Podcast
Questions and Answers
What is the primary goal of a risk assessment in AML/CFT?
What is the primary goal of a risk assessment in AML/CFT?
What is the main purpose of customer due diligence?
What is the main purpose of customer due diligence?
What is the primary objective of transaction monitoring?
What is the primary objective of transaction monitoring?
What is the primary purpose of sanctions screening?
What is the primary purpose of sanctions screening?
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Which AML/CFT regulation is specific to the European Union?
Which AML/CFT regulation is specific to the European Union?
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What is the main purpose of Suspicious Activity Reporting (SAR)?
What is the main purpose of Suspicious Activity Reporting (SAR)?
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What technique is often used to avoid detection and reporting thresholds in transaction monitoring?
What technique is often used to avoid detection and reporting thresholds in transaction monitoring?
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Which authority is responsible for enforcing AML/CFT regulations in the USA?
Which authority is responsible for enforcing AML/CFT regulations in the USA?
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Study Notes
AML (Anti-Money Laundering)
Risk Assessment
- Identifying and assessing the risk of money laundering and terrorist financing
- Evaluating customer risk, product risk, and geographic risk
- Developing a risk-based approach to AML/CFT (Combating the Financing of Terrorism)
Customer Due Diligence (CDD)
- Verifying customer identity and address
- Identifying and verifying beneficial ownership
- Conducting ongoing monitoring of customer activity
- Applying enhanced due diligence (EDD) for high-risk customers
Transaction Monitoring
- Monitoring customer transactions to identify suspicious activity
- Identifying patterns and anomalies in transaction data
- Flagging transactions that exceed certain thresholds or meet specific criteria
- Investigating and reporting suspicious transactions
Sanctions Screening
- Screening customers, vendors, and transactions against sanctions lists
- Identifying matches and false positives
- Implementing restrictions or freezing assets for matches
Compliance Regulations
- AML/CFT regulations vary by country and region
- Key regulations include:
- USA: Bank Secrecy Act (BSA)
- EU: 4th and 5th Anti-Money Laundering Directives
- International: FATF (Financial Action Task Force) Recommendations
Suspicious Activity Reporting (SAR)
- Reporting suspicious transactions to the relevant authorities
- Filing SARs with the Financial Crimes Enforcement Network (FinCEN) in the USA
- Protecting customer information and maintaining confidentiality
Suspicious Transaction Reporting (STR)
- Reporting suspicious transactions to the relevant authorities
- Filing STRs with the Financial Intelligence Unit (FIU) in the EU
- Similar to SARs, but with varying requirements and thresholds
Bank Secrecy Act (BSA)
- USA legislation aimed at preventing money laundering and terrorist financing
- Requires financial institutions to maintain records and report suspicious activity
- Implemented by FinCEN and enforced by various regulatory agencies
Smurfing
- A money laundering technique involving breaking large transactions into smaller ones
- Designed to avoid detection and reporting thresholds
- Often used in conjunction with other money laundering methods
AML (Anti-Money Laundering)
Risk Assessment
- Risk assessment involves identifying and evaluating money laundering and terrorist financing risks
- It considers customer risk, product risk, and geographic risk
- A risk-based approach is developed to combat money laundering and terrorist financing (AML/CFT)
Customer Due Diligence (CDD)
- Customer due diligence involves verifying customer identity and address
- It requires identifying and verifying beneficial ownership
- Ongoing monitoring of customer activity is conducted
- Enhanced due diligence (EDD) is applied to high-risk customers
Transaction Monitoring
- Transaction monitoring involves monitoring customer transactions to identify suspicious activity
- It identifies patterns and anomalies in transaction data
- Transactions exceeding certain thresholds or meeting specific criteria are flagged
- Suspicious transactions are investigated and reported
Sanctions Screening
- Sanctions screening involves screening customers, vendors, and transactions against sanctions lists
- Matches and false positives are identified
- Restrictions are implemented or assets frozen for matches
Compliance Regulations
- AML/CFT regulations vary by country and region
- Key regulations include the USA's Bank Secrecy Act (BSA), EU's 4th and 5th Anti-Money Laundering Directives, and International FATF Recommendations
Suspicious Activity Reporting (SAR)
- Suspicious activity is reported to relevant authorities
- SARs are filed with FinCEN in the USA
- Customer information is protected, and confidentiality is maintained
Suspicious Transaction Reporting (STR)
- Suspicious transactions are reported to relevant authorities
- STRs are filed with the Financial Intelligence Unit (FIU) in the EU
- Requirements and thresholds vary from SARs
Bank Secrecy Act (BSA)
- BSA is USA legislation aimed at preventing money laundering and terrorist financing
- Financial institutions must maintain records and report suspicious activity
- FinCEN implements and enforces BSA, with various regulatory agencies involved
Smurfing
- Smurfing is a money laundering technique involving breaking large transactions into smaller ones
- It is designed to avoid detection and reporting thresholds
- Often used in conjunction with other money laundering methods
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Description
Assess the risk of money laundering and terrorist financing, evaluate customer and product risk, and learn about customer due diligence measures. Topics include risk-based approaches, identity verification, and ongoing monitoring.
