Kucowy kwiz

How many AML directives EU has implemented?

• 5

• 3

• 1

• 7

What was the purpose of the implementation of the second AML directive by EU?

• to bring the EU’s anti-money laundering framework

  in line with the Financial Action Task Force (FATF) recommendations of the time.

• to introduce requirements for credit and

  financial institutions to verify the identity of their customers and report any suspicions of money laundering.

• to cover

  certain non-financial businesses and professions such as legal services and accountancy.

• to introduce the risk-based approach (RBA) to customer due diligence (CDD), and the concept of

  simplified due diligence (SDD) and enhanced due diligence (EDD).

Customer Due Diligence is the

appropriate framework that organisations must establish in order to safeguard their operations from ML misuse. In order to comply with it, the entity is obliged to:

• Identify the customer and verify customer’s identity using reliable, independent source

  documents, data or information.

• Identify the beneficial owner, and take reasonable measures to verify the identity of the beneficial

  owner such that the financial institution is satisfied that it knows who the beneficial owner is.

• For legal

  persons and arrangements financial institutions should take reasonable measures to

  understand the ownership and control structure of the customer.

• Having written policies on the treatment of privileged employees

  as well as defining what is considered privileged, including examples of such employees;

Which are the three main categories how Ultimate Beneficial Owners can perform control over the legal entity:

• Having minimum threshold or majority of the economic rights over the legal entity;

• Having minimum of the threshold or majority of the voting rights over the legal entity;

• Having control over the legal entity via other means, e.g such as an individual is on the Senior

  Executive Board or has the majority of the shares within family ownership.

• being establish as a legal representative of the entity.

Which of the following mitigating criteria an entity has to meet, in order for the financial institution to apply Simplified Due Diligence:

• being listed on a well-known stock exchange,

• being regulated by an authority originating in a low risk country,

• present some negligible risk (e.g. negative media pertaining to issues

  outside of ML/TF scope of interest or transactional activity connected to a high risk jurisdiction;

• Presence of bearer shares in the ownership structure,

Enhanced Due Diligence is conduced if:

• there is involvement of sanctioned parties/countries in the relationship.

• there is relevant adverse media,

• there is large account balance with frequent cross border transactions.

• there is presence of bearer shares in the ownership structure.

Customers assigned with CDD level of scrutiny undergo the FI’s standard procedure in terms of

identification and verification and are commonly subject to regular reviews anywhere from:

• 1-2 years (depending on the risks involved).

• 3-7 years (depending on the risks involved).

• 2-5 years (depending on the risks involved).

• 1-10 years (depending on the risks involved).

Where EDD is applicable the Financial Institution needs to ensure that adequate controls have been

introduced to mitigate the risks. This, again, requires a tailored approach and depends on the presented

factors. Among the most common measures taken to limit risk we can list:

• Fruit Thursdays for the AML analysts.

• Requiring a better understanding of why specific banking products are used and how it is done,

• More frequent and more detailed analysis of transactional activity,

• Applying relevant business restrictions (e.g. barring a Client from using certain products).

BCBS stands for:

• Basil Convention on Banking Supervision

• Basil Complementary of Banking Superstition

• Basel Committee on Banking Supervision

• Basel Convention on Breach Superstition

FATF stands for:

• Financial Action Task Force

• Financial Against Terrorism Financing

• Federal Assessment on Terrorism Financing

• Federal Action Task Force