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Questions and Answers
What is the primary goal of terrorist financing?
What is the primary goal of terrorist financing?
- To finance terrorist activities, such as weapons purchases or operational costs (correct)
- To detect and prevent fraud
- To comply with anti-money laundering regulations
- To conceal the source of funds
Which of the following is an example of an anti-money laundering regulation?
Which of the following is an example of an anti-money laundering regulation?
- USA Freedom Act
- Customer due diligence (CDD) procedures
- Financial Action Task Force (FATF) guidelines (correct)
- Hamas financing network
What is the purpose of customer due diligence (CDD) in fraud detection?
What is the purpose of customer due diligence (CDD) in fraud detection?
- To verify customer identities and activities (correct)
- To monitor cash transactions
- To report suspicious transactions
- To train employees to recognize suspicious activity
What is the purpose of cash transaction reporting?
What is the purpose of cash transaction reporting?
What is the typical threshold for cash transaction reporting in the USA?
What is the typical threshold for cash transaction reporting in the USA?
What is the purpose of training employees in fraud detection?
What is the purpose of training employees in fraud detection?
What could be a reason to report a transaction as suspicious?
What could be a reason to report a transaction as suspicious?
What should be done when a customer provides insufficient information about a transaction?
What should be done when a customer provides insufficient information about a transaction?
Why was the transaction in Example 6 suspicious?
Why was the transaction in Example 6 suspicious?
What should be done when a customer is on the OFAC sanctions list?
What should be done when a customer is on the OFAC sanctions list?
Is there a monetary threshold for reporting suspicious transactions?
Is there a monetary threshold for reporting suspicious transactions?
Who is responsible for reporting suspicious transactions?
Who is responsible for reporting suspicious transactions?
What is the main purpose of a Suspicious Transaction Report (STR)?
What is the main purpose of a Suspicious Transaction Report (STR)?
What is the typical characteristic of a shell bank?
What is the typical characteristic of a shell bank?
What is the purpose of splitting transactions into smaller ones, as described in the context of smurfing?
What is the purpose of splitting transactions into smaller ones, as described in the context of smurfing?
What is the primary goal of a Risk Management Compliance Program (RMCP)?
What is the primary goal of a Risk Management Compliance Program (RMCP)?
What is the purpose of a Terrorist Financing Activity Report (TFAR)?
What is the purpose of a Terrorist Financing Activity Report (TFAR)?
What is the main purpose of a Suspicious Activity Report (SAR)?
What is the main purpose of a Suspicious Activity Report (SAR)?
What type of report must be submitted in relation to the financing of terrorism and related activities?
What type of report must be submitted in relation to the financing of terrorism and related activities?
What type of institution is Border Forex considered as, according to Schedule 1 of the FIC Act?
What type of institution is Border Forex considered as, according to Schedule 1 of the FIC Act?
What is a domestic prominent influential person, according to Schedule 3A?
What is a domestic prominent influential person, according to Schedule 3A?
What is a transaction, in the context of the FIC Act?
What is a transaction, in the context of the FIC Act?
What type of report must be submitted when one knows that it possesses, or controls property linked to terrorism or to entities that are sanctioned?
What type of report must be submitted when one knows that it possesses, or controls property linked to terrorism or to entities that are sanctioned?
What is the purpose of submitting a Terrorist Financing Transaction Report (TFTR)?
What is the purpose of submitting a Terrorist Financing Transaction Report (TFTR)?
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Study Notes
Money Laundering
Terrorist Financing
- The process of providing financial support to terrorist organizations or individuals
- Often involves money laundering techniques to conceal the source of funds
- Can be used to finance terrorist activities, such as weapons purchases or operational costs
- Examples: Hamas, Al-Qaeda, and ISIS have all been known to use terrorist financing networks
Anti-money Laundering Regulations
- Designed to prevent money laundering and terrorist financing
- Implemented by governments and financial institutions to monitor and report suspicious transactions
- Examples:
- USA Patriot Act (USA)
- Bank Secrecy Act (USA)
- Financial Action Task Force (FATF) recommendations (international)
Fraud Detection
- Techniques used to identify and prevent money laundering and terrorist financing
- Includes:
- Customer due diligence (CDD): verifying customer identities and activities
- Ongoing monitoring of customer transactions
- Reporting of suspicious transactions
- Training for employees to recognize and report suspicious activity
Cash Transaction Reporting
- Reporting requirements for cash transactions exceeding a certain threshold (e.g. $10,000 in the USA)
- Used to detect and prevent money laundering and terrorist financing
- Financial institutions must report cash transactions to the relevant authorities (e.g. FinCEN in the USA)
Suspicious Activity Reporting
- Reporting of suspicious transactions or activities that may indicate money laundering or terrorist financing
- Financial institutions must report suspicious activity to the relevant authorities (e.g. FinCEN in the USA)
- Examples of suspicious activity:
- Unusual or large cash transactions
- Transactions with known criminal organizations or countries
- Transactions with shell companies or nominees
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