AML BASICS
What is to prevent criminals from disguising illicit funds as legitimate?
The primary goal of AML programs.
The U.S. law passed in 1970 that started AML compliance.
What is the Bank Secrecy Act?
A customer making multiple small deposits just under reporting limits.
What is structuring?
The process of verifying a customer’s identity.
What is Know Your Customer (KYC)?
The U.S. agency that administers economic sanctions. (Hint, one of the criteria needed to approve an AML Letter)
What is OFAC (Office of Foreign Assets Control)?
What are placement, layering, and integration?
The three stages of money laundering.
This act expanded AML requirements after 9/11.
What is the USA PATRIOT Act?
Frequent wire transfers to high-risk jurisdictions may indicate this.
What is potential money laundering or terrorist financing?
Enhanced due diligence is required for these types of investors/affiliates, due to their public prominence/official government capacity
What are Politically Exposed Persons (PEPs)?
Screening customers against these lists is mandatory. (The lists Bridger screens against)
What are sanctions lists?
This term refers to breaking up transactions to avoid reporting thresholds.
What is structuring?
The global body that sets AML standards.
What is the Financial Action Task Force (FATF)?
A sudden change in transaction patterns without explanation.
What is a suspicious activity indicator?
The term for ongoing monitoring of customer transactions.
What is continuous due diligence?
The term for freezing assets of sanctioned individuals.
What is asset blocking?
AML programs are often paired with this related compliance area, (think along the lines of war-torn areas)
What is counter-terrorist financing (CTF)?
The EU directive that introduced beneficial ownership requirements.
What is the 4th AML Directive?
Use of shell companies with no clear business purpose.
What is a red flag for money laundering?
Collecting information on source of funds and domicile for both the fund and investor is part of this process, and can trigger a special form we have to attach to a JIRA ticket
What is enhanced due diligence?
The global sanctions list maintained by the UN is called this.
What is the UN Consolidated List?
The term for converting illicit funds into assets that appear legitimate.
What is integration?
The term for laws requiring reporting of large cash transactions.
What are Currency Transaction Reporting (CTR) requirements?
Transactions inconsistent with a customer’s known profile.
What is unusual activity requiring enhanced due diligence?
The risk assessment that determines the level of monitoring.
What is customer risk rating?
Failure to comply with sanctions can result in these penalties.
What are civil and criminal penalties?