Money Laundering Flashcards
(53 cards)
1
Q
What are the three stages of money laundering ? P165
A
- Placement
- Layering
- Intergration
2
Q
What is the placement stage of money laundering ? P165
A
- Moving - legitimate financial system
- paying into bank account , offshore account
- most likely caught
3
Q
What is the layering stage of money laundering ? p165
A
- Complex web transactions creation
- move around financial systems - layering transactions
- obscure audit trail - conceal original source
4
Q
What is intergration ? p165
A
- Intergrate- back into legitimate financial system
- property invesment/ other asset
- carefully actioned - plausible explanation
5
Q
What is criminal property ? P165
A
- property obtained knowingly - criminal conduct
- e.g. - money , security, tangible/ intangible property
6
Q
What is terrorist property ? p166
A
- Money or Property use- terrorist purposes
- use - process commissioning/ carrying out act
7
Q
What if an accountant provides service whilst turning ‘a blind eye’ to the client’s suspected dealings ? P166
A
- you - guilty money laundering
- facilitating illegal activity
8
Q
What impact does the value of criminal property have on whether an accountant should report money laundering or not ? P166
A
- No bearing
- No de minimus exception/ lower limits - laundering/ terrorist fnance offences
9
Q
What are the three main anti-money laundering legislations in the UK ? P166
A
- The proceeds of crime act 2002 (POCA)
- The Terrorism Act 2000 (TA)
- The Money Laundering and Terrorist Financing Regulations 2020 (MLR)
10
Q
What does POCA do ? P166
The proceeds of crime act 2002
A
set out:
* principal money laundering offence
* requirement to report - transctions (suspicious)
11
Q
What does TA do ? P166
The terrorism act 2000
A
Sets out:
* principal terrorists financing offences
* reporting obligations
12
Q
What does the MLR do ? P166
The Money Landering and Terrorist Financing Regulations 2020
A
- Sets out:
- detailed reules
- risk based approach - customer due diligence
- new terrorists funding prevention - emoney, prepaid cards
13
Q
What is the national crime agency ? P167
A
- Law enforcement agency
- operations against - organised crime
- e.g. Class A drugs , Money laundering
14
Q
What are the potential penalties for money laundering ? P167
A
- Unlimited fine
- 14 year prison sentence
15
Q
What does POCA and TA require accountants to do ? P167
A
- Report suspicion - client, empoyer, colleague - criminal property involvement
- To NCA - suspicious activity report (SAR)
- Large organisation - Money Laundering Reporting Officer (MLRO)
- MLRO to NCA
16
Q
When must MLRO report money laundering to NCA ? P167
A
- Earliest opportunity
- MLRO consent from NCA - complete transaction
- delay not possible - MLRO inc in report - NCA
17
Q
What is terrorism financing ? P167
A
- Provision/ collection of funds - legitimate/ illegitimate source
- intention / knowledge
- should carry terrorism
- used or not
18
Q
What is the maximum penalty for terrorism financing ? p167
A
- Unlimited fine
- and/or
- 14 years imprisonment
19
Q
What is the first circumstance in which an accountant is required to dislclose money laundering/ terrorist financing in SAR/ internal report ? P168
relating to consent
A
- Wants to provide service
- known/suspected property - money laundering/ terrorism
- person making - in report - indicate consent request
- no consent = no service
20
Q
What is the second circumstance where the required disclosure in an internal report or SAR must be made ? P168
regarding knowledge of
A
- Actually knows / suspects / reasonable objective grounds to know/ suspect
- wish to act for client = irrelevant
21
Q
What must the suspicious activity report contain ? P168
A
- Suspected person identity
- information forming suspiciojn
- laundered property whereabouts
- report maker details = MLRO / sole practitioner
22
Q
What should an accountant also report to the MLRO and NCA (sole practitioner) , other than money laundering and terrorist financing ? P168
A
- Failure to disclose omission - tax
- failure to disclose an error - tax
- fraud report - police
23
Q
What should be in place to ensure accountants comply with the reporting requirements for reports and SARs , and what will happen if its not? P169
A
- Training and internal procedures
- liable- fine/ imprisonment or both
24
Q
What is protected disclosure ? P169
A
- Report submission - required disclosurre - suspicion of monet laundering
- against breach of confidentiality allegations
25
What should any person, not just an accountant, do if they have or will engage in money laundering ? P169
* Authorised disclosure - appropraite authority
* before act - consent 4 act from NCA
* OR
* soon after - good reason for delay - defence from charges
26
When is the accountant not obliged to report knowledge / suspicion of money laundering ? P169
Info attained:
* not business - e.g. social
* priveleged circumstances - advice/ opinion / service - legal proceedings
* not reported promptly - reasonable excuse - rare - duress / threats
27
When would finding information regarding money laundering through privelged circumstances not protect the accountant ? P169
* Advice - enables criminal offence / to avoid detection
28
What are three money laundering offences committed by individuals or businesses P170
* concealing
* arrangement
* acquisition
29
How is 'concealing' a money laundering offence ? P170
* Hiding / disguising
* nature, source, location , movement, ownership
* e.g. - convert/ transfer criminal property
* e.g. remove from uk
30
How is 'arrangement' a money laundering offence ? P170
* Enter into / concered - arrangement
* know/suspect - facilitates acquisition/ rentention / use / control - criminal property by another person
31
How is 'acquisition' a money laundering offence? 170
* acquire/use/ have possession - criminal property
32
When will a person not committ the money laundering offence ? P170
Authorised disclosure
33
What happens if an accountant fails to disclose money laundering ? P170
* Maximum penalty - 5 years imprisonment and/or fine
* professional accountign body - disciplinary action
34
What is prejudicing a money laundering investigation ? P170
* Person/ accountant - knows/ suspects investigation conduction:
* disclosure - prejudice investigation
* falsifies, conceals, destorys documents - causes this to happen
35
Does the person making the disclosure have to intend to prejudice an investigation, and is there a defence for unintentional disclosure ? P171
* unintential = still offence
* defence available:
* disclosure making - didn't know:
* prejudical disclosure
* documents relevant
* no intention - conceal facts
36
What is the maximum penalty for prejudicing a money laundering investgiation ? P171
* 5 years prison and/or fine
37
What is tipping off ? P171
* Knows/ thinks:
* report - MLRO, NCA, & HMRC
* warns suspect
* legal liability
* no intention required
38
How could an accountant unintentionally tip off a client ? P171
* reporting client - MLRO / NCA - made client aware
39
Is an accountant allowed to advise a client in general terms about money laundering, without tipping them off ? P171
Yes- no offence
40
What is the maximum penalty for tipping off ? P171
* 5 years imprisonment and/or fine
41
What must happen to businesses subject to money laundering regulations ? P172
* Supervisory authority monitoring
* regulations for different business sectors:
* accountants
* financial services
* estate agents
* solicitors
42
Who will accountants subject to money laundering regulations be supervised by ? P172
* Professional accounting body
* if not - register HMRC
* Failure = criminal offence
43
What is due diligence (CDD) ? P172
* evaluating prospective business decisions
* investigating relevant :
* financial
* legal
* other important info - other parties
44
What approach do money laundering regulations require an accountant firm to take to CDD? P172
* Risk based approach
* analyse client's potential exposure - money laundering/ terrorist
* document proces followed - assess risk
* document CDD carried out
45
What are the situations outlined by the money laundering regulation that require the accountant to carry out CDD ? P172
* Business relationship - client
* doing occasional transaction - not business relationship w client
* suspects laundering / terrorism finance
* client identification info doubt
* circumstances of existing client/ client change - previous knowledge inconsistence
* regulation required enhance CDD - circumstances - higher risks laundering / terrorism
46
What must the accountant do to carry out sufficient CDD ? P173
* Detailed look at client- way it operates
47
What should CDD include ? p173
* verification client identity - documents , data, other info
* understanding - beneficial owners indentity 25% - verification checks
* client intention for relationship/ transaction
48
What must the accountant do if they are unable to carry out adequate CDD checks ? P173
* Decline assignment
49
What should the accountant do if they've carried out CDD and have found the client may be involved in money laundering/ terrorism funding ? P173
* Report to money laundering officer
* Suspicious activity report - national crime agency
50
What do money laundering regulations require in relation to records of CDD? p173
* maintained - assist future law enforcement investigations
* demonstration - statutory obligation compilance
51
What should the records of CDD carried out should include ? P173
* Copies/reference CDD evidence - client identity verification - e.g. passport
* copies/ original documents - transactions subject to CDD - invoices
52
How long should copies of CDD client identity evidence be kept ? P173
* 5 years - start date = client and accountant relationship end
53
How long should documents relating to transactions subject to CDD be kept for ? P173
* 5 years - start date = accountant completed client's instructions
