In its report, Transparency and Beneficial Ownership (FATF, October 2014), the FATF made it clear that corporate vehicles play an essential role in the global economy, conducting a wide range of legitimate, commercial and entrepreneurial activities
The total word count for this assignment should be between 3,000 and 3,500 words. This includes all text references and appendices but excludes any footnotes, reference page or contents page. N.B. Appendices should only be used in exceptional circumstances and should consist of only brief extracts or tables.
8. The number of words per part of the question should be in proportion to the number of marks allocated. 9. Penalties will be applied for excessive overall word count. All parts of the question can be answered in relation to a jurisdiction with which you are familiar. JURISDICTION -Bahamas The name of the jurisdiction you have selected should be clearly stated in your answer. Answer all parts of the question.
a) In its report, Transparency and Beneficial Ownership (FATF, October 2014), the FATF made it clear that corporate vehicles play an essential role in the global economy, conducting a wide range of legitimate, commercial and entrepreneurial activities. Nonetheless, they have also been misused by criminals to disguise and convert the proceeds of their crimes. In its Report to the G20 on Beneficial Ownership (FATF, October 2016), the FATF highlighted how it is helping to improve transparency and prevent the misuse of companies, trusts and other corporate vehicles. Evaluate the extent of the issue, the particular difficulties associated with tracking ultimate beneficial ownership, and the measures that are being taken to assist with the problem. 25 marks
b) You are a member of the AML compliance team that focuses on anti money laundering at a regional office of an international bank. You receive an internal suspicious activity report from a customer relationship manager (CRM) via the bank`s reporting process. The internal report details the following customer activity. Sergio Valdez has been a customer of the bank for the last three years. He operates a small agency in London that assists firms that wish to develop business in Latin America. The turnover of the firm over the last three years has been consistent at circa US$300,000 per annum, consisting of invoices that are on average between US$3,000–5,000. The invoices have all been to UK-based entities. In the last six months the scale and profile of the business has changed. Several inward and outward transactions from Colombia, Argentina and Brazil have totalled US$6.5 million and on invoices the standard statements as to nature of services all state `business facilitation fees`.
The CRM tried to arrange a meeting with Sergio Valdez but his office stated regularly that he was out of the country. The CRM eventually managed to arrange a call with him and asked about the change in type and scale of the business. Sergio Valdez explained that the business had expanded and he now had more clients, but he was vague as to details of who his clients were, the nature of the business and how it had grown so quickly. He appeared reluctant to stay on the call, saying he was busy and would come to the bank to answer any further questions that were needed. Despite repeated attempts to arrange a meeting, no meeting was held because of the customer`s non-availability. After several weeks of trying, the CRM became concerned and submitted an internal suspicion report.
i) Evaluate any risk issues arising as a consequence of the case.
ii) ii) Assess what actions you should take on receiving the internal suspicion report.
iii) iii) Under what circumstances is there an obligation on you to report both internally and externally any suspicion of money laundering? 30 marks
c) From a customer due diligence (CDD) perspective, in a jurisdiction of your choice, analyse the status of a politically exposed person (PEP) including: i. identifying who should be classified as a PEP or as a ‘close associate’ or ‘immediate family member’ ii. describing how PEPs are classified from a CDD perspective. 20 marks
d) You are a member of the AML/Compliance team of a financial services firm based in a jurisdiction of your choice. You have been requested to review a new business application for a high-net-worth individual who wishes to open an account with the firm to facilitate extensive inward and outward payments from and to a number of global centres. The only information on the client file specifies:
• the nature of the client’s business – import and export, primarily in the agricultural industry
• the rationale for inward and outward payments – settlement of trading accounts
• the jurisdictions of operation – various, primarily North America
• the source of funds – family wealth You are uncomfortable about the lack of detailed information and decide to conduct more extensive due diligence.
Explain what measures you would take, what information you would require and how you would go about obtaining the required information. 25 marks Total 100 marks
ASSIGNMENT AS THE FOLLOWING Assignments must be submitted in Microsoft Word format. You should not include the question within your assignment. You must ensure that your assignment is properly referenced using footnote referencing system Include
- · a contents page – optional, but gives a professional finish to your assignment
- · font size 11 or 12 in a clear typeface such as Calibri, Ariel, Times New Roman
- · leave 1.5–2 line spacing
- · use sub-headings to clearly identify what you are discussing
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