Money Laundering and Financial Crimes
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Questions and Answers

What is the main objective of layering in the money laundering process?

  • To physically dispose of cash proceeds
  • To appoint a Compliance Officer
  • To separate the proceeds of the crime from its source (correct)
  • To integrate the laundered proceeds back into the economy

    • What is the purpose of customer due diligence in AML compliance?

  • To report suspicious transactions
  • To identify and verify the customer's identity (correct)
  • To appoint a Compliance Officer
  • To integrate laundered proceeds back into the economy

    • What is one of the requirements for photocopying identification documents?

  • The documents must be photocopied in color
  • The documents must be verified but not stamped
  • The documents must be clear enough to recognize the picture (correct)
  • The documents must be stamped but not verified

    • What is the deadline for submitting quarterly reports?

    <p>15th of every quarter</p> Signup and view all the answers

    What is the purpose of integration in the money laundering process?

    <p>To place the laundered proceeds back into the economy</p> Signup and view all the answers

    What is the time period for the submission of a valid Power of Attorney (POA)?

    <p>Six months</p> Signup and view all the answers

    What is required for a Power of Attorney (POA) issued overseas?

    <p>It must be resealed in Guyana</p> Signup and view all the answers

    What is an example of a potentially higher-risk situation?

    <p>Politically Exposed Persons (PEPs)</p> Signup and view all the answers

    What is required for a Politically Exposed Person (PEP) transaction?

    <p>Approval by senior management</p> Signup and view all the answers

    What is a condition for a valid Power of Attorney (POA)?

    <p>It must clearly give authority ‘to sign and execute contracts’</p> Signup and view all the answers

    Study Notes

    Money Laundering

    • Placement refers to the physical disposal of cash proceeds, e.g., purchasing an insurance policy.
    • Layering involves separating the proceeds of a crime from its source through complex financial transactions.
    • Integration involves placing the laundered proceeds back into the economy, e.g., through the proceeds from a surrendered policy.
    • Appointment of a Compliance Officer
    • Customer Due Diligence (CDD)
    • Enhanced Due Diligence (EDD)
    • Internal Controls and Systems
    • Training and Maintaining a Register of attendees
    • Ongoing Monitoring/Auditing
    • Record Keeping
    • Submission of Quarterly reports due by the 15th after every Quarter ends

    Customer Due Diligence (CDD)

    • Identification of customers and verification of their identity
    • Identifying beneficial owners who are not the customer and documenting them properly
    • Understanding the nature of the economic activity that gave rise to the need for insurance
    • Assessing product characteristics to ensure low risk of money laundering
    • Having a process to escalate CDD if there are concerns

    Standard Due Diligence Procedures

    • Completing a Know Your Client Form (Client Verification Form)
    • Obtaining Identification Documents
    • Obtaining Proof of Address

    Identification Procedures

    • Photocopying both sides of an ID card/driver’s licence or the bio-data page of a passport
    • Ensuring documents are valid and photocopied clearly
    • Stamping/verifying documents and certifying them with a legible name

    Proof of Address (POA)

    • Submitting a POA within a 6-month period with a clearly visible date
    • Using an internal letter as alternative proof of address if necessary
    • Ensuring POA is stamped/verified by the receiving officer

    Power of Attorney (POA)/Beneficiary

    • Following the same procedures as ID and Proof of Address
    • Ensuring POA gives authority to sign and execute contracts
    • Updating POA issued overseas at the Registry before acceptance

    Enhanced Due Diligence (EDD)

    • Applying to Politically Exposed Persons (PEPs), non-resident customers, money and wire transfer services, and cash-intensive businesses
    • Conducting EDD measures if Standard CDD inquiry leads to high-risk determination

    Enhanced Due Diligence Process

    • Obtaining details of the source and origin of funds or recent financial statements
    • Obtaining details of relationships between signatories and beneficial owners of insured property
    • Approving transactions with PEPs by senior Management
    • Informing the Compliance Officer of new PEPs

    Politically Exposed Persons (PEPs)

    • A PEP is an individual who holds or has held a prominent public function, including family members or close associates
    • PEPs include Heads of State, Senior Politicians, Judicial or Military Officials, and Senior Executives of State-Owned Corporations

    Sanctions under AML Act No. 13 of 2009

    • Sanctions can be imposed by the Bank of Guyana (BOG)
    • Sanctions include administrative penalties, written warnings, and other measures

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    Description

    This quiz covers the concepts of placement, layering, and integration in the context of money laundering and financial crimes.

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