Anti-money Laundering | 115 Questions with 100% Correct Answers

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Describe the three phases of money laundering. - ✔✔• Placement is the physical disposal of cash or other assets derived from criminal activity. • Layering is the separation of illicit procee... ds from their source by layers of financial transactions intended to conceal the origin of the proceeds. • Integration is supplying apparent legitimacy to illicit wealth through the re‐entry of the funds into the economy in what appears to be normal business or personal transactions. What are the two main reasons correspondent banking is vulnerable to money laundering? - ✔✔•By their nature, correspondent banking relationships create a situation in which a financial institution carries out financial transactions on behalf of customer of another institution. This indirect relationship meas that the correspondent bank provides services for individuals or entities for which it has neither verified the identities nor obtained any first‐hand knowledge, and • The amount of money that flows through correspondent accounts can pose a significant threat to financial institutions, as they process large volumes of transactions for their customers' customers. This makes it more difficult to identify the suspect transactions, as the financial institution generally does not have the information on the actual parties conducting the transaction to know whether they are unusual. Describe four types of risk associated with money laundering faced by a financial institution. - [Show More]

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