Cam AML/Cft Training Quiz

Failure to report suspicious activities can result in penalties or legal action against you and your company because reporting suspicious activities is an important part of maintaining the security and integrity of a company's operations. Failing to report such activities can indicate negligence or complicity, which can lead to legal consequences. Additionally, reporting suspicious activities helps law enforcement agencies to prevent potential crimes or threats, making it a crucial responsibility for individuals and organizations.

Filtration is not an element of money laundering. Money laundering typically involves three stages: placement, layering, and integration. Placement refers to the process of introducing illegal funds into the financial system. Layering involves complex transactions to obscure the origin of the funds. Integration is the final stage where the laundered money is made to appear legitimate. Filtration is not a recognized stage in the process of money laundering.

All of the options mentioned in the question should raise a "red flag" in terms of potential financial risk. A customer who is reluctant to provide information may be trying to hide something or engage in fraudulent activities. A customer with no legitimate reason to use the financial sector in Guernsey may also be involved in suspicious activities. Transactions that are significantly larger or more frequent than usual can indicate money laundering or other illicit activities. Transactions involving "high risk" jurisdictions are also more likely to be associated with illegal activities. Lastly, unnecessary use of third parties can be a sign of attempts to conceal the true nature of transactions. Therefore, all of these factors should be considered warning signs.

Smurfing is the term used to describe the act of breaking up large sums of money into smaller amounts for deposit. This is typically done to avoid suspicion or detection by authorities, as large deposits may trigger investigations into the source of the funds. Smurfing involves multiple individuals making smaller deposits, often at different locations, to make it more difficult to track the origin of the money.

A birth certificate is not acceptable as verification of identity because it only provides information about a person's birth and does not contain a photograph or other identifying details. In contrast, a passport, driving license, and identity book all include a photograph and other personal information that can be used to verify a person's identity.

Kevin Wakeham is CAM's Money Laundering Reporting Officer.