AML/CFT/KYC Overview
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Questions and Answers

What are the three main components of AML/CFT/KYC?

  • Anti-Money Laundering, Combating the Financing of Terrorism, Know Your Company
  • Anti-Money Laundering, Combating the Financing of Terrorism, Know Your Customer (correct)
  • Anti-Money Laundering, Combating the Financing of Terrorism, Know Your Business
  • Anti-Money Laundering, Combating the Financing of Terrorism, Know Your Client

    • Which of these are considered 'Legal Sources' of terrorist financing?

  • Donations from Non-Profit Organizations
  • Both A and B (correct)
  • Proceeds of criminal activities by the Terrorists
  • Donations from Profit Making Organizations

    • What is the primary purpose of 'Know Your Customer' (KYC) policies?

  • To create a detailed profile of customers for social media campaigns
  • To increase the bank's customer base by attracting high-risk individuals
  • To ensure the bank is operating within legal compliance and prevent fraudulent activities (correct)
  • To collect personal information from customers for marketing purposes

    • What are the three critical stages of money laundering?

    <p>Placement, Layering, and Integration</p> Signup and view all the answers

    The '3-Tiered KYC Approach' introduced by CBN in 2013 was designed to strictly enforce consistent KYC requirements for all customers, regardless of the value of their transactions.

    <p>False</p> Signup and view all the answers

    What is the difference between 'Customer Due Diligence' (CDD) and 'Enhanced Due Diligence'?

    <p>Enhanced due diligence is a more rigorous form of CDD specifically applied to high-risk customers, transaction types, or business relationships.</p> Signup and view all the answers

    Which of the following is NOT a red flag that may indicate potential money laundering activity?

    <p>A customer asking for financial advice on investment opportunities</p> Signup and view all the answers

    What is the primary responsibility of the Compliance Officer in a financial institution?

    <p>To monitor financial transactions and ensure compliance with KYC/AML regulations</p> Signup and view all the answers

    What is the primary goal of the Financial Intelligence Unit (NFIU)?

    <p>To collect, analyze, and disseminate financial intelligence to prevent and combat money laundering and terrorist financing.</p> Signup and view all the answers

    Which of the following is a crucial element of effective risk management in KYC/AML?

    <p>Proactively identifying and mitigating potential risks associated with customer relationships</p> Signup and view all the answers

    What is the primary purpose of implementing a 'Terrorism Prevention Act'?

    <p>To prevent the financing of terrorist activities and disrupt their operations</p> Signup and view all the answers

    The NDLEA Act 1995 has been amended over the years to include more stringent measures against money laundering and terrorist financing.

    <p>True</p> Signup and view all the answers

    Give one example of a red flag that may indicate potential money laundering activity.

    <p>A customer conducting a high-value transaction in cash without providing a reasonable explanation for the source of funds.</p> Signup and view all the answers

    Banks are legally obligated to disclose suspicious transactions to authorities, even if they risk breaching confidentiality rules.

    <p>True</p> Signup and view all the answers

    Signup and view all the answers

    Study Notes

    AML/CFT/KYC Overview

    • AML stands for Anti-Money Laundering
    • CFT stands for Combating the Financing of Terrorism
    • KYC stands for Know Your Customer
    • The aim of these concepts is to prevent and combat money laundering and terrorist financing.

    Course Objectives

    • Trainees will understand AML, CFT, and KYC concepts
    • They'll learn about the destructive nature of money laundering and terrorist financing
    • Trainees will understand "Know Your Customer" (KYC) / Business (KYCB)
    • Global and local initiatives to fight ML and CFT
    • Statutory obligations of Banks
    • The need for compliance and the implications for non-compliance

    Presentation Sections

    • Introduction to AML/CFT/KYC
    • Money Laundering Process/Impacts
    • Know Your Customer / Business (KYC/KYCB)
    • Global and Nigerian Initiatives
    • Roles of Operations Units in Banks
    • Case Studies

    Section 1 Outline

    • General definition of Money Laundering
    • Anti Money Laundering (AML)
    • UN Definition of Money Laundering
    • Combating the Financing of Terrorism (CFT)
    • Know Your Customers (KYC) and Know Your Customer's Business (KYCB)
    • Money Laundering (ML) Offences
    • Financing of Terrorism(FT) Offences
    • Big Money Laundering Players / Big Terrorist Players

    Section 2: Money Laundering Process and Impacts

    • Criminal Activities Leading to Money Laundering
    • Critical Stages of Money Laundering with Illustration
    • Popular Banks and Non-Bank Products Used for Money Laundering
    • Global Scale of Money Laundering Problem
    • Characteristics of Fertile Countries for Money Laundering
    • Profiles of High Risk Countries/Customers/Channels
    • Impacts of ML and FT on Society, Economic Development, & Financial Institutions.

    Section 3: Know Your Customer / Business (KYC/KYCB)

    • Introduction to KYC/KYCB
    • Objectives of KYC Guidelines
    • KYC Policy Roles and its Elements
    • Customer Definition and Classifications
    • Establishing Customer Identity
    • Evidence of Customer Identity
    • Monitoring Customer Transactions
    • Customer Risk Categories
    • Politically Exposed Persons (PEPs)
    • General Challenges of KYC/KYCB
    • Risk Management

    Section 4: AML/CFT Initiatives

    • Global Bodies & Initiatives
    • Nigeria Initiatives
    • Description of FATF (Financial Action Task Force)
    • Nigeria's Relevant Initiatives (NDLEA etc)
    • FATF Recommendations

    Section 5: Roles of Banking Operations Units

    • Summary of Roles of Operations Unit Staff & Compliance Officers
    • Operations Unit Staff Caution
    • Transaction Reporting Threshold(s)

    Section 6: Customer Due Diligence

    • Monitoring of Transactions - Customer Due Diligence(CDD)
    • Higher Risk Categories of Customers
    • Politically Exposed Persons (PEPs)
    • Suspicious Transaction Reporting

    Appendix

    • Case Studies (Money Laundering, Relationship Dilemmas, etc.)

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    Related Documents

    AML/CFT/KYC Students Manual PDF

    Description

    This quiz provides an in-depth overview of Anti-Money Laundering (AML), Combating the Financing of Terrorism (CFT), and Know Your Customer (KYC) concepts. Trainees will learn about the implications of non-compliance and the various initiatives aimed at preventing money laundering and terrorist financing. It covers definitions, processes, and relevant case studies.

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