Additional Questions 5 Flashcards
What is an international business company (IBC)?
IBCs are entities formed outside a person’s or business’s country of residence, typically in offshore jurisdictions, for confidentially or asset protection purposes. IBCs permit the person to reduce transparency between the owner in her home country and the offshore entity where the company is registered.
Describe Know Your Customer (KYC).
KYC refers to
anti-money laundering policies and procedures
used to determine the true identity of a customer and the type of activity that is normal and expected, and
to detect activity that is unusual for a particular customer.
Many experts believe that a sound KYC program is one of the best tools in an effective AML/CFT program.
What is a mutual legal assistance treaty (MLAT)?
When evidence is required from another jurisdiction, a request can be made for mutual legal assistance.
MLATs provide a legal basis for transmitting evidence that can be used for prosecution and judicial proceedings.
MLATs only involve two countries at a time.
What is meant by the “physical cross-border transportation of currency”?
Any in- or outbound transportation
Of currency or bearer instruments
From country to country
Physical
By natural person
Or in luggage or vehicle
Shipment via cargo containers
Or mailing
What is a red flag in the context of financial crime?
A warning signal that should bring the attention of a financial organization to a potentially suspicious transaction or activity.
What are remittance services?
Remittance services are also referred to as giro houses or casas de cambio.
They are businesses that receive cash or other funds that they transfer through the banking system to another account.
The account is held by an associated company in a foreign jurisdiction, where the money is made available to the ultimate recipient.
What is a safe harbor for reporting suspicious activity?
Safe harbor is legal protection
for financial organizations, their directors, officers, and employees
from criminal and civil liability
for breach of any restriction on disclosing information
imposed by contract or by any legislative, regulatory, or administrative prohibition,
if they report their suspicions in good faith to the financial intelligence unit,
even if they did not know precisely what the underlying criminal activity was, and regardless of whether illegal activity actually occurred.
What is smurfing?
A commonly used money laundering method, involving the use of multiple individuals and/or multiple transactions for making cash deposits, buying monetary instruments or bank drafts in amounts under the reporting threshold.
What is a tax haven?
Countries that offer special tax incentives or tax avoidance to foreign investors and depositors.
What is tipping off?
The improper or illegal act of notifying a suspect that he is the subject of a suspicious activity report (SAR) or is otherwise being investigated or pursued by the authorities.
What is a trustee?
A trustee may be a paid professional or company or unpaid person who holds the assets in a trust fund separate from the trustee’s own assets. The trustee invests and disposes of the assets in accordance with the settlor’s trust deed, taking into consideration any letter of wishes.
What is willful blindness?
A legal principle that operates in money laundering cases and is defined by courts as the “deliberate avoidance of knowledge of the facts” or “purposeful indifference.”
Courts have held that willful blindness is the equivalent of actual knowledge of the illegal source of funds or of the intentions of a customer in a money laundering transaction.
