Financial Monitoring in Cash-Intensive Industries
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Questions and Answers

What is the primary purpose of discussing mitigating factors in the context of anti-money laundering compliance?

  • To determine the appropriate sanctions to impose on the customer
  • To provide evidence of criminal activity and support prosecution
  • To reduce the financial institution's liability and legal exposure in the event of regulatory action (correct)
  • To assess the plausibility of the customer's story and determine if further investigation is warranted

    • Which of the following would NOT be considered a mitigating factor in the context of anti-money laundering compliance?

  • The customer provides a detailed invoice with supporting documentation
  • The customer is owned by a publicly traded parent company
  • The customer is supervised by a regulatory authority in a high-risk country (correct)
  • The customer is affiliated with a reputable industry organization through certification

    • If a customer made a cash payment of €70,000 in an increased risk country, what should the financial institution do?

  • Investigate the transaction further to determine the plausibility of the customer's explanation (correct)
  • Accept the payment and continue the business relationship, as the invoice provided is a mitigating factor
  • Require the customer to provide additional documentation and information about the source of funds
  • Immediately file a suspicious activity report and terminate the relationship

    • What is the significance of a customer being affiliated with a reputable industry organization through certification?

    <p>It provides additional oversight and monitoring of the customer's activities</p> Signup and view all the answers

    What is the primary purpose of the financial institution asking the customer about its policies to counter bribery, money laundering, and other fraudulent activities?

    <p>To assess the customer's level of awareness and commitment to compliance</p> Signup and view all the answers

    What is the significance of a customer being owned by a publicly traded parent company as a mitigating factor?

    <p>It provides additional oversight and monitoring of the customer's activities by regulators and investors</p> Signup and view all the answers

    What is one strategy mentioned in the text to address the challenge of monitoring financial transactions in cash-intensive industries?

    <p>Dividing customers into peer groups</p> Signup and view all the answers

    Which of the following industries is NOT mentioned as an example of a sector with frequent cash payments?

    <p>Online retail stores</p> Signup and view all the answers

    What action must casinos and gaming establishments take to comply with regulations?

    <p>Reporting suspicious transactions</p> Signup and view all the answers

    Why is it challenging to detect Financial Economic Crime in cash-intensive businesses?

    <p>The mixing of legitimate income with potentially criminal funds</p> Signup and view all the answers

    In which situation might a casino report a suspicious transaction to the Financial Intelligence Unit?

    <p>A young person presenting 3,000 euros in cash</p> Signup and view all the answers

    What is one way suggested in the text to reduce the risks of financial irregularities in cash-intensive industries?

    <p>Closely observing and comparing financial activities within the sector</p> Signup and view all the answers

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