ICA Advanced Certificate in AML Course Manual

Money laundering

False (B)

<p>To prohibit US companies and individuals from bribing foreign officials to obtain or retain business.</p> Signup and view all the answers

<p>The act of providing funds or financial services that are used to develop, manufacture, transport, or acquire nuclear, chemical, or biological weapons.</p> Signup and view all the answers

<p>Counterfeiting currency (A)</p> Signup and view all the answers

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

<p>False (B)</p> Signup and view all the answers

<p>To establish international standards and promote effective implementation of measures to combat money laundering, terrorist financing, and proliferation financing.</p> Signup and view all the answers

<p>False (B)</p> Signup and view all the answers

<p>The Corruption, Drug Trafficking, and Other Serious Crimes (Confiscation of Benefits) Act (CDSA)</p> Signup and view all the answers

The process of disguising the illegal origins and ownership of criminal property to make it appear to have come from a legitimate source.

A crime that is a part of a greater crime. In a money laundering context, this would be an offence that creates monetary proceeds.

The abuse of entrusted power for private gain.

It's the provision or collection of funds with the intention that they should be used (or in the knowledge that they are to be used) to carry out acts that support terrorists or terrorist organizations or to commit acts of terrorism.

The act of providing funds or financial services which are used, in whole or in part, for the manufacture, acquisition, possession, development, export, trans-shipment, brokering, transport, transfer, stockpiling or use of nuclear, chemical or biological weapons and their means of delivery and related materials (including both technologies and dual-use goods used for non-legitimate purposes), in contravention of national laws or, where applicable, international obligations.

Types of goods, software and technology that are normally used for civilian purposes but that may have military applications, or may contribute to the proliferation of WMDs.

Measures implemented to attempt to change the behaviour of a targeted country or regime where diplomatic efforts have failed, or to restrict the funding of individuals entities or groups associated with criminal or terrorist activity.

The placement of funds generated from crime into the financial system, either directly or indirectly.

The process of separating illicit proceeds from their source by creating complex ‘layers’ of financial transactions designed to disguise the audit trail and provide anonymity.

The provision of apparent legitimacy to criminally derived wealth. If the layering process has succeeded, integration schemes place the laundered proceeds back into the economy in such a way that they re-enter the financial system and appear to be legitimately earned or acquired funds.

The UNCAC is the only legally binding international anti-corruption instrument. It requires states to criminalise money laundering and adopt effective measures to prevent it, and by urging the recovery of the proceeds of corruption and the establishment of financial intelligence units (FIUs).

The FCPA (1977) generally prohibits the payment of bribes to foreign officials to assist in obtaining or retaining business. The Act can apply to prohibited conduct anywhere in the world and extends to publicly traded companies and their officers, directors, employees, stockholders and agents.

The UK Bribery Act consists of a framework of two main offences. Section 1 of the Act covers active bribery, i.e., the giving, promising, and offering of a bribe. Section 2 covers passive bribery, requesting or agreeing to receive or accept a bribe, whether in the UK or overseas.

The illegal non-payment or under-payment of taxes.

The UK government defines offshore tax evasion in the following terms: Offshore evasion is using a non-UK jurisdiction with the objective of evading UK tax. This includes moving UK gains, income or assets offshore to conceal them from HMRC; not declaring taxable income or gains that arise overseas, or taxable assets kept overseas; and using complex offshore structures to hide the beneficial ownership of assets, income or gains.

A system that is used for transferring money from one location to another while generally operating outside the formal banking regime.

Hawala is a name for a type of ARS.

Financial institutions should incorporate the risk of proliferation financing within their controls to combat money laundering and terrorist financing and apply these to firms that might manufacture or trade in dual-use goods.

The international network of financial services allows money to be moved with ease. As with money laundering, complex layers of transactions can be carried out in a matter of minutes. Terrorists use the financial sector to store and move funds globally.

Actively promoting economic cooperation, human rights and democracy within the framework of the Common Foreign and Security Policy (CFSP), the EU applies sanctions or restrictive measures in pursuit of the specific CFSP objectives set out in the Treaty of the European Union.

Under Chapter VII of the UN Charter, the Security Council (UNSC) can take enforcement measures to maintain or restore international peace and security.

To ensure that a robust sanctions-compliance control framework is in place and operating effectively, financial institutions must understand the products and services they offer, identify areas where they may be vulnerable to the risk of sanctions breaches, and put controls in place to mitigate these sanctions risks.

The UN sanctions regime will respond to new or emerging developments, for instance, in light of political unrest in a country, they may impose sanctions to restrict the finances and movement of key persons.

A significant UN sanction was UNSC Resolution 1373 of 2001. This requires member states to freeze the assets of those involved in terrorist acts and prohibit the provision of funds and financial services to them.

The common characteristic of such systems is that their objective is the transfer of funds between different countries using a variety of informal methods and tools.

While individual attacks can produce great damage at low financial cost, a significant financial infrastructure is required to sustain international terrorist networks and promote their goals.

Often many ARS providers operate other businesses, typically retail businesses such as travel agencies, pawnshops and grocery stores, alongside their operations.