Real Time Case Scenario of Due Diligence in Anti Money...Read More
1.What Is Money Laundering, Exactly?
Money laundering is the practise of criminals attempting to make criminal proceeds appear lawful by concealing their criminal origins. Three procedures are used to do this:
Placement is the process of putting the proceeds of crime where they belong.
Layering - Using 'layers' of transactions to conceal the proceeds of illicit activity.
Integration - Constructing a plausible justification for the proceeds
2. Who Is Responsible For Anti-Money Laundering Checks?
Solicitors, accountants, tax advisors, insolvency practitioners, financial institutions, credit institutions, estate agents, chartered surveyors, trust/service providers, gaming companies, and high-value dealers with a potential business relationship worth more than 15,000 Euros, such as automobile dealers and jewellers.
3.Why Do Anti-Money Laundering Checks Need to Be Done?
The Proceeds of Crime Act, the Serious Organized Crime and Police Act, the Terrorist Act, and the Money Laundering Rules are the four acts that control anti-money laundering regulations. Failure to disclose suspicious conduct might result in a criminal charge as well as hefty fines from the appropriate regulatory agency.
4. I've been dealing with my clients for a long time; do I still need to conduct customer due diligence?
You must keep CDD current for all of your clients. You may have appropriate documented ID facts on your files, but if their circumstances or risk profile have changed since then, you should update your CDD. It's true. It is recommended that clients' CDD be reviewed on a regular basis.
5. Who Is In Charge Of Enforcing Anti-Money Laundering Laws?
A variety of regulatory entities police the AML legislation. The JMLSG (Joint Money Laundering Steering Group) establishes guidelines that are enforced by the FCA/PRA (Financial Conduct Authority/ Prudential Regulation Authority), the SRA (Solicitors Regulation Authority in England), the OFT (Office of Fair Trading), HMRC (HM Revenue & Customs), ICAEW (Institute of Chartered Accountants in England & Wales, plus other Accountancy bodies), RICS (Royal Institute of
6. What Is Electronic Verification and How Does It Work?
It is critical to authenticate individuals doing financial transactions in order to prevent fraud and money laundering. Documentary proof was previously used to prove a person's identity. These aren't always available, and they're easily fabricated or altered.
As a result, computerised verification adds security and lowers the danger of money laundering and fraud.
Electronic verification eliminates the need for the customer to be there, saving time and assisting in the development of customer relationships. Money laundering risk is lessened since several data sources are used to authenticate the consumer rather than relying just on documentation evidence.
7. Why do I need to check anything else if I collect passports and driver's licences?
EV may verify a broader range of data, giving you a better understanding of your customer (KYC – Know Your Customer). It can also be used to examine other data sets such as PEPS and Sanctions lists, as recommended and required by the 3rd European Money Laundering Directive.
With the prevalence of forged documents on the rise, efforts to identify them must be refocused. Electronic verification is intended to eliminate the possibility of receiving possibly counterfeit documents, allowing you to have greater trust in their authenticity. Various checks are performed on the documents in order to confirm as much as possible, hence lowering the risk of fraud.
8. Online Systems Are Expensive; What If I Can't Afford Them?
Taking paper papers comes with a lot of hidden fees that aren't always obvious. When working with a client over the phone, for example, sending vital documents through recorded delivery to ensure they don't get lost comes at a cost that is often more than the cost of an electronic search. If the documents are lost, the cost of replacing them for your potential client will be incurred. This may be a more time-consuming operation, but by conducting a short electronic search, may more searches be conducted, resulting in an increase in the number of clients onboarded?
9: Why Are You Allowing Me To View Private Data?
The information in electronic systems has been given permission to be used in these systems. The Full Electoral Roll can be used for an AML check, and this is covered by the Representation of the People Act (2002). When a Credit Reference Agency (CRA) uses financial records to conduct an AML check, it does not reveal any financial information other than what is required to identify someone.
10: What Are Politically Exposed Persons (PEPs), Specially Designated Nationals (SDNs), and Financial Sanctions, and Why Do I Need To Check Them?
The 3rd European Money Laundering Directive recommends establishing a mechanism for checking PEPs, SDNs, and HMT Financial Sanctions. A PEP is a Politically Exposed Person, or someone associated with someone who holds a prominent public position. A Specially Designated National (SDN) is someone who is on a list of people who are not allowed to do business with US citizens. Individuals with whom it is illegal to transmit or make monies available are listed on the HM Treasury Financial Sanctions list.
11. What Is The Difference Between Money Laundering And Financial Terrorism?
Money laundering is the process of converting illegally obtained funds into funds that appear to have come from a legitimate source. Money laundering is used by money launderers all over the world to hide illicit behaviour such as drug/arms trafficking, terrorism, and extortion.
Financial terrorism is defined as financial support for acts of terrorism in any form or for those who encourage, plan, or carry out acts of terrorism.
Money launderers transport illegal monies through legal means to hide their criminal origins, whereas those who finance terrorists transfer cash that may be legal or unlawful in origin in order to hide their source and ultimate use, which is to support Financial Terrorism.
12.What Is Kyc, and What Does It Mean?
KYC stands for "Know Your Customer," a word that refers to the process of identifying a customer. It entails making reasonable efforts to determine the genuine identity and beneficial ownership of accounts, the source of funds, the nature of the customer's business, the rationality of account activities in connection to the customer's business, and other factors that aid banks in risk management.
The goal of the KYC guidelines is to prevent banks from being used for money laundering by criminal elements, whether purposefully or unintentionally.
13.What Is Kyc Policy, and What Does It Mean?
All banks are expected to create a KYC Policy with the consent of their respective boards, according to RBI instructions released via their circular of November 29, 2004. The KYC Policy is made up of the following components:
Customer Acceptance Policy
Customer Identification Procedures
Monitoring of Transactions
14. What Exactly Is A Customer?
A "client" may be defined as follows for the purposes of KYC policy:
A person or entity with whom the bank keeps an account and/or has a business connection;
The beneficial owner is the person on whose behalf the account is managed.
Beneficiaries of transactions facilitated by professional intermediaries such as Stock Brokers, Chartered Accountants, Solicitors, and others as permitted by law
Any person or entity involved in a financial transaction that potentially expose the bank to severe reputational or other risks, such as a wire transfer or a single high-value demand draught issue.
15. What Is A Customer Acceptance Policy, And What Does It Mean?
The general standards followed by banks when enabling customers to open accounts with them are referred to as the Customer Acceptance Policy. In general, the standards state that no accounts should be formed in false or anonymous names, or where the customer's identification matches that of a person with a criminal record or a banned company. Similarly, accounts should not be opened if the bank is unable to verify the identity of the customer and/or receive the necessary documentation in accordance with the bank's policies.
16. What Is The Procedure For Customer Identification?
Customer identification is the process of identifying and verifying a customer's identity using credible and independent papers, data, and information. Banks would have to show the competent authorities that due diligence was followed in their operations. in compliance with existing legal and regulatory requirements
17. When Does Kyc Make an Application?
KYC will be conducted for the following purposes, but not limited to:
Make a new account.
Opening a second account where current KYC documents were not presented when the first account was opened.
Opening a locker facility where these documents are not available for all locker facility users at the bank.
When the bank believes that extra information from existing clients is required based on the account's performance.
In accordance with RBI directions, at regular intervals.
When signatures, mandate holders, beneficial owners, and other details change.
18. What Do Aml/cft Supervisors Want to See
The AML/CFT supervisors are looking to see if the reporting entity has a risk assessment that is acceptable and reasonable, as well as an AML/CFT programme that reflects and controls those risks. AML/CFT supervisors use a risk-based approach to supervision, choosing from a variety of supervision and enforcement methods. The nature of the business and the risks that each reporting entity manages will be taken into account during supervision. For more details on the Reserve Bank's approach to AML/CFT oversight, read our Bulletin article or speech.
19. What Is Peps?
Individuals who are "politically exposed" (PEPs) are those who are vulnerable to corruption because of their position in public life. This idea is currently limited to overseas PEPs in New Zealand law, and does not include domestic (New Zealand-based) PEPs. The dangers associated with PEPs must be taken into account by reporting bodies, and they should:
get senior management approval for establishing or maintaining commercial connections with PEPs; take reasonable measures to ascertain the source of wealth and source of funding of PEPs; and conduct improved, continuing monitoring of the business relationship
20.What Is Ongoing Customer Due Diligence?
Ongoing Client Due Diligence entails analysing customer information on a regular basis and having procedures in place to monitor accounts. All clients, including previous ones, are compelled to do so.
Real Time Case Scenario of Due Diligence in Anti Money...Read More
Real Time Case Scenario of Transaction Monitoring in Anti Money...Read More
To request a quote or want to meet up for a course discussion, contact us directly or fill out the form and we will get back to you promptly.