CII R01 Financial Crime Prevention

Question 1

What is the primary UK legislation for preventing money laundering?

Accepted Answer

Proceeds of Crime Act 2002 and Money Laundering Regulations 2017

Answer

Financial Services Act 2012

Answer

Companies Act 2006

Answer

Consumer Credit Act 1974

Question 2

What are the three stages of money laundering?

Accepted Answer

Placement, layering, integration

Answer

Collection, distribution, investment

Answer

Deposit, transfer, withdrawal

Answer

Acquisition, conversion, disposal

Question 3

What is Customer Due Diligence (CDD)?

Accepted Answer

The process of identifying and verifying customers' identities and understanding the nature of their business

Answer

A courtesy check on customer satisfaction

Answer

A credit check performed before lending

Answer

An annual review of customer account balances

Question 4

When is Enhanced Due Diligence (EDD) required?

Accepted Answer

When there is a higher risk of money laundering, such as with politically exposed persons or complex transactions

Answer

For all new customers

Answer

Only for customers with deposits over £1 million

Answer

Only for business customers

Question 5

What is a Suspicious Activity Report (SAR)?

Accepted Answer

A report made to the National Crime Agency when there is knowledge or suspicion of money laundering

Answer

An internal performance review

Answer

A report to the FCA about market movements

Answer

A customer complaint report

Question 6

What is 'tipping off' in the context of anti-money laundering?

Accepted Answer

Informing a person that a SAR has been made or that an investigation is being carried out, which is a criminal offence

Answer

Providing financial tips to customers

Answer

Reporting suspicious activity to the police

Answer

Sharing market tips with colleagues