CISI IoI Anti-Money Laundering and Financial Crime

Question 1

What are the three stages of the money laundering process in the correct order?

Accepted Answer

Placement, Layering, Integration

Answer

Integration, Placement, Layering

Answer

Layering, Placement, Integration

Answer

Placement, Integration, Layering

Question 2

Which UK legislation is the primary statute used to prosecute money laundering offences?

Accepted Answer

Proceeds of Crime Act 2002

Answer

Financial Services and Markets Act 2000

Answer

Money Laundering Regulations 2017

Answer

Terrorism Act 2000

Question 3

What is a Suspicious Activity Report (SAR)?

Accepted Answer

A disclosure made to the National Crime Agency regarding suspected money laundering or terrorist financing

Answer

A report filed with HMRC about suspected tax evasion

Answer

A regulatory report submitted to the FCA about suspicious market trading

Answer

An internal compliance report about elevated client risk levels

Question 4

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

Accepted Answer

Disclosing to a suspect that a SAR has been filed or that an investigation is underway

Answer

Providing anonymous information to law enforcement about money laundering activity

Answer

Alerting clients to upcoming changes in AML regulations

Answer

Notifying the FCA about a colleague's suspicious behaviour

Question 5

What does Customer Due Diligence (CDD) primarily require a regulated firm to do?

Accepted Answer

Verify the identity of customers and understand the nature and purpose of the business relationship

Answer

Assess the creditworthiness of a client for lending purposes

Answer

Monitor client portfolios for underperformance against benchmarks

Answer

Ensure clients have read and understood all product disclosure documents

Question 6

Who within a regulated firm is responsible for receiving internal suspicion reports and deciding whether to submit a SAR to the NCA?

Accepted Answer

The Money Laundering Reporting Officer (MLRO)

Answer

The Chief Executive Officer

Answer

The Chief Risk Officer

Answer

The Head of Internal Audit

Question 7

What is 'layering' in the context of money laundering?

Accepted Answer

Conducting a series of complex financial transactions to obscure the origin of funds

Answer

Placing criminal proceeds into the banking system for the first time

Answer

Investing criminal proceeds into legitimate businesses to appear lawful

Answer

Opening multiple bank accounts to deposit cash in small amounts