used to facilitate transactions for private banking, trust and custody accounts, funds transfers, and intl affiliates.
Recommendations 36-40 from FATFs 40 recs pertain specifically to intl cooperation in AML/CFT investigations. What do these recs address?
Intl instruments, mutual legal assistance mutual legal assistance regarding freezing and confiscation, extradition, and other forms of intl cooperation
what is smurfing?
Involving 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
What are some aspects associated w/ the securities industry that increases its exposure to ML
Its intl nature; speed of transactions; ability to conduct free of payment transfers; ease of converting holdings to cash w/out significant loss of principal; routine use of wire transfers; competitive commission based environment; weak aml programs
What is ML
ML involves taking criminal proceeds and disguising their illegal sources in order to use the funds to perform legal or illegal activities. ML is the process of making dirty $ look clean
What are some ways MSBs can be used for ML
MLs can use money remitters and currency exchanges to make funds available to criminal orgs at a destination country in the local currency. The launderer or criminal $ to foreign businesspeople wishing to make legit purchases of goods for export. thecash intensive and transactional nature of MSBs can facilitate ML
What is the revised threshold for reporting suspicious transactions under the 4th EU ML directive
Natural and legal persons trading in goods are covered to teh extent that they make or receive cash payments of 10k eur or more (decreased from 15k)
Following an investigation, a financial org decides to file a SAR. What should they do as soon as possible?
Notify the investigators or prosecutors
What are some of the ML risk pertaining to the use of payable through accounts?
PTAs w/ foreign inst. licensed in offshore centers w/ weak bank supervision and licensing laws; PTAs arrangements in which the correspondent bank fails to apply CDD to the respondent's customers; PTA arrangements in which subaccount holders have currency deposit and w/drawal privileges; and PTAs used in conjunctino w/ a subsidiary representative or other office of the respondent bank
3 stages of ML
Placement (physical disposal of cash or other assets); Layering (separation of illicit proceeds from their source by layers of financial transactions intended to conceal origins of the proceeds); Integrations (reentry of funds into the economy in what appears to be normal business or personal transactions)
Section 313
Prohibition on correspondent accounts for foreign shell banks
ex 3rd stage
Purchasing luxury goods
What are remittance services?
Remittance services are also referred to as giro houses or casas de cambio. Remittance services are businesses that receive cash or other funds that they transfer through the banking system to another account. The account is held by an associated company in a foreign jurisdiction where the money is made available to the ultimate recipient.
Describe the types of services that trust and company service providers TCSPs offer to 3rd parties
TCPSs can act as a formation agent of legal persons; act as a director or secretary of a company
Willful Blindness
The deliberate avoidance of knowledge of the facts. The equivalent of actual knowledge of the illegal source of funds or the intentions of a customer in ML transactions
According to FATF 40 recs, the complete set of countermeasures against ML and TF cover what six elements?
The identifications of risks; development of appropriate policies; criminal justice system and law enforcement; financial system of regulation; transparency of legal persons and arrangements; and intl cooperation
What is the name of OFACs sanction list
The speciality designated nationals and blocked persons (SDN) list
Microstructuring
This is the same as structuring expect that it is done at a much smaller level. Instead of two deposits of $9000 each there would be 20 deposits of approximately $900.
What are some sources for identifying high risk countries
US state depts annual "international narcotics control strategy report; transparency intl yearly "corruption perception index"
According to FATF Recommendation 10, when should financial orgs undertake customer DD measures?
When establishing business relationships; carrying out occasional transactions under certain circumstances; when there is a suspicion of ML or terrorist financing; and when the financial org has doubts about the veracity or adequacy of previously obtained customer id data
What is mutual legal assistance treaty (MLAT)
When evidence is required from another jurisdiction, a request can be made for MLAT. MLATs provide a legal basis for transmitting evidence that can be used for prosecution and judicial proceedings. MLATSs only involve 2 countries at a time
What is the ML risk of using concentration accounts?
When the customer-identifying info is separated from teh financial transaction. When separation occurs, the audit trail is lost, and accounts can be misused or administered improperly.
What are the basic questions to ask when developing an AML/CFT compliance training program
Who to train? What training topics? How to train? Where to train?
According to FATF rec 10, when should the ID of a customer be established and verified?
a bank should not establish a banking relationship or carry out any transactions until the identity of the customer has been satisfactorily established and verified in accordance w/ FATF rec 10
What is safe harbor for reporting suspicious activity?
a legal protection for financial orgs, their directors, officers, and employees from criminal and civil liability for breach of any restriction on disclosing info imposed by contract or by any legislative, regulatory, or admin prohibition, if they report their suspicions in good faith to the FIU
Memo of Understanding (MOU)
agreement between two parties establishing a set of principles that govern their relationship on a particular matter.
According to the Egmont Group, what best practices should be observed by an FIU requesting info from another FIU?
all FIUs should submit requests for info in compliance w/ the principles of info exchange. requests for info should be submitted as soon as the precise assistance required is identified.
why is the issue of requiring attorneys to be gatekeepers in the AML/CFT area controversial?
attorneys have confidential relationships w/ their clients
According to section 312 of the patriot act, the due diligence program for correspondent banks and must address what 3 measures
determining whether enhanced due diligence is necessary; assessing the ML risk presented by the correspondent account; and applying risk based procedures and controls reasonably designed to detect and report suspected ML
EX of 2nd stage of ML
electronically moving funds from 1 country to another; converting the cash placed into the system into monetary instruments
What is an international business company (IBC)
entities formed outside of a persons or businesses country of residence, typically in offshore jurisdictions, for confidentially or asset protection purposes. Reduce transparency
What are the components of an effective AML/CFT training progam?
explains the relevant AML/CFT laws and regs and covers the orgs policies and procedures used to mitigate ML risks. Training should emphasize the importance of AML/CFT efforts and educate employees about what to do if they encounter potential ML
How can the free-look period be used to launder money?
feature that allows investors to back out of a policy w/out penalty. This process allows the ML to get an insurance check which represents cleaned funds
according to the Basel Committee, how are sounds KYC policies and procedures critical to protecting the safety and soundness of banks
help mitigate the corrupt customers. W/out DD banks can be subject to reputational, operational, legal, and concentration risks.
how do drug trafficking orgs take advantage of BMPE
involving the export of goods across the US/Mexico border to help move funds from the US back to the country where the DTO is based
How does the scope of the EU 3rd ML directive differ from the 2nd ML directive
it specifically includes the category of trust and company service providers; it covers all dealers trading in goods who trade in cash over 15k eur; and it expands the def of financial institution to include certain insurance intermediaries
What are FIUs
mandatory national agencies that handle financial intelligence. They receive reports of suspicious transactions from lots of stuff and then disseminate the resulting intelligence to combat ML
What is a trusttee
may be a paid professional or company or unpaid person who holds the assets in a trust fund separate from the trustees own assets. the trusttee invests and disposes of the assets in accordance w/ the settlors trust deed, taking into consideration any letter of wishes
why is it important for an orgs aml officer to have good communication skills
must be able to communicate at all levels of the org, must be able to articulate matters of importance. Must be able to analyze and interpret changes, determine what effect they could have on the org and suggest an action plan when appropriate
Does basel committee prohibit numbered accounts
no, numbered accounts should not be prohibited but they should be subjected to exactly the same kyc procedures as other customer accounts. such accounts should in no circumstances be used to hide the customer identity from a banks compliance function or from the supervisors
what makes hawalas attractive to terrorist financiaers
not subject to formal govt oversight and are not required to keep detailed records
when should a financial org conduct training
ongoing and on a regular schedule; existing employees should at least attend an annual training session. New employees should receive appropriate training w/ respect to their job function and w/in reasonable period after joining or transferring a new job. Situations may arise that demand an immediate session or enhanced training.
What banking functions and products are considered high risk
private banking; offshore activity; wire transfer;travelers checks etc
Describe KYC
refers to anti ML polices and procedures used to determine the true ID of a customer and the type of activity that is normal and expected and to detect activity that is unusual for a particular customer.
What is meant by the physical cross border transportation of currency
refers to any inbound or outbound transportation of currency or bearer negotiable instruments from one country to another. The term includes the physical transportation
In an internal investigation who exactly does the attorney for the org represent?
represent the entity and not its employees
describe an aml/cft compliance officers accountability
responsible for executing the aml/cft program.
What is the purpose of the International Money Laundering Information Network (IMoLIN)
serves as a clearinghouse of ML info for the benefit of the national and international AML agencies.
Why are tests important to AML training
tests evaluate how well the training is understood, w/ a mandatory passing score
What is willful blindness
the act of deliberately choosing to ignore certain facts or information. Courts have upheld that willful blindness is the equivalent of actual knowledge of the illegal source of funds or the intentions of the customer in a ML transaction
What is meant by a country's extraterritorial reach
the extension of one country's policies and laws to the citizens and orgs of another. US AML laws contain several provisions that extend its prohibitions and sanctions to other countries
What is tipping off
the improper or illegal act of notifying a suspect that he is the subject of a SAR or is otherwise being investigated or pursued by the authorities
what permanent international org was the 1st to reach an agreement on model legislation aimed specifically at dealing w/ ML
the org of american states, via the inter american drug abuse control commission
What is the limitation of using publicly available sources of ino to identify PEPs and their associations
these lists do not provide all relevant into related to PEPs
How is correspondent banking vulnerable to financial crime?
they dont know the customer of the respondent bank directly; less info is avail to help the correspondent bank recognize unusual activity; CB does not know the degree of supervision to which the respondent bank is subject
Features of high risk insurance products
typically offer the ability to hold funds and assets into the policy; full or partial underlying investments under the control of the customer; the option of asset transfers; and high upper limit for the amount of funds held.
According to FATF rec 10, when should a financial org conduct EDD on a cust?
when there are circumstances in which the risk of ML or terrorist financing is higher, EDD measures should be taken. These include customer risk factors; country or geographic risk factors; and product, services, transaction, and delivery channel risk factors
Describe the elements that should be addressed in a global approach to KYC as identified in the basel committees october 2004 paper , "consolidated KYC Risk mgmt"
Risk mgmt; customer acceptance and identification policies; and ongoing monitoring of higher risk accounts
what org provides a forum for financial intelligence units around the world to improve cooperation and foster trust among countries to securely share sensitive info in the fight against ML
The Egmont Group of FIUs
As a financial org develops transaction history w/ its customers, what factors should lead it to consider modifying the risk of a customer?
unusual activity, such as alerts, cases, and SAR filings; receipt of LE inquiries; transactions that violate economic sanctions programs; significant volumes of activity where it would not be expected
What are the basic elements, four pillars, of an effective AML program
A system of internal policies, procedures and controls (1st line of defense); a designated compliance function w/ a compliance officer (2nd line of defense); an ongoing employee training program; and an independent audit function to test the overall effectiveness of the AML program (3rd line of defense)
Identify the seven topics of intnl standards incorporated into the FATF 40 recs
AML/CFT policies and coordination (recs 1-2); money laundering and confiscation (recs 3-4); terrorist financing and financing proliferation (recs 5-8); financial and nonfinancial institution preventative measures (recs 9-23); transparency and bene ownership of legal persons and arrangements (recs 24-25); powers and responsibilities of competent authorities and other instl measures (recs 26-35); intl cooperation (recs 36-40)
In addition to policies and procedures, what are ex of internal controls w/ aml/cft programs
AML/CFT programs rely ona variety of internal controls, including mgmt reports, automated review systems, and utilization. of multiple reviewers; the internal technology or tools the financial org uses to ensure the AML/CFT program is functioning as intended and w/in predefined parameters; the alert compliance department to identify potential outliers and deviations from normal policy that may need to be reviewed
What are the 9 FATF style regional bodies
Asia pacific group on ML; caribbean financial action task force; council of europe committee of experts on the evaluation of anti money laundering measures and the financing of terrorism; eastern and southern africa anti money laundering group; financial action task force of latin america; inter governmental action group against ML in west africa; middle east and n africa financial action task force; task force on ML in central africa
According to FATF what categories of risk factors warrant EDD
Customer risk factors (complex ownership structures, cash intensive); country or geographic risk (countries w/ bad aml systems, countries subject to sanctions); product service transaction or delivery channel risk factors (private banking, anonymous transactions)
What are the topics of the six principles set forth in the Basel committess statement of principles called prevention of criminal use of the banking system for the purpose of ML
Customers id; compliance w/ laws; conformity w/ high ethical standards and local laws and regs; full cooperation w/ national LE to the extent permitted w/out breaching customer confidentiality; staff training; and recordkeeping audits
what are some risks posed by third party payment processsors TPPPs
Mulitple financial orgs relationships; whereby the TPPPs suspicious activity cannot be seen in its entirety; ML by sending funds directly to a financial org from a foreign jurisdiction through an intl ACH payments; and high return rates from unauthorized transactions
What are the 4 levels of AML/CFT risk?
Prohibited: the org will not tolerate any dealings of any kind given the risk; High Risk: risks are significant but not prohibited; Medium Risk: Risks merit addtl scrutiny but they do not rise to the level of high risk; Low Risk: the baseline of ML, normal expected activity
What is remote deposit capture and what risk is associated w/ it?
RDC is a bank product that allows customers to scan a check and transmit an electronic image to the bank for deposit. Because RDC minimizes human intervention, it decreases the ability to identify potential fraud indicators, such as an altered check and multiple deposits of the same item.
4 risks associated w/ ML that are faced by financial orgs
Reputational Risk (the potential that adverse publicity regarding an orgs business practices and associations will cause a loss of public confidence in the integrity of the org); Operational Risk (the potential for loss resulting from inadequate internal processes, personnel, or systems); Legal Risk (the potential for lawsuits, fines and penalties); Concentration Risk (loss resulting from too much credit or loan exposure to one borrower or group of borrowers)
According to the Basel Committees january 2014 guidelines, Sounds mgmt of risks related to ML and financing of terrorism, what controls should banks implement
Risk analysis of governance; three lines of defense; customer due diligence and acceptance; transaction monitoring systems and ongoing monitoring; mgmt of info; and reporting of suspicious transactions and asset freezing
Why is it important for orgs to continue to update and revisit their AML/CFT risk assessments
Risk is dynamic and the environment is always changing.
3 important tasks that FATF focuses on to fulfill its objectives
Spreading antimoney laundering message worldwide; monitoring the implementation of the FATF recs among FATF members; and reviewing the ML trends and counter measures
Basic difference between the crimes of terrorist financing and ML
TF uses funds for an illegal purpose but $ is not necessarily derived from the illicit proceeds. ML always uses the proceeds of an illegal activity
How should a global financial org address the performance of customer DD across its various ops
THe org should clearly communicate these polices and procedures through ongoing training and regular communications, and conduct monitoring and testing to ensure compliance w/ the policies and procedures.
Describe the factors that indicate a financial org is at risk for being used as a conduit for terrorist financing
Use of an account as a front for a person w/ suspected terrorist links; appearance of an account holders name on a list of suspected terrorists; frequent large cash deposits in nonprofit orgs; high volume of transactions; lack of clear relationship between banking activity and nature of account holders business
Describe the wolfsberg groups recommendation concerning a correspondent banks due diligence on a respondent bank
a banks due diligence on a respondent bank should be based on teh respondent banks risk profile and the nature of the business relationship.
How can trust accounts be used to launder money?
a trust can be used to convert illicit cash into less suspicious assets; help disguise criminal ownership of funds and other assets; hide assets from legitimate creditors and protect property from seizure. Payments to the trust benes can be used to launder money
Explain the roles of the following participants in the virtual currency (VC) ecosystem: user, exchanger, and admin
a user is a person who obtains VC to purchase goods or services. an exchanger is a person engaged as a business in exchange of VC for real currency, funds or other VC. An administrator is a person engaged as a business in issuing VC and who has the authority to redeem the VC
How is private banking defined under section 312 of the USA patriot act
acct w/ a minumum aggregate deposit of 1mil usd; an acct for one or more non us people; and an account that is assigned to a bank employee acting as a liaison w/ the non us person
Role of OFAC
administers and enforces economic and trade sanctions based on us foreign policy and national security goals against targeted foreign countries, terrorists etc. OFAC imposes controls on transactions and freezes foreign assets under us jurisdiction
Risk of prepaid bank cards
anonymous cardholders, anonymous funding, anonymous access to funds, high value limits and no limits on the number of cards an individual can acquire, global access to ATMs; offshore card issues that may not observe laws in all jurisdictions
Differentiate between what are referred to as FATFs black list and grey list
countries and jurisdictions on the black list have strategic deficiencies that are so serious that FATF calls on its members and non members to apply EDD and, in the most serious cases countermeasures. countries on the grey list are already engaged w/ fatf to address deficiencies.
Describe FATFs recs concerning the risk based approach
countries should start by identifying assessing and understanding the ML and terrorist financing risks they face. Then they should take appropriate measures to mitigate the identified risks. The risk based approach allows countries to allocate their limited resources in a targeted manner in line w/ their own specific circumstances to increase the efficiency of the preventative measures. Financial orgs should also use a risk based approach to id and mitigate their risks
List various functions of gatekeepers - attorneys, notaries, accountants, and auditors - that can be useful to ML
creating and managing corp vehicles and other complex legal arrangements.
Factors that contribute to vulnerabilities of Private Banking
culture of secrecy and discretion; role of relationship mgrs as client advocates to protect their clients
How can having a lawyer as a trustee on a clients account create vulnerabilities to ML at a financial inst.
enables lawyers to conduct transactions and administer the clients affairs.
What are the primary ways in which the EUs 2nd ML directive expanded the scope of the 1st directive
extended beyond rug related crimes; expanded the definition of criminal activity to cover all serious crimes; brought currency exchanges and money remittance offices under AML coverage; clarified that knowledge of the criminal conduct can be inferred from objective to factual circumstances; provided a more precise def of ML; and widened the business and professions that are subject to the obligation of the directive
Describe FATF Recommendations regarding suspicious activity reporting
financial orgs must report to the appropriate FIU when they suspect or have reasonable grounds to suspect that funds are the proceeds of criminal activity or are related to terrorist financing. The financial org and employees reporting such suspicions should be protected from liability reporting and prohibited from disclosing that they have reported such activity. Confidentiality concerning suspicious activity reports SARs is critical to effective functioning of the reporting regime
The Wolfsberg Group and the FATF recommend what enhanced due diligence before commencing or continuing a business relationship w/ high risk customers
for high risk customers, both the wolfsberg group correspondent banking principles and the FATF recommend obtaining the approval of senior mgmt. to commence or continue the business relationship, as well as requiring the first payment to be carried out through an account in the customers name w/ a bank subject to similar cdd standards
why is gold vulnerable to ML and terrorist financing
gold has high intrinsic value in a compact and easy to transport form. It can be bought and sold simply and often anonymously for currency in most areas of the world, allowing criminals to convert their illicit cash into anonymous transferrable assets.
what are some of the target audiences for training
most areas of the org should receive; cust facing staff, ops personnel; aml/cft compliance staff; senior mgmt and BOD; independent testing staff.
What motivated passage of the USA patriot act
motivated by sept 11 and urgent need to decipher and disable mechanisms that finance terrorism; Has implications for US orgs and non US orgs that do business in the US
Common ML techiniques involved w/ trade based ML
overinvoicing and underinvoicing; overshippins and short shipping; ghost shipping; shell companies; black market trades
Ways travel agencies can be used in ML
purchasing tix for another person who then requests a refund. structing wire transfers in small amounts to avoid recordkeeping, establishing tour operator networks w/ false bookings
Yates memo
reminds prosecutors that criminal and civil investigations into corp. misconduct should also focus on individuals who perpetrated the wrongdoing. It notes that the resolution of a corp case doesn't provide protection to individuals from crimial or civil liability
What steps should independent audit take to evaluate the ability of transaction monitoring software to identify unusual activity
review policies, procedures, and processes for suspicious activity monitoring; review the processes for ensuring the completeness, accuracy, and timeliness of the data supplied by the source of transaction processing systems; evaluate the methodology for establishing and analyzing expected activity and filtering criteria; evaluate the appropriateness of the monitoring reports; and compare transaction monitoring typologies w/ the AML/CFT risk assessment for reasonableness
what are some specific controls that emoney institutions can implement to mitigate the ML risks of prepaid cards, mobile payments, and internet based payment services
robust oversight of outsourced functions; limits on storage values, transactions, and turnover; transaction monitoring systems capable of detecting ML patterns and deviations; systems to ID customers w/ multiple purses; geographic restrictions on the use and function of emoney products
how does section 319a of the usa patriot act affect non us banks that have an account w/ a us financial org
section 319a strengthened the forfeiture powers over the funds of foreign persons and orgs.the us may bring a case to forfeit the crime tainted funds in the us account
What are some emerging risks of terrorist financing
self funding by foreign terrorist fighters; raising funds through social media; new payment products and services and exploitation of natural resources
what are 4 related purposes for establishing or controlling a shell company for ML
shell companies convert the cash proceeds of a crime into alternative assets; create the perception that illicit funds were generated from a legit source; facilitate a wide range of legit and/or fake business transactions that can be used to further the laundering process; and conceal criminal ownership
What factors should be considered when determining the level of sophistication of an orgs compliance function?
should be based on upon the orgs nature, size, complexity, regulatory environment, and the specific risks associated w/ its products, services and customers. No tow orgs will have exactly the same compliance structures because the risks facing each org are different
What is involved in the independent audits review of case mgmt and SAR systems
should include an evaluation of the research and referral of unusual transactions and review of polices, procedures, and processes for referring unusual and suspicious activity from all business lines to the personnel responsible for investigating it
What was considered a predicate offense for ML under the 1t EU ML directive
the 1st directive of 1991 confined predicate offenses of ML to drug trafficking. However, member states were encouraged to extend predicate offenses to other crimes
black market peso exchange
the BMPE is a process by which money in the US derived from illegal activity is purchased by peso brokers and deposited in US bank accounts established by the brokers. The brokers sell checks and wire transfers drawn on those accounts to legitimate businesses, which use them to purchase goods and services in the US
according to the basel committee what are the responsibilities of the board of directors related to AML/CFT compliacne
the BOD plays a critical oversight role.
Which of the FATF-Style Regional Bodies issued its own set of 19 recommendations, which were specific to the region?
the caribbean financial action task force
what are criteria to be FATF
the jurisdiction should be strategically important based on quantitative, and qualitative indicators., addtl considerations, and FATF geographic balance should be enhanced
What are the FATF designated thresholds that should trigger AML scrutiny
the threshold for financial orgs should monitor for occasional customers is 15k USD(Recommendation 10); for casinos 3k USD(recommendation 22); and for dealers of precious metals is 15k USD (recommendation 22-23)
Describe ways in which the investment and commodity advising industry is susceptible to ML
w/drawal of assets through transfers to unrelated accounts or high risk jurisdictions; frequent addts to or w/drawals from accounts; checks drawn on or wire transfers from accounts of 3rd parties w/ no relation to the client; clients who request custodial arrangements that allow for anonymity; investing illegal proceeds for a client; and mvmt of funds to disguise their origin