Interview Questions.

Anti-Money laundering Interview Questions and Answers


Anti-Money laundering Interview Questions and Answers

Q1. What Is Money Laundering?

Ans: Money Laundering is the technique with the aid of which, criminals try to make the proceeds of crime seem legitimate and not using a apparent hyperlinks to their crook origins. This is carried out with the aid of three procedures:

Placement – Placing of the proceeds of crime

Layering – Hiding of the proceeds from their criminal beginning through ‘layers’ of transactions

Integration – Creating a valid cause of the proceeds

Q2. Who Needs To Perform Anti-cash Laundering Checks?

Ans: Solicitors, accountants, tax advisors, insolvency practitioners, economic institutions, credit score establishments, property marketers, chartered surveyors, accept as true with/provider providers, gaming organizations and high value sellers with the potential for a enterprise relationship really worth over 15,000 Euros, including car sellers and jewellers.

Q3. Why Do I Need To Perform Anti-money Laundering Checks?

Ans: The Anti-Money Laundering rules are ruled with the aid of 4 Acts: The Proceeds of Crime Act, The Serious Organised Crime and Police Act, The Terrorist Act and the Money Laundering Regulations. . Failure to document suspicious interest can convey a criminal sentence and cause widespread fines from the relevant regulatory body.

Q4. I Have Dealt With My Clients For Many Years , Do I Still Need To Carry Out Customer Due Diligence?

Ans: You need to hold CDD up to date for all your clients. You can also  have sufficient documentary ID information for your documents however if there has been any next alternate to their occasions or chance profile, you should update your CDD. It is suggested to check customers’ CDD on a normal foundation.

Q5. Who Enforces The Anti-cash Laundering Regulations?

Ans: The AML regulations are enforced via a number regulatory bodies. Guidelines are set by using the JMLSG (Joint Money Laundering Steering Group) and enforced through the FCA/PRA (Financial Conduct Authority/ Prudential Regulation Authority), the SRA (Solicitors Regulation Authority in England), OFT (Office of Fair Trading), HMRC (HM Revenue & Customs), ICAEW (Institute of Chartered Accountants in England & Wales, plus different Accountancy bodies), RICS (Royal Institute of Chartered Surveyors) and greater.

Q6. What Is Electronic Verification?

Ans: In order to prevent fraud and cash laundering it's miles important to verify people carrying out economic transactions. Previously documentary proof become relied on to affirm an individual. These might not continually be available and that they can also be easily cast or altered consequently electronic verification affords more protection and reduces threat against money laundering and fraud.

Electronic verification gets rid of the need for the client to be present, this saves time and allows guide client dating constructing. The risk of cash laundering is decreased as several facts sources are called upon to affirm the consumer rather than simply relying on documentary proof.

Q7. If I Collect Passports And Driving Licences, Why Do I Need To Check Anything Else?

Ans: EV can test a much wider variety of statistics, for that reason offering a more thorough expertise of your consumer (KYC – Know Your Customer). In addition, it could also permit you to test other facts sets such as PEPS and Sanctions lists, that's really useful and special by the third European Money Laundering Directive.

With fraudulent documentation on the upward thrust, there is a want to refocus efforts on figuring out them. Electronic verification is designed to dispose of the chance of receiving doubtlessly fraudulent files; consequently you may have a more degree of self belief in their authenticity. Various checks are carried out on the documents to confirm as an awful lot as possible, therefore decreasing the risk of ID fraud.

Q8. Online Systems Are Too Expensive, What If I Cannot Afford It?

Ans: There are often hidden costs related to taking paper files, which aren't usually at once recognisable. For example, if managing a client at distance, the posting through of critical documents with the aid of recorded delivery so one can ensure they do not get lost incorporates a charge, that's often greater than the fee of an electronic search. If the files are then misplaced, there's then the cost of changing the files on your capability customer. This may also be greater time-eating as a method, but through appearing a brief electronic search, could this then allow for more searches to be completed and in turn, increase the variety of clients taken onboard

Q9. Why Are You Allowing Me To See Sensitive Information?

Ans: The statistics held in digital systems is consented to be used in these structures. For an AML test, the Full Electoral Roll is permitted for this cause and this is blanketed in the Representation of the People Act (2002). When a Credit Reference Agency (CRA) utilises financial statistics in an AML take a look at, it does now not display any economic details, apart from the statistics important to ID a person.

Q10. What Are Politically Exposed Persons, Specially Designated Nationals And Financial Sanctions And Why Do I Need To Check Them?

Ans: It is usually recommended via the 3rd European Money Laundering Directive  to have a system in area to check PEPs, SDNs and the HMT Financial Sanctions.  A PEP is a Politically Exposed Person, and is someone who holds a outstanding public role, or an character connected to them. An SDN is a Specially Designated National , on a list which specifies that US Citizens aren't permitted to behavior enterprise with them. The HM Treasury Financial Sanctions listing specifies people with whom it is prohibited to transfer or make price range to be had to.

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Q11. What Are Money Laundering And Financial Terrorism?

Ans: Money laundering refers to conversion of cash illegally obtained to make it seem like it originated from a valid source. Money laundering is being hired through launderers worldwide to hide criminal activity related to it which include pills /fingers trafficking, terrorism and extortion.

Financial Terrorism way financial help to, in any shape of terrorism or to individuals who encourage, plan or engage in terrorism.

Money launderers send illicit finances via legal channels so that it will hide their criminal foundation whilst individuals who finance terrorism transfer funds that may be felony or illicit in authentic in the sort of way as to conceal their supply and remaining use, that's to help Financial Terrorism

Q12. What Is Kyc?

Ans: KYC is an acronym for “Know your Customer” a time period used for Customer identification system. It entails making affordable efforts to determine, the authentic identity and useful possession of debts, source of budget, the nature of purchaser’s business, reasonableness of operations in the account with regards to the client’s commercial enterprise, and so forth which in turn enables the banks to manipulate their dangers prudently.

The goal of the KYC hints is to prevent banks being used, intentionally or by accident via crook factors for cash laundering.

Q13. What Is Kyc Policy?

Ans: As in line with RBI recommendations issued vide their round dated 29/11/2004, all banks are required to formulate a KYC Policy with the approval of their respective boards. The KYC Policy includes the following 4 key elements.

Customer Acceptance Policy

Customer Identification Procedures

Monitoring of Transactions

Risk Management.

Q14. Who Is A Customer?

Ans: For the purpose of KYC coverage a ‘patron” may be described as:

A individual or entity that continues an account and/or has a business relationship with the bank;

One on whose behalf the account is maintained (i.E. The beneficial proprietor);

Beneficiaries of transactions performed by means of expert intermediaries, which include Stock Brokers, Chartered Accountants, Solicitors and many others as authorized below the law, and

Any character or entity connected with a monetary transaction that can pose full-size reputational or different risks to the bank, say a twine switch or issue of excessive cost demand draft as a unmarried transaction.

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Q15. What Is A Customer Acceptance Policy?

Ans: Customer Acceptance Policy refers to the overall tips accompanied by using banks in allowing customers to open accounts with them. Generally the suggestions stipulate that no accounts will be opened in nameless or fictitious names or while the identification of the customer matches with any individual with recognized criminal history or banned entities. Similarly accounts must no longer be opened whilst the bank is unable to verify the identity and/or obtain files required as per the financial institution’s coverage.

Q16. What Is The Customer Identification Procedure?

Ans: Customer identification means figuring out the consumer and verifying his/her identification via reliable and independent documents, information and information. Banks might need to satisfy to the equipped authorities that due diligence changed into observed according with the requirements of current legal guidelines and regulations.

Q17. When Does Kyc Apply?

Ans: KYC can be accomplished for the following however is not limited to:

Opening a new account.(deposit/ borrowal )

Opening a next account where documents as consistent with contemporary KYC requirements not submitted even as opening the preliminary account.

Opening a locker facility in which those documents aren't to be had with the bank for all locker facility holders.

When the financial institution feels it is essential to obtain extra records from present clients based at the behavior of the account.

After periodic periods primarily based on instructions obtained from RBI.

When there are modifications to signatories, mandate holders, useful proprietors, and so forth.

Q18. What Are The Aml/cft Supervisors Looking For?

Ans: The AML/CFT supervisors are focusing on whether or not the reporting entity has the appropriate and reasonable risk evaluation, and an AML/CFT programme that displays and controls the ones dangers. The AML/CFT supervisors take a hazard-based totally approach to supervision - choosing from the supervision and enforcement equipment to be had to us. Supervision will take into account the nature of the commercial enterprise and the dangers that each reporting entity is handling. Read our Bulletin article or speech for greater facts on the Reserve Bank’s technique to AML/CFT supervision.

Q19. What Are Peps?

Ans: “Politically-Exposed Persons” (PEPs) are folks who, by virtue of their role in public existence, can be vulnerable to corruption. The New Zealand regulation currently limits this idea to foreign PEPs, and does no longer encompass home (New Zealand-primarily based) PEPs. Reporting entities are required to offer specific attention to the risks concerned with PEPs and so must:

have processes in location to determine whether or not a customer, or a beneficial proprietor of a patron, is a PEP or a near companion of a PEP;

gain senior management acclaim for organising or maintaining commercial enterprise relationships with PEPs;

take affordable measures to establish the supply of wealth and source of funds of PEPs; and

behavior superior, ongoing monitoring of the enterprise dating.

Q20.  What Is Ongoing Customer Due Diligence?

Ans: Ongoing Customer Due Diligence method frequently reviewing client information and having structures to conduct account monitoring. This is needed for all clients, which includes current clients.

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Q21. Why are you allowing me to look sensitive statistics?

Ans: The facts held in electronic systems is consented to be used in these systems. For an AML check, the Full Electoral Roll is allowed for this purpose and this is included inside the Representation of the People Act (2002). When a Credit Reference Agency (CRA) utilises economic statistics in an AML test, it does no longer display any economic information, apart from the records vital to ID a person.

Q22. What are Politically Exposed Persons, Specially Designated Nationals and Financial Sanctions and why do I need to check them?

Ans: It is recommended through the third European Money Laundering Directive  to have a procedure in area to test PEPs, SDNs and the HMT Financial Sanctions.  A PEP is a Politically Exposed Person, and is someone who holds a distinguished public position, or an individual connected to them. An SDN is a Specially Designated National , on a listing which specifies that US Citizens aren't approved to behavior enterprise with them. The HM Treasury Financial Sanctions listing specifies people with whom it's miles prohibited to switch or make finances available to.[teaserbox type="4" img="2896" title="Interested in Learning Artificial Intelligence!" subtitle="Join myTectra Now!" link_url="http://www.Mytectra.Com/artificial-intelligence-training-in-bangalore.Html"]