The Basics
These are the 3 stages of ML in their correct order.
Placement, layering and integration.
This is one reason why due diligence procedures must be applied to new members.
To know who you are dealing with and identify red flags in potential criminal activity, to comply with the law and avoid penalties, to protect the reputation of CECU, and to see if the members need additional scrutiny and monitoring.
This is reason for a ISAR to be completed by a staff member.
For any transaction for which there is a suspicion or detection of unusual behaviour or activity.
This is who the ISAR must be submitted to.
The Compliance Officer.
This is how often staff should receive training in AML/CTF/CPF?
At least annually.
Credit Unions are most vulnerable during these 2 stages of money laundering.
Placement and layering stages.
5 things that must be obtained and/or documented when trying to establish a relationship with a new member.
Name, address, and proof thereof, date and place of birth, nationality, ID, expected use of a/c, occupation, job letter or pay.slip, income, signature, SOF etc.
This common red flag involves a member making multiple smaller cash deposits below the reporting threshold to avoid detection.
Structuring.
This is the timeframe in CECU for submitting ISARS to the Compliance Officer.
Immediately and within 24 hours.
This is a fundamental difference between ML and TF.
ML always involves the proceeds of illegal activity but not TF, ML is circular, not TF, TF uses smaller amounts than ML and TF gets detected by the relationships.
This is how the identities of the Compliance Officers must be treated.
Confidential.
This is the category of members that requires the application of Enhanced Due Diligence.
For High Risk Members.
This red flag is raised when a member's account activity suddenly changes, showing significantly higher transaction volumes or types that don’t match their known business profile.
Unusual or inconsistent account activity
This is the Supervisory Authority that the Compliance Officer must submit all Suspicious Activity Reports (SARs).
The Financial Intelligence Unit of Trinidad and Tobago.
This is the penalty for tipping off.
$5M and 5 years imprisonment.
This is one of the reasons why criminals launder or clean the proceeds of their crime.
To avoid detection & seizure, hide illegal wealth, fund expansion, avoid prosecution, legitimize the funds etc.
These are 2 possible categories of high risk members.
PEPs, foreign members, non resident members, non face to face members, links to countries on FATF list, complex or unusual transactions with no economic purpose.
This is an example of a red flag prevalent in credit unions.
For large transaction, use of 3rd parties, unusual loans or savings patters, reluctance to provide evidence of ID, use of family member a/cs to disguise funds.
If CECU fails to report suspicious activities, these 2 things can be the outcomes against the credit union and any persons involved.
Penalties and imprisonment.
These are 2 of the risks that CECU faces if it is used for ML, TF or PF.
Regulatory/ compliance, reputational, operational and financial.
This term refers to the financial activities that support the development and spread of weapons of mass destruction, often involving illicit transfers and transactions to obscure their purpose.
Proliferation Financing
This is the timeframe for someone who is a PEP to continue to be treated as a PEP.
There is no timeframe.
This is the deliberate avoidance by a a staff member of the obvious red flags and facts relating to a member that indicates possible illegal or unusual activity.
Willful blindness.
This is the timeframe for the Compliance Officer to submit a SAR to the FIUTT
14 days from the date the transaction or activity was deemed to be suspicious.
This is the last step that must be taken by CECU if there are doubts about the veracity or adequacy of the information provided by a member and the CU did everything in its power to get the correct info but was unsuccessful.
Discontinue the relationship.