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

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).

Question 2

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

Accepted Answer

Proceeds of Crime Act 2002

Answer

The Proceeds of Crime Act 2002 (POCA) defines the principal money laundering offences and grants law enforcement powers to recover criminal assets.

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 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.

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

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.

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

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.

CISI Introduction to Investment Practice Test

CISI Introduction to Investment Practice Test

CISI IoI Anti-Money Laundering and Financial Crime