Red Flags for ML
True or False. Online gambling provides an excellent method of laundering because transactions are conducted primarily through credit or debit cards and the sites are typically unregulated offshore firms.
TRUE
What are the types of products usually involved in TBML (trade based money laundering)?
Precious Metals, cars, Textiles, Electronics
What are the key risk indicators in money laundering?
Customer type, Location, size of bussiness and transaction
True or False. The correspondent does not or cannot conduct typical due diligence to know the customers of the respondent (Know Your Customer’s Customer)
TRUE
How much money is laundered every year worldwide?
Between $800 billion and $2 trillion
Is suspicious transaction report necessary if Customer conducts an unusually high number of transactions over the internet or by telephone.
Yes
Do you know at least 3 types of trade based money laundering and how it works?
Overinvoicing, unerinvoicing, Overshipping or short-shipping, Ghost-shipping, Multiple invoicing, Black market trades
Who usually launders money?
private individuals, drug dealers, businesses, corrupt officials, members of criminal organizations such as the Mafia, and even states
What are the risks of correspondent banking?
Insufficient customer identification and verification, weak monitoring of transactions, and inadequate risk assessment processes
What are the types of correspondent banking?
Trade Finance, Payment Solutions, Treasury Management, Foreign Exchange, Nostro/Vostro Accounts, Relationship Management etc.
Is suspicious transaction report necessary if a customer owns a large supermarket and deposits large amounts of cash several times a day.
No
What is black market pesos exchange and what it‘s main purpose?
"Domestic transfer of funds is used to pay for goods by a foreign importer. Purpose to exchange dirty money back to pesos."
Name a few consequences of an organization’s failure to manage the risk of money laundering
Negative publicity, damage to corporate reputation and loss of goodwill, legal and regulatory sanctions,"
Please describe simple example of a correspondent bank.
As a common correspondent banking example, imagine a small domestic bank in Australia has decided to accept international clients in Europe and Asia. In this case australian bank needs to use correspondent bank for it.
What It Means to 'Cook the Books'?
Cook the books is a slang term for using accounting tricks to make a company's financial results look better than they really are. Typically, cooking the books involves manipulating financial data to inflate a company's revenue, deflate expenses, and pump up profit.