The Basics
These are the 3 stages of money laundering.
Placement, layering and integration
These are 2 reasons why due diligence procedures must be applied to new members.
To know who you are dealing with, to understand the purpose of the a/c, to identify red flags, to see if the members need additional scrutiny and monitoring - all avoid penalties/ fines and to protect the reputation of CECU
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
CECU is most vulnerable during these 2 stages of money laundering.
Placement and layering stages
This is the timeframe for treating someone as a PEP.
There is no timeframe
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
The is the Body in CECU that sets the tone at the top.
The Board of Directors
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
One of the reasons why criminals launder or clean the proceeds of their crime.
To avoid detection, hide illegal wealth and 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.
Fines 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 is one of the important reasons for compliance in regulated industries.
Protecting members and their assets, preserving trust, preventing crime and maintaining adherence
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 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 by the CO
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