CFCS Chapter 3 Money Laundering exam
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with answers |\
FATF - CORRECT ANSWERS ✔✔Financial Action Task Force
|\ |\ |\ |\ |\ |\ |\ |\
IGO- sets out international measures needed to combat
|\ |\ |\ |\ |\ |\ |\ |\
money laundering- 1990's first thing it did was draft 40
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
Recommendations. 37 nations as members - based in |\ |\ |\ |\ |\ |\ |\ |\
Paris
First stage of money laundering - CORRECT ANSWERS
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✔✔placement:marks the entry of the funds into the |\ |\ |\ |\ |\ |\ |\ |\
financial system in order to distance funds or assets from
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their original source. They are the most vulnerable at this
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stage. This is the stage where smurfing,structuring, and
|\ |\ |\ |\ |\ |\ |\ |\
bulk cash smuggling occurs.
|\ |\ |\
Second stage of money laundering - CORRECT ANSWERS
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✔✔Layering: layers of transactions to distance |\ |\ |\ |\ |\ |\
themselves from original source of funds, makes sure it is |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
not traceable. Often involves multiple participants and
|\ |\ |\ |\ |\ |\ |\
entities, like shell corporations and cross border
|\ |\ |\ |\ |\ |\ |\
transactions. |\
includes: EFTs, complex asset movement, multiple shell
|\ |\ |\ |\ |\ |\ |\
corporations, trusts, offshore account and legitimate |\ |\ |\ |\ |\ |\
businesses
, layering techniques typically disguise money launderer's
|\ |\ |\ |\ |\ |\
ownership of multiple accounts and entities |\ |\ |\ |\ |\
Third stage of money laundering - CORRECT ANSWERS
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✔✔Integration: Tangible goods purchased; it puts |\ |\ |\ |\ |\ |\
proceeds into the legitimate economy to appear |\ |\ |\ |\ |\ |\ |\
legitimately derived. Many ways to integrate funds but |\ |\ |\ |\ |\ |\ |\ |\
most common way is through the purchase of real estate
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
and/or asset investments. |\ |\ |\
Trade based ML is a popular integration method- false or
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
over invoiced import/export transactions
|\ |\ |\ |\
$$$ is now a tangible asset, luxury goods are usually
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
purchased as this stage |\ |\ |\
impact of money laundering - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\
✔✔corruption, unfair competition with legit businesses, |\ |\ |\ |\ |\ |\
and a weakening of financial institutions like banks and
|\ |\ |\ |\ |\ |\ |\ |\ |\
securities dealers- impact on FDI |\ |\ |\ |\
ML RED Flags: Account Profile - CORRECT ANSWERS
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✔✔Use of variations when spelling of names/addresses
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money inconsistent with customer profile
|\ |\ |\ |\
unusual customer behavior |\ |\
|\ |\ |\ |\ |\ |\
with answers |\
FATF - CORRECT ANSWERS ✔✔Financial Action Task Force
|\ |\ |\ |\ |\ |\ |\ |\
IGO- sets out international measures needed to combat
|\ |\ |\ |\ |\ |\ |\ |\
money laundering- 1990's first thing it did was draft 40
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
Recommendations. 37 nations as members - based in |\ |\ |\ |\ |\ |\ |\ |\
Paris
First stage of money laundering - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\ |\
✔✔placement:marks the entry of the funds into the |\ |\ |\ |\ |\ |\ |\ |\
financial system in order to distance funds or assets from
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
their original source. They are the most vulnerable at this
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
stage. This is the stage where smurfing,structuring, and
|\ |\ |\ |\ |\ |\ |\ |\
bulk cash smuggling occurs.
|\ |\ |\
Second stage of money laundering - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\ |\
✔✔Layering: layers of transactions to distance |\ |\ |\ |\ |\ |\
themselves from original source of funds, makes sure it is |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
not traceable. Often involves multiple participants and
|\ |\ |\ |\ |\ |\ |\
entities, like shell corporations and cross border
|\ |\ |\ |\ |\ |\ |\
transactions. |\
includes: EFTs, complex asset movement, multiple shell
|\ |\ |\ |\ |\ |\ |\
corporations, trusts, offshore account and legitimate |\ |\ |\ |\ |\ |\
businesses
, layering techniques typically disguise money launderer's
|\ |\ |\ |\ |\ |\
ownership of multiple accounts and entities |\ |\ |\ |\ |\
Third stage of money laundering - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\ |\
✔✔Integration: Tangible goods purchased; it puts |\ |\ |\ |\ |\ |\
proceeds into the legitimate economy to appear |\ |\ |\ |\ |\ |\ |\
legitimately derived. Many ways to integrate funds but |\ |\ |\ |\ |\ |\ |\ |\
most common way is through the purchase of real estate
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
and/or asset investments. |\ |\ |\
Trade based ML is a popular integration method- false or
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
over invoiced import/export transactions
|\ |\ |\ |\
$$$ is now a tangible asset, luxury goods are usually
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
purchased as this stage |\ |\ |\
impact of money laundering - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\
✔✔corruption, unfair competition with legit businesses, |\ |\ |\ |\ |\ |\
and a weakening of financial institutions like banks and
|\ |\ |\ |\ |\ |\ |\ |\ |\
securities dealers- impact on FDI |\ |\ |\ |\
ML RED Flags: Account Profile - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\ |\
✔✔Use of variations when spelling of names/addresses
|\ |\ |\ |\ |\ |\
money inconsistent with customer profile
|\ |\ |\ |\
unusual customer behavior |\ |\
