CISI IoI Anti-Money Laundering and Financial Crime 3

Question 1

How does terrorist financing fundamentally differ from money laundering?

Accepted Answer

Terrorist financing may use legitimately sourced funds directed towards illegal purposes, whereas money laundering conceals criminally derived funds

Answer

Terrorist financing always involves much larger sums than typical money laundering schemes

Answer

Terrorist financing is regulated exclusively by the Terrorism Act 2000 and not by AML legislation

Answer

Terrorist financing exclusively involves cross-border foreign currency transactions

Question 2

What is the Financial Action Task Force (FATF)?

Accepted Answer

An intergovernmental body that develops and promotes international standards to combat money laundering and terrorist financing

Answer

An FCA internal taskforce dedicated to combating financial crime in the UK

Answer

A UK government department within HM Treasury responsible for domestic AML policy

Answer

The European Union's financial intelligence and AML supervisory agency

Question 3

What is an Unexplained Wealth Order (UWO) and who can apply for one?

Accepted Answer

A civil investigation order requiring a person to explain assets apparently disproportionate to their known income, applied for by law enforcement

Answer

A court order automatically freezing a suspect's assets when a SAR is filed with the NCA

Answer

An HMRC notice compelling disclosure of undeclared offshore assets held by UK taxpayers

Answer

A regulatory requirement imposed by the FCA on high-net-worth clients to document their source of wealth

Question 4

What is the 'integration' stage of the money laundering process?

Accepted Answer

The stage at which laundered funds re-enter the legitimate economy and appear to be lawfully obtained

Answer

The initial act of depositing criminal cash into a bank account or financial institution

Answer

Conducting a series of transactions to disguise the audit trail linking funds to their criminal origin

Answer

Combining funds from multiple criminal enterprises into a single pooled account

Question 5

Which of the following best describes how a 'shell company' is used in money laundering?

Accepted Answer

A legal entity with no real business operations used to create anonymity and conceal the beneficial ownership of funds

Answer

A company operating primarily in the oil and gas extraction sector with complex royalty structures

Answer

A company in the process of being wound up by court-appointed liquidators following insolvency

Answer

A legitimate holding company that owns controlling stakes in multiple trading subsidiaries

Question 6

Under the UK AML supervisory framework, which authority is primarily responsible for supervising AML compliance at banks and major investment firms?

Accepted Answer

The Financial Conduct Authority (FCA)

Answer

The National Crime Agency (NCA)

Answer

HM Revenue & Customs (HMRC)

Answer

The Serious Fraud Office (SFO)

Question 7

What is the 'consent regime' under the Proceeds of Crime Act 2002?

Accepted Answer

A mechanism allowing a firm to proceed with a transaction after reporting suspicions to the NCA and receiving a consent decision

Answer

A process by which firms obtain explicit client consent before sharing personal data with law enforcement agencies

Answer

The obligation to obtain client consent before a firm files an internal suspicion report with its MLRO

Answer

An agreement between the FCA and NCA governing the circumstances in which SAR data may be shared