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Questions and Answers
What is the purpose of money laundering?
What is the purpose of money laundering?
- To promote economic growth
- To cover up criminal activities like drug trafficking and tax evasion (correct)
- To make legal money appear illegal
- To donate to charity
What are AML laws designed to do?
What are AML laws designed to do?
- Encourage money laundering
- Promote tax evasion
- Increase the scope of illegal activities
- Eliminate money laundering and terrorist financing activities (correct)
What is the role of international authorities like FATF and World Bank in controlling money laundering?
What is the role of international authorities like FATF and World Bank in controlling money laundering?
- They promote money laundering activities
- They encourage terrorist financing activities
- They have no role in controlling money laundering
- They collaborate with national authorities and state banks to control money laundering (correct)
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Study Notes
- Money laundering is the process of making illegal money appear legitimate.
- It is used to cover up criminal activities like drug trafficking, terrorist funding, and tax evasion.
- Anti-money laundering (AML) laws are implemented to eliminate money laundering and terrorist financing activities.
- Initially, AML laws were implemented only on financial institutions to control drug trafficking.
- AML and counter financing of terrorism (CFT) have become global concerns.
- International authorities like FATF and world bank collaborate with national authorities and state banks to control money laundering.
- Pakistan has the Anti-Money Laundering Act, 2010 to deter criminals from hiding ill-gotten money.
- AML regulations require financial institutions to monitor customers' transactions and report on suspicious financial activity.
- The scope of AML laws has increased significantly.
- Strict AML laws have been implemented globally.
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