Anti-Money Laundering and Financial Crime Flashcards
7 cards from real CISI IOI practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Anti-Money Laundering and Financial Crime flashcards as text
What are the three stages of the money laundering process in the correct order?
Answer: Placement, Layering, Integration
The three stages are Placement (introducing illegal funds into the financial system), Layering (disguising the trail through complex transactions), and Integration (making funds appear legitimate).
Which UK legislation is the primary statute used to prosecute money laundering offences?
Answer: Proceeds of Crime Act 2002
The Proceeds of Crime Act 2002 (POCA) defines the principal money laundering offences and grants law enforcement powers to recover criminal assets.
What is a Suspicious Activity Report (SAR)?
Answer: A disclosure made to the National Crime Agency regarding suspected money laundering or terrorist financing
A SAR is a disclosure made to the National Crime Agency (NCA) when a person knows or suspects that another is engaged in money laundering or terrorist financing.
What is 'tipping off' in the context of anti-money laundering legislation?
Answer: Disclosing to a suspect that a SAR has been filed or that an investigation is underway
Tipping off is a criminal offence under POCA 2002, committed by disclosing to a suspect that a SAR has been filed or an investigation is underway, thereby prejudicing the investigation.
What does Customer Due Diligence (CDD) primarily require a regulated firm to do?
Answer: Verify the identity of customers and understand the nature and purpose of the business relationship
CDD requires firms to verify customer identity, understand the nature and purpose of the business relationship, and conduct ongoing monitoring of transactions and the relationship.
Who within a regulated firm is responsible for receiving internal suspicion reports and deciding whether to submit a SAR to the NCA?
Answer: The Money Laundering Reporting Officer (MLRO)
The Money Laundering Reporting Officer (MLRO) is a mandatory senior management function in regulated firms, responsible for receiving internal disclosures and deciding whether to submit SARs to the NCA.
What is 'layering' in the context of money laundering?
Answer: Conducting a series of complex financial transactions to obscure the origin of funds
Layering is the second stage of money laundering, involving complex transactions designed to create a confusing audit trail and conceal the criminal source of the funds.
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