Anti-Money Laundering Flashcards

What is ongoing monitoring in AML?

Answer: Continuously reviewing customer transactions and relationships for suspicious activity

Ongoing monitoring involves continuously reviewing customer transactions and account activity to detect unusual or suspicious patterns that may indicate money laundering.

What is the purpose of sanctions screening?

Answer: To check customers and transactions against lists of sanctioned individuals, entities, and countries

Sanctions screening checks whether customers, beneficial owners, or transactions involve sanctioned persons, entities, or countries designated by international bodies or Singapore authorities.

What are the consequences of non-compliance with AML regulations?

Answer: Criminal penalties, regulatory sanctions, reputational damage, and loss of licence

Non-compliance can result in criminal prosecution, heavy fines, regulatory sanctions (including licence revocation), and severe reputational damage.

What is correspondent banking in the context of AML?

Answer: A banking relationship where one bank provides services on behalf of another bank

Correspondent banking involves one bank (correspondent) providing banking services on behalf of another bank (respondent), which can be exploited for money laundering.

What is the purpose of training staff on AML procedures?

Answer: To ensure staff can identify and report suspicious activities effectively

AML training ensures that all staff understand their obligations, can recognize red flags, and know how to properly report suspicious activities.

What is 'know your customer's customer' (KYCC)?

Answer: Understanding not just the direct customer but also who they are transacting with

KYCC extends due diligence beyond the direct customer to understand who they are dealing with, particularly important for correspondent banking and intermediary relationships.