SCA AML/CFT in Capital Markets 2

Question 1

Who is a 'Politically Exposed Person' (PEP) in AML regulations?

Accepted Answer

A person who is or has been entrusted with a prominent public function (e.g., head of state, senior official, judge) and their close family/associates

Answer

A PEP is an individual entrusted with a prominent public function — senior politicians, judges, military officials, senior executives of state-owned enterprises — and their immediate family members and close associates. They present higher ML risk due to their positions.

Question 2

What is the UAE's Financial Intelligence Unit (FIU)?

Accepted Answer

The UAE's central body (within the Central Bank) that receives, analyzes, and disseminates financial intelligence reports including STRs from reporting entities

Answer

The UAE FIU (now called the Anti-Money Laundering and Suspicious Cases Unit - AMLSCU) is housed within the UAE Central Bank. It receives Suspicious Transaction Reports (STRs) from all reporting entities, analyzes them, and shares intelligence with law enforcement.

Question 3

What is 'tipping off' in AML compliance?

Accepted Answer

Disclosing to a client or third party that a suspicious transaction report has been filed or that they are under investigation, which is a criminal offense

Answer

Tipping off means warning a person who is the subject of an STR or money laundering investigation that they have been reported or are under investigation. This is a serious criminal offense as it allows the suspect to destroy evidence or flee.

Question 4

What is 'layering' in the money laundering process?

Accepted Answer

The stage where complex transactions are used to disguise the illegal origin of funds by moving them through multiple accounts, jurisdictions, and instruments

Answer

Layering is the second stage of money laundering, where the criminal conducts multiple complex transactions — wire transfers, currency conversions, shell company transfers — to create a complex audit trail that obscures the money's illegal origin.

Question 5

What does the UAE's National AML/CFT Committee oversee?

Accepted Answer

The national AML/CFT strategy, coordination between UAE authorities, and implementation of FATF recommendations across the UAE

Answer

The UAE National AML/CFT Committee (NAMLCFTC) coordinates AML/CFT policy across all UAE regulatory bodies and ensures implementation of international standards, particularly the Financial Action Task Force (FATF) recommendations.

SCA Practice Test

SCA Practice Test

SCA AML/CFT in Capital Markets 2