CMFAS Anti-Money Laundering 1 — Questions and Answers
Question 1: What is money laundering?
- Washing money in a machine
- The process of making illegally obtained money appear legitimate (Correct answer)
- Depositing money in a bank
- Converting currency at an exchange
Correct answer: The process of making illegally obtained money appear legitimate
Money laundering is the process of disguising the origins of illegally obtained money to make it appear as though it came from legitimate sources.
Question 2: What are the three stages of money laundering?
- Deposit, transfer, withdrawal
- Placement, layering, integration (Correct answer)
- Collection, distribution, investment
- Earning, saving, spending
Correct answer: Placement, layering, integration
The three stages are: Placement (introducing illegal funds into the financial system), Layering (concealing the trail through complex transactions), and Integration (re-entering the funds into the legitimate economy).
Question 3: What is the purpose of the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (CDSA)?
- To promote drug use
- To provide the legal framework for confiscating proceeds of crime and criminalising money laundering (Correct answer)
- To regulate banking operations
- To manage government finances
Correct answer: To provide the legal framework for confiscating proceeds of crime and criminalising money laundering
The CDSA is Singapore's primary anti-money laundering legislation, criminalising money laundering and providing for the confiscation of benefits from criminal conduct.
Question 4: What is Customer Due Diligence (CDD)?
- A customer satisfaction survey
- The process of verifying a customer's identity and assessing the risk they pose (Correct answer)
- A credit check
- A marketing strategy
Correct answer: The process of verifying a customer's identity and assessing the risk they pose
CDD involves identifying and verifying the customer's identity, understanding the nature of their business, and assessing the money laundering risk they may pose.
Question 5: What is a Suspicious Transaction Report (STR)?
- A credit report
- A report filed with authorities when a transaction is suspected to involve proceeds of crime (Correct answer)
- A monthly bank statement
- A tax return
Correct answer: A report filed with authorities when a transaction is suspected to involve proceeds of crime
An STR is a report filed with the Suspicious Transaction Reporting Office (STRO) when a financial institution suspects a transaction may involve money laundering or terrorism financing.
Question 6: Who is responsible for filing STRs in Singapore?
- The police only
- Financial institutions and designated non-financial businesses and professions (Correct answer)
- Only banks
- Individual citizens only
Correct answer: Financial institutions and designated non-financial businesses and professions
Financial institutions and designated non-financial businesses and professions (DNFBPs) are legally required to file STRs when they have suspicions about transactions.
CMFAS Anti-Money Laundering 1
What is money laundering?