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2015 AML Assessment and Case Study.
You are required to make reference to the "Anti-Money Laundering & Countering The Financing of Terrorism 2015" slides sent to you on the 5 Nov 2015.
The passing marks for the assessment will be 70%
MAS Representative Number or NRIC
Q1) Financial Action Task Force (FATF) is an inter-governmental body established in ________ by ministers of member jurisdictions to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system.
Q2) In terms AML/CFT, Beneficial Owners (B
O) are describe as:
Someone who gets the insurance payout in the event of death of the life assured.
Someone who is a joint policy owner of an insurance policy
Someone who ultimately owns and controls the client.
None of the above.
Q3) According to FAA Notice 6, all Financial Advisers are to adopt a risk based approach in assessing the organisation AML/CFT risks. Two of the factors to be taken into consideration includes:
Profit and loss, Assets and Liabilities
Customers of FA, Countries where FA and its subsidiaries are operating in
Delivery channels, Age of clients
If client is residing in FATF listed countries, Cash flow of FA firm
Q4) Singapore has a reputation of being an international world class financial hub and is also regarded as having one of the most highly regulated financial systems in the world. AML/CFT risks are considered as very low. Thus we can afford to have less stringent AML/CFT regulations as compared to other countries.
False. Money Launderers can use Singapore's reputation as a conduit for laundering.
True. Compared to our neighboring countries in the region, we can afford to be more lax on certain AML/CFT regulations and policies
None of the above.
Q5) As part of customer due diligence (CDD) procedures, FAs can open or maintain anonymous customer accounts subjected to the company undertaking appropriate risk mitigation procedures such as subjecting the account to more frequent monitoring of suspicious activities.
Q6) Case Study.
FC Mary was introduced to Leslie, an Indonesian businessman by her friend, Mr Kwan. Leslie has many business connections and is also the cousin of a prominent Indonesian government minister. Leslie is very busy and often flies in and out of Singapore for his business dealings.
After several phone conversations, Mary realised that Leslie is about to complete a purchase for a private property in Singapore. Mary thus propose a term policy of $10 million to cover for his mortgage loan. Mary had liaise with Mr Kwan without actually meeting Leslie as he was too busy and only in Singapore for short duration each time.
All the required documents such as proof of identity, passport and source of income has been provided to Mary by Mr Kwan. In addition, Mary realised that the corresponding address in the application form is reflected as Mr Kwan's address.
Pick out two red flag indicators that this may be a suspicious transaction.
First red flag
Second red flag
Q7) Case Study
FC Adam and his client Ben are close friends since their university days. Ben is a successful corporate executive in a large MNC firm. Through their many regular catch up sessions, Ben shared that he has been put in charge of a big company initiative and has shortlisted a company C to provide technology support and know how.
C had provided the first quotation to Ben which amounted to $80,000. However, C called Ben subsequently to inform him that there was a discrepancy in one of the items and the final amount should be $60,000 instead. The revised copy of page 1 of 4 of the quotation was sent to Ben. The quotation consists of 4 pages where the quotation was only signed on page 4 of 4. Ben had already submitted the payment of $80,000 to be release by the company directors and the cheque has since been issued. To save on the hassle, C decided to bank in the $80,000 cheque and internet transfer the extra $20,000 to Ben's personal bank account.
Adam propose that Ben split this $20,000 into two short term 2 year investment plans with a guaranteed return of 2.5% to be put under his and Ben's name separately. $20,000 can then be returned to Ben's company after 2 years where company C would suffer no loss and that both Ben and Adam have not committed any crime.
Was money laundered in this scenario?
In the event of any criminal charges, Adam will not be implicated as he is not directly involved in the criminal act.
Adam is correct. No crime has been committed as the full amount was return to the company with no losses.
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