Rdi: Anti Money Laundering Quiz

Your first priority is to bring the transactions to your Supervisor who in turn is obliged to report it to his/her manager should it be deemed necessary

Money laundering is the act of disguising the origins of illegally obtained money by passing it through a complex sequence of banking transfers or commercial transactions. This process allows the illicit funds to appear legitimate and be integrated into the legal economy. Therefore, the statement that money laundering is the process by which the proceeds of criminal activity are introduced into the legitimate mainstream of financial commerce is true.

The correct answer is "All of the above." All of these options can be used to launder money. Property can be purchased with illicit funds and then sold to make the money appear legitimate. Similarly, businesses can be used to mix illegal proceeds with legitimate income. Racehorses can also be bought and sold to hide the source of illegal funds. Therefore, all three options can be utilized in money laundering activities.

The three stages of money laundering are placement, layering, and integration. Placement refers to the process of introducing illicit funds into the financial system. Layering involves conducting multiple transactions to obscure the source of the funds and create a complex trail. Integration is the final stage, where the laundered money is reintroduced into the legitimate economy, making it difficult to trace its illicit origins. Therefore, the correct answer is placement, integration, and layering.

A PEP or Politically exposed person is anyone that is deemed to be vulnerable to blackmail or bribery and their information must be deemed as sensitive

5 Years - All records including any information obtained about the customer including proof that verification of their name and address has been carried out.

The correct answer is C. While the bank may want to visit the prospect, that is not the common reason for requesting a utility bill and personal visits are not the norm. Further the monthly expenses (b) has no real relevance.

All of the above would cause concern and be a 'Red Flag' after starting a business relationship with a client. Unrealistic wealth compared to profile could indicate potential fraudulent activity or misrepresentation. Trades with no/little benefits and losses without concern could suggest risky or unethical behavior. Large/rapid movement of funds could be a sign of money laundering or other illegal financial activities. Therefore, all of these factors would raise concerns and be considered red flags in a business relationship.

All of these activities might require a suspicious activity report because they exhibit behaviors that are indicative of potential illegal or fraudulent activities. Cancelling a transaction to avoid providing identification, requesting unusually high dollar transactions without explanation or source of funds, appearing nervous and asking unusual questions, and attempting to bribe a teller are all red flags that warrant reporting to authorities for further investigation.

It is up to each individual to be vigilant to combat money laundering. The law sees no excuse in those who do not react

The correct answer is A. Local entities licensed under a financial services regulator qualify as eligible introducers.

Spending is not a step in money laundering because it involves the legitimate use of funds for purchasing goods or services. Money laundering typically involves three main steps: placement, layering, and re-integration. Placement refers to the process of introducing illegal funds into the financial system. Layering involves complex transactions to obscure the origin and ownership of the funds. Re-integration is the final step where the laundered money is integrated back into the legitimate economy. Spending, on the other hand, is a normal and legal activity that does not involve hiding or disguising the source of funds.

Compliance responsibility lies with all of the above options, which include the Board of Directors, Senior Management & Staff, and the Compliance Office. This means that all individuals in these positions have a role to play in ensuring compliance with laws, regulations, and internal policies. The Board of Directors sets the overall compliance tone and provides oversight, while Senior Management & Staff are responsible for implementing and enforcing compliance measures. The Compliance Office, on the other hand, is specifically tasked with developing and managing compliance programs. Therefore, all three options share the responsibility for compliance.

Layering is the correct term used to describe the process of sending money through multiple financial institutions to make it difficult to track. This technique involves moving funds through various accounts and transactions, creating multiple layers of complexity and obfuscation. The purpose of layering is to obscure the origin and destination of the funds, making it challenging for authorities to trace and detect any illicit activities such as money laundering or terrorist financing.

FATF is the task force assigned to advise governments of their AML requirements

Birth Certificate is not acceptable as verification of identity because it does not contain a photograph or physical description of the individual, making it easier to forge or impersonate someone else. Passports and Driving Licences, on the other hand, typically include a photograph and other personal details, making them more reliable forms of identification.

The customer's behavior of requesting the same amount of money for four consecutive days raises suspicion. This could indicate a pattern of potential money laundering or illegal activity. Therefore, it is necessary to report this activity as suspicious to the appropriate authorities.

The answer is C. Specific circumstances (which are defined) require enhanced due diligence, such as limited interaction with the prospect, an exposed person, a high risk country.

Smurfing is the term used to describe the practice of breaking up large sums of money into smaller amounts for deposit in order to avoid detection by authorities. This is done to circumvent the requirement for banks to report deposits of $10,000.00 or more, as multiple smaller deposits may not trigger the reporting threshold. Smurfing is often associated with illegal activities such as money laundering, as it allows individuals or organizations to conceal the true source or purpose of the funds.

Charities are not considered as 'low risk' customers because they often handle large amounts of money and donations, making them potential targets for money laundering or other financial crimes. Unlike other regulated financial institutions, listed companies, and government/public authorities, charities may have less stringent financial controls and oversight, making them more vulnerable to risks associated with financial transactions. Therefore, charities are not classified as 'low risk' customers.

Customer Due Diligence is the responsibility of the company to verify and monitor all customers transactions to ensure they are not acting in an unlawful way - it is up to every memeber of boylesports to be vigilent for this

The three possible indicators to look for in Money Laundering are: unusual volume of payment destinations, often with the same provider; numerous withdrawals, just under the qualifying threshold; and multiple and frequent deposits followed by multiple and frequent withdrawals, either shortly afterwards or overlapping further deposits. These indicators suggest suspicious activity where funds are being moved around rapidly and in large quantities, potentially to disguise the source or destination of the money.

Customer Due Diligence (CDD) is the responsibility of customer facing staff. These employees are directly involved in interacting with customers and gathering necessary information to assess the risk associated with them. They are responsible for verifying the identity of customers, conducting background checks, and ensuring compliance with regulatory requirements. Customer facing staff play a crucial role in implementing CDD measures to prevent money laundering, terrorist financing, and other financial crimes. They are trained to identify suspicious activities, report any concerns, and maintain a high level of vigilance in order to protect the organization and its customers from potential risks.

A PEPs stockbroker is not considered a 'high risk' customer because PEPs (Politically Exposed Persons) are individuals who hold prominent public positions, such as government officials or high-ranking executives in state-owned enterprises. While PEPs themselves are considered high risk due to their potential involvement in corruption or money laundering, a stockbroker who deals with PEPs is not inherently high risk as long as they follow proper due diligence and regulatory procedures. The other options listed - cash intensive businesses, customers with complex ownership structures, and customers with ownership through 'bearer shares' - are all typically associated with higher risk due to the potential for money laundering or illicit activities.

Layering is the laundering stage that separates the illicit money from its source, obscures the audit trail, and severs links with the original crime to make it appear like a normal financial transaction. During this stage, multiple complex transactions are conducted, often involving different jurisdictions and financial institutions, in order to confuse and complicate the tracing of the money. This process typically includes the use of shell companies, offshore accounts, and various financial instruments to further conceal the illicit origin of the funds.