CII R01 Financial Crime Prevention 3 — Questions and Answers
Question 1: What is the Sanctions and Anti-Money Laundering Act 2018?
- An EU regulation that no longer applies to the UK
- UK legislation providing the framework for financial sanctions and AML measures post-Brexit (Correct answer)
- A voluntary industry code of practice
- An act that only applies to banks
Correct answer: UK legislation providing the framework for financial sanctions and AML measures post-Brexit
The Sanctions and Anti-Money Laundering Act 2018 provides the UK with its own domestic framework for implementing financial sanctions and anti-money laundering measures following Brexit.
Question 2: What is the role of the Joint Money Laundering Steering Group (JMLSG)?
- To prosecute money launderers
- To produce industry guidance on anti-money laundering and counter-terrorist financing for the UK financial sector (Correct answer)
- To set interest rates for banks
- To manage the FSCS
Correct answer: To produce industry guidance on anti-money laundering and counter-terrorist financing for the UK financial sector
The JMLSG produces practical guidance for firms in the UK financial sector on how to comply with their AML and CTF obligations. Its guidance is approved by HM Treasury.
Question 3: What is 'terrorist financing' and how does it differ from money laundering?
- They are the same thing
- Terrorist financing involves providing funds for terrorism regardless of whether the funds are legitimate, while money laundering involves disguising criminal proceeds (Correct answer)
- Terrorist financing only involves large amounts
- Terrorist financing is not a criminal offence in the UK
Correct answer: Terrorist financing involves providing funds for terrorism regardless of whether the funds are legitimate, while money laundering involves disguising criminal proceeds
While money laundering involves disguising the proceeds of crime, terrorist financing involves providing or collecting funds for terrorist purposes. Crucially, terrorist financing can involve legitimate funds, making it distinct from money laundering.
Question 4: What is a 'consent SAR' (also known as a Defence Against Money Laundering or DAML)?
- A SAR submitted with the customer's consent
- A SAR requesting consent from the NCA to proceed with a transaction that the reporter suspects involves criminal property (Correct answer)
- A SAR that gives consent for the NCA to investigate
- A voluntary SAR submitted for record-keeping purposes
Correct answer: A SAR requesting consent from the NCA to proceed with a transaction that the reporter suspects involves criminal property
A consent SAR (DAML) is submitted when a person suspects a transaction involves criminal property and seeks consent from the NCA to proceed with it. The NCA must respond within a specified timeframe.
Question 5: What is the 'moratorium period' when a consent SAR is submitted?
- There is no time limit
- The NCA has 7 working days to refuse consent, followed by a further 31 calendar days moratorium if refused (Correct answer)
- The NCA has 30 days to respond
- The firm must wait 90 days before proceeding
Correct answer: The NCA has 7 working days to refuse consent, followed by a further 31 calendar days moratorium if refused
When a consent SAR is submitted, the NCA has 7 working days to refuse consent. If refused, there is a further 31 calendar day moratorium period during which the NCA can apply to the court for a restraining order.
Question 6: What is 'wilful blindness' in the context of financial crime?
- A visual impairment that prevents checking documents
- Deliberately avoiding knowledge of facts that would indicate criminal activity (Correct answer)
- Not being aware of AML regulations
- Failing an eye test required for compliance roles
Correct answer: Deliberately avoiding knowledge of facts that would indicate criminal activity
Wilful blindness occurs when a person deliberately avoids acquiring knowledge of suspicious facts. Courts may treat wilful blindness as equivalent to actual knowledge of money laundering, potentially leading to criminal liability.
CII R01 Financial Crime Prevention 3
What is the Sanctions and Anti-Money Laundering Act 2018?