Financial Crime Prevention Flashcards

What is the purpose of a firm's AML risk assessment?

Answer: To identify and assess the money laundering and terrorist financing risks facing the firm

Under the MLR 2017, firms must carry out a risk assessment to identify and assess the risks of money laundering and terrorist financing they face. This risk assessment must inform the firm's AML policies, controls, and procedures.

What are 'beneficial owners' in AML regulations?

Answer: The natural persons who ultimately own or control a customer or on whose behalf a transaction is conducted

Beneficial owners are the natural persons who ultimately own or control a legal entity (typically owning more than 25% of shares or voting rights) or on whose behalf a transaction or activity is being conducted.

What is the UK's People with Significant Control (PSC) Register?

Answer: A public register requiring UK companies to declare individuals who have significant control over them

The PSC Register requires UK companies to identify and record individuals who have significant control over the company (e.g., holding more than 25% of shares). This information is held at Companies House and is publicly accessible.

What is 'trade-based money laundering'?

Answer: Using international trade transactions to disguise criminal proceeds through methods like over/under-invoicing

Trade-based money laundering involves the exploitation of international trade transactions to transfer value and disguise criminal proceeds, using techniques such as over-invoicing, under-invoicing, multiple invoicing, or falsely describing goods.

What is the 'all-crimes' approach to money laundering in the UK?

Answer: Any crime that produces proceeds can constitute a predicate offence for money laundering

The UK takes an 'all-crimes' approach to money laundering, meaning that the proceeds of any criminal conduct can constitute criminal property. There is no minimum threshold and no list of specific predicate offences.

What is the role of the Office for Professional Body Anti-Money Laundering Supervision (OPBAS)?

Answer: To oversee and ensure consistency of AML supervision by professional body supervisors

OPBAS, housed within the FCA, was established to oversee the professional body AML supervisors (such as those for accountants and lawyers) to ensure they provide consistently high standards of AML supervision.