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APC > AML > Flashcards

AML Flashcards

1
Q

What is money laundering?

A

The concealment of the origins of illegally obtained money.

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2
Q

What are other types of financial crime?

A

Terrorist financing, bribery and fraud.

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3
Q

What is the name of the RICS document?

A

Countering bribery and corruption, money laundering and terrorist financing February 2019

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4
Q

What are the three main money laundering regulations in the UK?

A
  1. The Money Laundering, Terrorist Financing (Amendment) (No2) Regulations 2022. (Replaced 2017 Regs)
  2. The Financial Services and Markets Act 2000 (FSMA)
  3. Proceeds of Crime Act 2002
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5
Q

Who regulates AML in the UK?

A

The Financial Conduct Authority

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6
Q

What is the changes to MLR 2022 from the 2017 regulations?

A

The changes are being made to ensure that the UK continues to meet international standards on AML and counter-terrorist financing while also strengthening and clarifying how the UK’s AML regime operates, following feedback from industry and supervisors.

From 4/23 practices are required to report material discrepancies in beneficial ownership throughout the business relationship and not just when taking on a new client.

Member must report any suspicious activity to NCA.

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7
Q

What is the purpose of The Financial Services and Markets Act 2000?

A

The Act provides the framework within which a single regulator for the financial services industry, the Financial Services Authority (“the Authority”), will operate.

It equips the Authority with a full range of statutory powers and creates the Financial Services and Markets Tribunal (“the Tribunal”). The Act also establishes the framework for single ombudsman and compensation schemes to provide further protection for consumers.

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8
Q

What is the purpose of the Proceeds of Crime Act 2002?

A

Sets out the legislative scheme for the recovery of criminal assets with criminal confiscation being the most commonly used power. Confiscation occurs after a conviction has taken place.

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9
Q

If it was a business - how would you undertake the necessary checks/who would you take them out on?

A

The beneficial owner of the property - would discuss with the appointed officer at this stage.

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10
Q

How can we prevent money laundering?

A
  • Risk based approach (three W’s - who, what and why)
  • Due diligence checks - “know your customer”
  • Staff training and awareness
  • Record keeping and reporting
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11
Q

What does your company have in place in relation to AML?

A

An anti-money laundering policy with an appointed reporting officer.

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12
Q

What is the nominated officer responsible for?

A
  • Receiving reports of suspicious activity
  • Developing and implementing anti-money controls and procedures
  • Training staff
  • Report suspicious activity to NCA (National Crime Agency)
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13
Q

What records must firms retain?

A
  • Evidence of a customers identity must be retained for 5 years after the end of customer relationship
  • Evidence in relation to a customers transactions for 5 years from the date of the transaction
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14
Q

Does your firm accept cash?

A

My firm does not accept cash.

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15
Q

Can a firm accept cash and if so to what limit?

A

If your business operates as a high value dealer you may have to register with HMRC.

A high value dealer considers payments of:-
- a single cash payment of 10,000 euros or more for goods
- several cash payments for a single transaction totalling 10,000 euros or more, including a series of payments and payments on account
- cash payments totalling 10,000 euros or more which appear to have been broken down into smaller amounts so that they come below the high value payment limit

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16
Q

What is a criminal offence that carries severe penalties and implications?

A

‘Tipping off’ - letting the money launderer know they are under suspicion.

Unlimited fine and up to 5 years in prison

17
Q

Who’s is your firms supervisory authority?

A

HMRC because we are an estate agency business.

18
Q

Explain due diligence to me.

A

Knowing who, what and why in relation to your client.

Generally ask for photo ID, proof of address to make sure they are who they say they are.

Also request a source of funds as a precaution i.e. a bank statement. UK bank = ok. If the cash was coming from different sources such as private banking - may require further investigation.

19
Q

What is the difference between tipping off and whistle blowing?

A

Tipping off - letting the person know they are under suspicion

Whistleblowing - raising concerns internally to be investigated further.

20
Q

What is the legislation relating to sanctions?

A

Sanctions and Anti-Money laundering Act 2018

21
Q

How is the RICS guidance structured?

A
  1. Mandatory requirements
  2. Good practice guidance
  3. Supplementary guidance on parts 1 and 2
22
Q

What does the PS state firms must do in relation to Bribery and corruption?

A
  • not offer or accept, directly or indirectly, anything that could constitute a bribe
  • have appropriate plans in place
  • report any activity they are aware of that breaches anti-bribery
  • act with due diligence
23
Q

What does PS state members must do in relation to bribery and corruption?

A
  • not offer or accept anything that could constitute a bribe
  • have adequate knowledge
  • report any suspicious activity
24
Q

In terms of money laundering what must firms do in relation?

A
  • not facilitate or be complicit in money laundering
  • have systems and training in place
  • report suspicious activity
  • verify the identity of their client
  • record and retain information
25
Q

In terms of money laundering what must members do in relation?

A
  • not facilitate or be complicit in money laundering
  • report suspicious activity
26
Q

Different types of due diligence?

A

Customer due diligence - hold identification for the transacting party/ parties and verify the information is correct

Standard - appropriate where it is low risk and only basic verification of identity is needed

Enhanced - appropriate where high risk - continual monitoring

27
Q

When is MLR 2022 effective from?

A

March 2022

28
Q

What does MLR (EU Exit) 2020 state?

A

All letting agents must undertake customer due diligence on both LL and T for any agency agreement with a monthly rent of 10,000 Euros or more.

29
Q

What are the penalties for failure to comply with MLR?

A

Imprisonment (up to 14 years) and an unlimited fine.

30
Q

What is a material discrepancy?

A

A discrepancy which may be reasonably considered to be linked to money laundering or terrorist financing.

31
Q

What is the RICS PS for money laundering?

A

Countering bribery and corruption, money laundering and terrorist financing February 2019 (wef September 2019)

32
Q

What are PEP’s?

A

Politically exposed persons.

High risk as they hold positions of influence. If someone is a PEP than enhanced due diligence should be done.

APC (16 decks)

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