AML - Source of Wealth and Funds

What is the primary legislation that governs anti-money laundering and counter-terrorist financing in the UK?

• The Bribery Act 2010

• The Proceeds of Crime Act 2002

• The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017

• The Financial Services and Markets Act 2000

What does the term "source of wealth" specifically refer to?

• The origin of the client's entire wealth

• The source of monies for a particular transaction

• The amount and source of the client's annual income

• The client's savings account balance

Which of the following is considered a red flag in the context of source of funds due diligence? (Select Multiple)

• A client who is a resident of a high-risk third country

• A client who is employed in a well-paying job

• An unusually large transaction

• A client who provides clear documentation of their source of wealth

In the context of anti-money laundering checks, why is it important to understand the source of a client's wealth?

• To ensure the client has enough wealth to engage in large transactions

• To determine the client's investment knowledge and experience

• To identify any potential risks associated with the origin of the client's wealth

• To track when the illegal activity happened

Which of the following would be considered a legitimate source of funds? (Select multiple)

• Funds received from an unknown overseas entity without proper documentation

• Income generated from regulated gambling activities

• Investment dividends from overseas businesses

• Money transferred from an account under a false identity

When would we ask the client for Source of Funds? (Select Multiple)

• On a purchase of a property

• On the sale of a business

• Taking a lease

• Repayment of a loan

Select any of the below that is required when the client is receiving a Gift (Low Risk) (Select Multiple)

• Money sent directly to us from Giftor

• Source of Funds from Giftor

• Source of Wealth from Giftor

• ID from Giftor

How far do you have to go back with source of funds checks ?

• 12 months

• As far as is needed to build a clear picture of the clients risk profile and of how this particular client accumulated their money for the transaction.

• 6 months as standard or less if you know the client

• 6 months on all clients as this is the SRA regulatory approved timeframe.

Tags

Client due diligence