AMLCTFCOURSE

Introduction to AML/CTF
Index
MONEY LAUNDERING .....................................................................8 PLACEMENT TECHNIQUES ............................................................17 LAYERING TECHNIQUES ...............................................................27 INTEGRATION TECHNIQUES.........................................................35 TERRORISM FINANCING ..............................................................43 KNOW YOUR CUSTOMER...............................................................53 OVERVIEW OF THE ACTS ..............................................................65 REMITTANCE PROVIDERS REGISTRATION ...................................78 REPORTING OBLIGATIONS...........................................................83 AML/CTF PROGRAMS..................................................................100
Introduction to AML/CTF - Last modified: 12 December 2007
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Pre-assessment
This assessment will test your understanding of anti-money laundering and terrorism financing You will be presented with a set of questions, you cannot get feedback when you answer a question, but you have the option of changing your initial answer. At the end, you will be asked to submit all your answers. Question 1 stages of money laundering Select the correct description. The stage of money laundering at which illicit money first enters the financial system is called: a) placement b) layering c) integration Question 2 stages of money laundering Select the correct description. The stage of money laundering at which illicit money becomes indistinguishable from legitimate funds and can be reinvested is called: a) placement b) layering c) integration Question 3 stages of money laundering Select the correct description. The stage of money laundering at which money is dispersed and disguised is called: a) placement b) layering c) integration Question 4 money laundering Indicate whether the following statement is True or False. Money laundering only refers to the laundering of illegal funds and not illegal assets.
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Question 5 money laundering Identify the risks banks face when their institution is used for money laundering. a) loss of reputation b) legal risk c) loss of customers d) operational risk e) all of the above Question 6 money laundering Indicate whether the following statement is True or False. Criminals almost always launder money solely through banks and other financial institutions. Therefore anti-money laundering compliance is not a serious issue for other types of businesses. Question 7 money laundering Select the single correct statement. a) To fight money laundering effectively a business must have in place a process for reporting significant cash transactions. b) To fight money laundering effectively a business must know its customers and monitor their transactions and have a process for reporting significant cash and suspicious transactions. c) To fight money laundering effectively a business must have a process for reporting significant cash and suspicious transactions. Question 8 know your customer Which of the following are appropriate ways to assess the inherent ML/TF risks that a customer may present: a) review type of customer (individual, company, trust, etc.) b) review type of account (business, fiduciary, etc.) c) review country of origin d) (a) and (c ) above e) (a), (b) and (c ) above
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Question 9 cash dealers Indicate whether the following statement is True or False. Cash dealers are required to submit reports to the Australian Transaction Reports and Analysis Centre (AUSTRAC) only if they have a reasonable basis for suspecting that a financial transaction may involve money laundering. Question 10 AUSTRACs role What is the scope of AUSTRAC's responsibilities under the Financial Transaction Reports Act 1988? a) AUSTRAC monitors compliance by cash dealers with anti-money laundering (AML) legislation and supports enforcement agencies in the fight against money laundering. b) AUSTRAC monitors and directly enforces AML compliance by banks and insurance companies. c) AUSTRAC monitors and directly enforces AML compliance by all businesses defined as cash dealers. Question 11 cash dealers Select the single correct response. Which is the best description of a cash dealer under the Financial Transaction Reports Act 1988 (FTR Act)? a) A bank or insurance company. b) A wide range of businesses and institutions (specified in the FTR Act) which deal in cash and financial transactions. c) A bank, insurance company or other financial institution designated by AUSTRAC as a cash dealer. Question 12 reporting Select the single correct response. What is a significant cash transaction? a) A cash transaction or wire transfer involving the transfer of $10,000 or more. b) A cash transaction involving the transfer of $20,000 or more. c) A cash transaction involving the transfer of $10,000 or more.
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Question 13 terrorism financing Indicate whether the following statement is True or False. Terrorist organisations can obtain money to source their activities from legitimate organisations such as charities and religious groups. Question 14 terrorism financing Indicate whether the following statement is True or False. Australia does not have a plan to detect terrorism activities or financing. Question 15 reporting Indicate whether the following statement is True or False. When departing from or arriving in Australia you only need to report amounts of $10,000 or more in cash. Question 16 know your customer Indicate whether the following statement is True or False. Under the AML/CTF Act reporting entities only need to identify and verify new customers. Question 17 FTR Act Indicate whether the following statement is True or False. The FTR Act is currently being phased out by the AML/CTF Act which will be implemented over two years. Question 18 money laundering Indicate whether the following statement is True or False. Money launderers are generally criminals trying to hide money from the drug trade. Question 19 AUSTRACs role Indicate whether the following statement is True or False. One of AUSTRAC's responsibilities under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 is to act as an information and analysis conduit between the financial and gambling sectors and law enforcement, revenue collection and national security agencies.
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Question 20 AML/CTF Act Select the correct response. What is a key requirement of the AML/CTF Act? a) identification and verification b) managing relationships with reporting entities c) compliance watch-dog program d) information sharing with government agencies
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Money Laundering
Objectives
In this module, we will address the following questions: What is money laundering? Why do criminals launder money and what are the consequences? What is AUSTRAC's role in the fight against money laundering? What are the three stages of money laundering?
Your key learning objectives will be to respond effectively to each of the questions listed above.
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What is money laundering?

Lets start by having a common understanding of the definition of money laundering and the scale of the problem. Every year, huge amounts of funds are generated from illegal activities such as drug trafficking, tax evasion, people smuggling, theft, arms trafficking and corrupt practices. These funds are mostly in the form of cash. The criminals who generate these funds need to bring them into the legitimate financial system without raising suspicion. The conversion of cash into other forms makes it more useable. It also puts a distance between the criminal activities and the funds. Money laundering is the name given to the process by which illegally obtained funds are given the appearance of having been legitimately obtained. By some estimates, more than AUD1.5 trillion of illegal funds are laundered worldwide each year! This is more than the total output of an economy the size of the United Kingdom. Of the world-wide total, an estimated AUD200 billion is laundered in the Asia-Pacific region. By combating money laundering, we can reduce crime and weaken criminals. For example, if it becomes very difficult for drug traffickers to use the money generated by trafficking, this activity is likely to diminish.
Why do criminals launder money and what are the consequences?

There are several reasons why people launder money. These include: hiding wealth: criminals can hide illegally accumulated wealth to avoid its seizure by authorities avoiding prosecution: criminals can avoid prosecution by distancing themselves from the illegal funds evading taxes: criminals can evade taxes that would be imposed on earnings from the funds increasing profits: criminals can increase profits by reinvesting the illegal funds in businesses becoming legitimate: criminals can use the laundered funds to build up a business and provide legitimacy to this business
There are severe economic and social consequences of money laundering.
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These include: undermining financial systems: money laundering expands the black economy, undermines the financial system and raises questions of credibility and transparency expanding crime: money laundering encourages crime because it enables criminals to effectively use and deploy their illegal funds 'criminalising' society: criminals can increase profits by reinvesting the illegal funds in businesses reducing revenue and control: money laundering diminishes government tax revenue and weakens government control over the economy
What is AUSTRACs role in the fight against money laundering?

The Australian Transaction Reports and Analysis Centre (AUSTRAC) is Australia's anti-money laundering and counter-terrorism financing regulator and specialist financial intelligence unit Australias financial intelligence unit. AUSTRAC is part of the Attorney-General's portfolio and reports to the Minister for Home Affairs. AUSTRAC's primary objective is to implement the reform of Australia's anti-money laundering and counter-terrorism financing partnership with industry, partner agencies, government and the community. AUSTRAC was established under the Financial Transaction Reports Act 1988 (FTR Act) and continued in existence by the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act). The FTR Act is currently being phased out by the AML/CTF Act. For the time that both Acts are in operation, regulated entities may have obligations under one or both Acts. AUSTRAC is responsible for ensuring compliance with the provisions of the FTR and AML/CTF Acts.
Example: third parties used to launder funds

In the example below, we will see how AUSTRAC can play a role in an ongoing investigation. Suspicion: AUSTRAC's automated monitoring system identified a set of financial transactions in which a person was trying to avoid the FTR Act's reporting requirements. Financial transaction reports provided to AUSTRAC by a cash dealer showed that more than $4 million had been sent (remitted) internationally by this person to accounts at two different banks in Asia. Comment: AUSTRAC's monitoring system detects: patterns of suspect transactions in the data it receives from cash dealers hidden links between different persons (common address transfer of funds)
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Investigations: Acting on AUSTRAC's information, an Australian law enforcement agency commenced an investigation. It turned out that the suspect collected cash from a third person and then remitted the funds to Asia through a particular cash dealer. Comment: In many cases, money laundering involves transfers to and from other countries. Filing of international funds transfer instruction (IFTI) reports by cash dealers is essential for such detection. Apprehension: The suspect was subsequently arrested. Investigators learned that a resident of Asia paid the suspect a commission in return for the remittance of funds to Asia. Packages of $100,000 in cash were delivered within Australia and then electronically remitted overseas through a series of structured transactions. Comment: The suspect was convicted and imprisoned and over $600,000 was recovered. In this case, AUSTRAC proactively assisted the law enforcement agency in identifying the criminal activity.
What are the three stages of money laundering?

The money laundering process is typically segmented into three stages: placement layering integration
Placement: At this stage, illegal funds or assets are first brought into the financial system. This placement makes the funds more liquid. For example, if cash is converted into a bank deposit, it becomes easier to transfer and manipulate. Money launderers place illegal funds using a variety of techniques, which include depositing cash into bank accounts and using cash to purchase assets. Layering: To conceal the illegal origin of the placed funds and thereby make them more useful, the funds must be moved, dispersed and disguised. The process of distancing the placed funds from their illegal origins is known as layering. At this stage, money launderers use many different techniques to layer the funds. These include using multiple banks and accounts, having professionals act as intermediaries and transacting through corporations and trusts. Funds may be shuttled through a web of many accounts, companies and countries in order to disguise their origins. Integration: Once the funds are layered and distanced from their origins, they are made available to criminals to use and control as apparently legitimate funds. This final stage in the money laundering process is called integration. The laundered funds are made available for activities such as investment in legitimate or illegitimate businesses, or spent to promote
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the criminal's lifestyle. At this stage, the illegal money has achieved the appearance of legitimacy. It should be noted that not all money laundering transactions go through this three-stage process. Transactions designed to launder funds can also be effected in one or two stages, depending on the money laundering technique being used. The following case studies involve the use of two or more of the three stages of money laundering.
The Spence Network Case

Between 200304, a Melbourne criminal network laundered $70 $100 million of illegal drug money. The network involved 24 key people including a Tasmanian-based diplomat, a Western Australian police officer, two lawyers, a stockbroker, an assistant bank manager, two rabbis, a fire fighter and two Swiss bankers. A law firm organised the scheme by setting up two shell corporations, one involved in a non-existent trucking business and the other in a nonexistent beer distribution business. A number of members of the gang acted as couriers. From locations in and around Melbourne, they collected cash proceeds from drug trafficking operations and brought the cash to the lawyers or fake businesses. With the help of the lawyers and the assistant bank manager, the illegal cash funds were deposited into various bank accounts in Victoria. The funds were transferred from the Victorian accounts to various European financial institutions including a Swiss bank. The Swiss bankers remitted the illegal funds to accounts belonging to the money launderers. The funds from the accounts belonging to the money launderers were used to purchase assets and invest in business ventures.
The Spence Network Case Takeaways

Networks: Money laundering networks can be quite large. Participants: Participants may consist of people you would not quite expect. Fronts: Fake businesses known as fronts are often used in the money laundering process. Intermediaries: Intermediaries such as lawyers and bankers often play a critical role in the process.
The Douglas Case

In the following case, the money launderers used multiple layers and stages to achieve their objectives.
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Bob Douglas laundered close to $50 million for an Adelaide drug syndicate. In the first stage, he would arrange for cash in different amounts to be deposited into bank accounts. Comment: The initial deposit of cash into the banking system (placement) is the riskiest part of the process because the money is in cash form and still close to its illegal origins. Over three years, Douglas coordinated the transfer of funds from the banks into more than 100 accounts in 68 banks in nine countries Austria, Denmark, the United Kingdom, France, Germany, Hungary, Italy, Luxembourg and Monaco. The amount of each transfer ranged from $50,000 to $1 million. Comment: In this stage (layering), the funds were moved deeper into the banking system and spread across many banks, accounts and countries. Douglas transferred large amounts into accounts in countries which he perceived as having lax anti-money laundering rules in particular, Austria, France, Hungary and the UK's Channel Islands. In the next stage, the funds were transferred into the accounts of European individuals. In many cases, fictitious names, such as Tim Jones and Mohammed Rosa, were used to open accounts. Comment: By using European individuals and names in this layering stage, Douglas managed to avoid the extra scrutiny imposed on account openings by individuals with Australian or European names. Had account opening and monitoring policies been stricter, perhaps the fictitious individuals could have been detected. In the next stage, the funds were transferred into the accounts of European front companies. These companies then invested the funds into apparently legitimate businesses, such as restaurants, construction companies, pharmaceutical enterprises and real estate. Comment: In this layering and integration process, Douglas assessed that transfers of money to and from European front companies would not arouse suspicion. These companies provided no immediate reason, such as geographic, legal or cultural, for bankers to investigate the assets or underlying transactions. The scheme was interrupted when a bank failure in Monaco exposed several accounts linked to Douglas. While in Luxembourg, endless noise from a money-counting machine in Douglass house prompted a neighbour to alert the local police! Douglas was arrested in 1990, convicted of money laundering in a Luxembourg court in 1992 and extradited to face charges a few years later. Comment: It is instructive that it took a bank failure and a chance occurrence to expose the scheme. Douglas was able to manipulate the normal banking processes of account opening, monitoring, deposits, transfers and payments without arousing suspicion!
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Summary
Definition: Money laundering refers to the process by which illegal funds and assets are converted into seemingly legitimate funds and assets. Sources: The funds come from drug trafficking, tax evasion, people smuggling, theft, arms trafficking, corrupt practices and other illegal activities. Effects: By laundering these illegal funds, the role and power of criminals is substantially strengthened. Placement: The first stage of the money laundering process, in which illegal funds or assets are first brought into the financial system. Layering: The second stage of the money laundering process, in which illegal funds or assets are moved, dispersed and disguised to conceal their origin. Funds can be hidden in the financial system through a web of complicated transactions. Integration: The third stage of the money laundering process, in which the illegal funds or assets are successfully cleansed and appear legitimate in the financial system, making them available for investment, saving or expenditure.
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Money Laundering Quiz

This quiz will test your understanding of money laundering. Question 1 Sources of Laundered Money Select the correct response. Money laundering: a) is itself a crime and it is built upon another crime b) is not itself a crime but is built upon a crime Question 2 Using Laundered Money Complete the following statement with the most appropriate phrase or phrases. By laundering money from criminal activity, criminals are able to: a) distance themselves from the criminal source of the funds b) more easily hide and transfer the illegal funds c) increase their profits by investing in legitimate assets d) a and b above e) a, b and c above Question 3 Effects of Money Laundering Please complete the following statement with the most appropriate phrase. The effect of money laundering on the financial system is to: a) create an opportunity for banks to increase profits b) undermine credibility and expand control by criminals c) improve and enhance money flows by bringing cash into the system Question 4 AUSTRAC's Role Complete the following statement with the most appropriate phrase. AUSTRAC's role in Australia's anti-money laundering campaign is to: a) act as an investigator to the private and government sectors, making best practice recommendations. b) implement the FTR Act and AML/CTF Act by reporting to other government agencies on financial transaction reports received by noncompliant businesses. c) implement the FTR Act and AML/CTF Act by collecting, analysing and disseminating financial transaction reports information and assisting designated partner agencies.
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Question 5 AUSTRAC's Role Which of the following functions is NOT part of AUSTRAC's role? AUSTRACs role does not include: a) receiving financial transaction reports from regulated entities. b) licensing financial institutions. c) inspecting regulated entities and solicitors to ensure compliance with the FTR Act and AML/CTF Act. d) educating and guiding regulated entities and the public about the FTR Act and AML/CTF Act. Question 6 Defining the Stages Identify the stage in the money laundering process where funds are being constantly moved or re-characterised to conceal their origins. This stage is known as: a) placement b) layering c) integration Question 7 The Spence Network Case In the Spence Network case, which of the following statements best describes the integration stage? a) The funds from the accounts belonging to the money launderers were used to purchase assets and invest in business ventures. b) The funds were transferred from the New York accounts to various European financial institutions including a Swiss bank. c) With the help of the lawyers and the assistant bank manager, the illegal cash funds were deposited into various bank accounts in New York. Question 8 Three Degrees of Detection At which of the three stages of money laundering is it generally easiest to detect money laundering activity? a) Placement b) Layering c) Integration
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Placement Techniques
Placement is the first stage of the money laundering process, in which illegal funds or assets are first brought into the financial system. In this module we will look at the different placement techniques: smurfing and structuring alternative remittance electronic transfer asset conversion bulk movement gambling insurance purchase
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Smurfing and structuring

Smurfing is a common placement technique. Cash from illegal sources is divided between 'deposit specialists' or 'smurfs' who make multiple deposits into multiple accounts (often using various aliases) at any number of financial institutions. In this way, money enters the financial system and is then available for layering. Suspicion is often avoided as it is difficult to detect any connection between the smurfs, deposits and accounts. Structuring involves splitting transactions into separate amounts under AUD10,000 to avoid the transaction reporting requirements of the FTR Act. Many money launderers rely on this placement technique because numerous deposits can be made without triggering the cash reporting requirements. However, it can backfire if an attentive financial institution notices a pattern of deposits just under the reportable threshold. This can lead to reporting such activity to AUSTRAC under the suspect transaction provisions of the FTR Act. Structuring is a criminal offence itself, as well as an indicator of other potentially illegal activity. Bankers should be on guard in situations involving frequent deposits of small amounts of money by individual clients or businesses where such activity is unexpected or unusual. This could indicate structuring!
Alternative remittance
Alternative remittance is a common placement technique. For example: 1. Larry Launder brings a large sum of illegal cash to an alternative remittance provider. Larry specifies the identity and location of the recipient and the alternative remittance provider arranges for the funds to be sent overseas. Larry may or may not receive a receipt for the transaction. 2. The recipient, Sally Simple, goes to the counterpart of the alternative remittance provider in the overseas location. The counterpart provides the specified amount of cash (less any transfer charges) to Sally. Again, no documents may be involved. Alternative remittance refers to funds transfer services usually provided within ethnic community groups and known by names particular to each culture. Generally such services accept cash, cheques or monetary instruments in one location and pay an equivalent amount to a beneficiary in another location. In some communities this form of money transfer is commonly known as hawala, hundi, chuyen tien, yok song geum, or pera padala. These are mostly person-to-person transfer systems that involve minimal documentation, if any. Alternative remittance is also known as underground or parallel banking. There are large networks of these systems in operation around the world. The larger networks are prevalent in South East Asia, Latin America, North America and the Middle East. Alternative remittance systems predate the
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mainstream banking system and have been used in China and India for centuries. After the terrorist attacks of 11 September 2001, these systems have come under intense scrutiny as avenues for the transfer of money by terrorist groups. These services are used to transfer both legal and illegal money. In many countries, the Western-style banking systems are under developed. Alternative remittance services have been called upon to ordinary people, workers, travellers and immigrants to transfer legal funds to their families and business counterparts. However, these alternative systems can also be used by tax evaders, terrorists, money launderers and other criminals. In Australia, remittance service providers have obligations as regulated entities under the FTR Act and AML/CTF Act. From December 2006 they have also been required under the AML/CTF Act to register with AUSTRAC (see Remittance Providers Registration for further information). Although alternative remittance systems enable the successful transfer of funds across countries or regions, this is just the first step in placing the money. The recipients of the funds have to find ways of placing these funds in financial institutions at their end.
Electronic transfer
Electronic transfer is a common placement technique. 1. Larry Launder takes cash to an electronic funds transfer agency such as Xpress Transfers and requests a transfer of funds to Sally Simple in the United Apple. 2. Sally Simple goes to the Xpress Transfers branch in the United Apple, presents her identification and collects the funds. In the money laundering context, this technique involves the transfer of money through electronic payment systems that do not require sending funds through formal bank accounts. This method is also known as wire transfer. Electronic transfers are similar to alternative remittances in that both are person-to-person transfers that do not require sending funds through the formal banking system. Criminals make use of the electronic financial system because it enables the transfer of large denominations of money instantly to offshore jurisdictions. This speedy disbursement of funds to and between foreign jurisdictions makes the transactions difficult to investigate and trace back to the source.
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Asset conversion
Asset conversion is a common placement technique. 1. Karl Krook gives cash from his illegal operations to a trusted friend. 2. The friend uses the cash to purchase diamonds from his friendly jeweller and hands these diamonds over to Karl. Asset conversion simply involves the purchase of goods. Illegal money is converted into other assets, such as real estate, diamonds, gold and vehicles, which can then be sold. Generally, money launderers prefer to purchase high-value items that are small and easy to sell or transport to another country. Often these assets will be purchased in the name of a friend to avert suspicion. An example of asset conversion is the use of the international gold trade to launder illegal funds. Gold has become a particularly important money laundering tool because it is a readily acceptable medium of exchange, it offers anonymity and the market for gold is liquid and active globally. Gold is one of the few commodities which act very much like currency.
Bulk movement
Bulk movement is a common placement technique. 1. Karl Krook generates a large amount of cash from his illegal business in the Republic of Watermelon. He boxes a large stack of cash among the watermelons. 2. The cash and watermelons are transported across to the United Apple as part of a larger export shipment of watermelons. Bulk movement involves the physical transportation and smuggling of cash and monetary instruments, such as money orders and cheques. Often money launderers use their cash to purchase less bulky items such as diamonds, gold or even collector's stamps and other expensive goods. The criterion is that the items must be of high value and small, making them physically easy to smuggle as well as relatively easy to reconvert into cash at the point of destination. Bulk shipments of illegally obtained funds (or goods acquired with the funds) are smuggled across borders concealed in private vehicles, commercial trucks and air and maritime cargo. They may also be carried by couriers travelling on commercial airlines, trains and buses. Further, they can also be sent through parcel delivery and express mail services. The simplest bulk movement method is to smuggle the cash out of one country into another country that does not have currency regulations or where the regulations are not enforced.
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Note that, like alternative remittance, bulk shipment is the first step in placing the money. Once the funds or assets have been successfully transported, they still need to be placed into the financial system.
Gambling
Gambling is a common placement technique. 1. Fraudulent Freddie and friends make periodic visits to a local club where they insert illegal money into gaming machines. 2. After spending an evening enjoying the local band and night life, they cash out their money. This money can now be justified as winnings from the local club. Gambling is used to launder money by inserting illegal money into gaming machines. The money inserted can be cashed out and treated as proceeds from gambling. Funds that appear to be winnings can easily be used to justify unusual spikes in income. This income can then be deposited into a legitimate bank account. Like smurfing, gambling is a popular placement technique because amounts less than AUD10,000 are not subject to mandatory reporting requirements in Australia. The FTR Act does require cash dealers to lodge a suspect transaction report should a clients behaviour raise suspicion. However, these reporting requirements do not apply at all in many foreign jurisdictions. Other types of gambling techniques include: claiming gaming machine prizes/payouts whilst not being the legitimate prize-winner (that is, not the player who has accumulated the subject credits or turnover). exchanging cash for or purchased gaming prizes/payouts from legitimate prize winners. exchanging cash for prize-winning cheques. This may be coordinated by spotters who look for winners. They target problem gamblers who may want their winnings straight away and are willing to receive 95% of the face value of the ticket. exchanging cash for prize-winning gaming machine tickets. negotiating cash loans to other members/patrons for the purposes of gambling. engaging in activity that may otherwise be considered illegal or contrary to responsible gambling activities. For example, some machines pay a 98% return. Patrons may work in groups on networked machines, cover as many betting options as possible and win as a group.
Note: many Australian casinos have implemented anti-money laundering strategies to prevent them from being used as a conduit. For example, when patrons convert chips to winnings they are provided with a cheque endorsed with a stamp declaring whether the chips were winnings or non-winnings.
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Under the FTR and AML/CTF Acts regulated entities such as casinos, pubs and clubs, bookmakers and TABS (both on-course and off-course) have obligations such as: customer identification completing a significant cash transaction report, using forms tailored to the betting and casino sectors (under the FTR Act).
Customer identification Under the AML/CTF Act reporting entities must identify customers where an individual bets or receives AUD10,000 or more (including gambling chips, tokens). Significant cash transaction report (SCTR) Under the FTR Act, SCTRs need to be reported by casinos, TABs, Totes, and bookmakers for betting transactions involving AUD10,000 cash or more (or the foreign equivalent).
Insurance purchase
Insurance purchase is a common placement technique. 1. Watermelon Life Insurance sells life insurance products through a large number of independent agents including Twisted Spoon Insurance Brokers. Larry Launder buys life insurance policies from Twisted Spoon Insurance Brokers. 2. Larry Launder later redeems these policies and requests that the funds be transferred to a bank account. Illegal money is used to buy insurance policies and instruments, which can be 'cashed in' at a later date. The end result is that the illegal funds have been legitimised by being washed through a legitimate insurance business. Single premium insurance products can be particularly vulnerable. They involve a single payment 'up-front' and the ability to immediately purchase a fully paid instrument. To a money launderer, these products are attractive because they: involve a one-time payment have a cash surrender value may be transferable.
Insurance is sold through many channels. Any of these channels may be tapped by money launderers to place illegal funds.
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Summary
This is the first stage of money laundering. At this stage, illegal funds or assets are first brought into the financial system. This placement makes the funds more liquid. For example, if cash is converted into a bank deposit, it becomes easier to transfer and manipulate. Money launderers place illegal funds using a variety of techniques, which include depositing cash into bank accounts and using cash to purchase assets.
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Placement Techniques Quiz

This quiz will test your understanding of placement techniques. Question 1 Placement techniques Select the correct response. At the placement stage: a) illegal funds are brought into the financial system. b) funds are made available for activities such as investment in businesses. c) funds in the financial system are moved and dispersed to disguise their origin. Question 2 Placement Techniques Identify the placement technique used in the following money laundering scenario. A drug dealer provides cash to an informal transfer agent in Central NSW. The agent's counterpart makes a corresponding cash payment to the dealer's accomplice in Asia. This placement technique is known as: a) smurfing b) alternative remittance c) electronic transfer d) bulk movement Question 3 Placement Techniques Identify the placement technique used in the following money laundering scenario. An accountant from Queensland goes to a casino in Macau with illegal money and converts it into chips. He then later emerges with a large amount of 'winnings'. This placement technique is known as: a) assets conversion b) insurance purchase c) alternative remittance d) gambling
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Question 4 Placement Techniques Identify the placement technique used in the following money laundering scenario. The manager of an illegal gambling operation in South Australia deposits cash amounts in the range $5,000 to $8,000 into various bank accounts. This placement technique is known as: a) bulk movement b) asset conversion c) structuring d) gambling Question 5 Placement Techniques Identify the scenario that uses the placement technique of electronic transfers. a) A drug smuggler in Western Sydney purchases diamonds using cash. b) The owner of a front business buys single-premium, redeemable insurance policies for a number of key employees. c) The manager of an employment agency regularly transfers money from Tasmania to the Philippines via a money transfer company. d) A drug dealer in Western Australia exchanges cash for the prizewinning gaming machine tickets of players in a large gaming venue. Question 6 Placement Techniques Identify the placement technique used in the following money laundering scenario. An airline passenger smuggles a large batch of traveller's cheques into England in his checked luggage. This placement technique is known as: a) smurfing b) bulk movement c) asset conversion d) insurance purchase
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Question 7 Placement Techniques Identify the placement technique used in the following money laundering scenario. A foreigner makes a down payment in cash to purchase an apartment in Monaco. The rest of the payment is made through financing arranged by his offshore company. This placement technique is known as: a) asset conversion b) gambling c) alternative remittance d) insurance purchases Question 8 Placement Techniques Identify the placement technique used in the following money laundering scenario. A gardener uses illegal money to buy insurance policies that can be later cashed out. This placement technique is known as: a) asset conversion b) alternative remittance c) insurance purchase d) gambling
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Layering Techniques
Layering is the second stage of the money laundering process, in which illegal funds or assets are moved, dispersed and disguised to conceal their origin. Funds can be hidden in the financial system through a web of complicated transactions. We will look at the different techniques of layering in this module: electronic funds transfers offshore banks shell corporations trusts walking accounts intermediaries
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Electronic funds transfers

The use of electronic funds transfers is a common layering technique. Typically, layers are created by moving money through electronic funds transfers into and out of domestic and offshore bank accounts of fictitious individuals and shell companies. Given the large number of electronic funds transfers daily and the sometimes limited information disclosed about each transfer, it is often difficult for authorities to distinguish between clean and dirty money.
Offshore banks
Using offshore banks is a common layering technique. 1. Banana Bank in the United Apple allows for the establishment of accounts from non-residents. Larry Launder, a non-resident of the United Apple, has numerous accounts with Banana Bank in the names of different companies and individuals. Larry is a resident of the Republic of Watermelon. 2. Funds from illegal activities in the Republic of Watermelon are placed into Larrys accounts with Banana Bank using different placement techniques. 3. Once the funds are placed, Larry Launder instructs Banana Bank to make various transfers and payments, thereby distancing the funds from their origins. Offshore banks are banks that allow for the establishment of accounts from non-resident individuals and corporations. A number of countries have well-developed offshore banking sectors. In some cases, these banking sectors follow loose anti-money laundering regulations. Offshore banks are popular with money launderers (for layering funds), tax evaders and corrupt officials. Money launderers also like to keep funds in offshore banks because their fixed term deposit accounts provide interest income. In contrast, a shell bank is incorporated in and authorised to carry out on banking business in a foreign country, but does not have a physical place of business or any employees in that country. Some offshore centres combine loose anti-money laundering procedures with strict bank secrecy rules. Criminals can easily maintain and transfer funds from banks in these centres because details of client activities are generally denied to third parties, including most law enforcement agencies. The financial centres that host offshore banks can be very large and help facilitate many illegitimate cross-border financings. For example, the Cayman Islands are estimated to be the fifth largest financial centre in the world.
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Shell corporations
Using shell corporations is a common layering technique. 1. Larry Launder sets up Apricot Trading Co. under the laws of the United Apple. 2. Apricot Trading Co. opens bank accounts with various banks. 3. Smurfs working for Larry Launder transfer illegal funds to the Apricot Trading Co. accounts. 4. Apricot Trading Co. transfers these funds to other accounts or invests them in securities. A shell corporation is a company that is formally established under applicable corporate laws but does not actually conduct a business. Instead, it is used to engage in fictitious transactions or hold accounts and assets to disguise the actual ownership of these accounts and assets. Sophisticated money launderers use a complex maze of shell corporations in different countries. Most money transfers take place through these shell corporations. At times, money is transferred through numbered accounts rather than through named accounts. To further avoid unwanted attention, money launderers build the transaction history of the shell corporation so that it looks as if it has been in business for a long time. In many countries (particularly offshore banking centres), the reporting and record-keeping requirements for corporations are quite minimal, which makes it easy to disguise ownership of the corporation. In a number of countries, ownership in corporations can be represented by 'bearer shares. In these corporations, the holder of the bearer share certificate is regarded as the owner of the shares. This makes it easy to disguise and transfer ownership.
Trusts
Using trusts is a common layering technique. 1. Larry Launder establishes a business trust by appointing a corporate trustee and drawing a deed of trust, which names Apricot Trading Co. as a beneficiary. 2. Larry transfers funds to the corporate trustee and under the deed of trust, Apricot Trading Co. is empowered to directly use and invest the funds. Trusts are legal arrangements for holding funds or assets for a specified purpose. These funds or assets are managed by a trustee for the benefit of a specified beneficiary or beneficiaries.
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Trusts can act as layering tools because they enable the creation of false paper trails and transactions. Trusts are principally governed by a deed of trust drawn up by the person who establishes the trust. Trusts are more complex to use than corporations, but they are less regulated. The private nature of trusts makes them attractive to money launderers. Secrecy and anonymity rules help conceal the identity of the true owner or beneficiary of trust assets. Also, the presence of a corporate trustee provides an appearance of legitimacy. In addition, offshore trusts may contain a 'flee clause. This clause allows the trustee to shift the controlling jurisdiction of the trust if it is in danger because of war, civil unrest or, more likely, the activities of law enforcement officers or litigious investors and consumers. Typically, trusts are used in combination with corporations in money laundering schemes. Trusts are used less frequently than corporations because of their complexity and their disuse in business transactions.
Walking accounts
Using walking accounts is a common layering technique. 1. Using shell corporations, Larry Launder sets up three accounts with three different banks. He provides instructions to transfer all funds immediately on receipt to one or more of the other accounts. 2. Smurfs deposit cash into the first account. Without the need for further action, the funds are 'layered' by being transferred to the third account. A walking account is an account for which the account holder has provided standing instructions that all funds be transferred immediately on receipt to one or more other accounts. By setting up a series of walking accounts, criminals can automatically create several layers as soon as any funds transfer occurs. Money launderers use this layering technique because it is extremely difficult to detect and money moves very fast through accounts across the world. Due to these reasons, walking accounts create substantial investigation hurdles for regulators. The term 'walking account' was coined because the money in these accounts appears to 'walk away.
Intermediaries
The use of intermediaries is a common layering technique. 1. Larry Launder transfers funds to a special account for client funds maintained by the law firm Shady & Hustler. 2. Shady & Hustler establishes a shell corporation, Apricot Trading Co., which opens various bank accounts. Shady & Hustler now transfers Larry's funds into these accounts.
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Lawyers, accountants and other professionals may be used as intermediaries between the illegal funds and the criminal. Professionals engage in transactions on behalf of a criminal client who remains anonymous. These transactions may include the use of shell corporations, fictitious records and complex paper trails. Money launderers like to use intermediaries because they lend credibility and decrease suspicion. In addition, these professionals generally have confidentiality obligations to their clients so the risk of money launderers getting caught is low. Many countries have realised that criminals are increasingly using nonfinancial professionals as intermediaries. To counter these activities, many countries have included non-financial professionals in new anti-money laundering legislation.
Summary
This is the second stage of money laundering. To conceal the illegal origin of the placed funds and thereby make them more useful, the funds must be moved, dispersed and disguised. The process of distancing the placed funds from their illegal origins is known as layering. At this stage, money launderers use many different techniques to layer the funds. These include using multiple banks and accounts, having professionals act as intermediaries and transacting through corporations and trusts. Funds may be shuttled through a web of many accounts, companies and countries in order to disguise their origins.
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Layering Techniques Quiz

This quiz will test your understanding of layering techniques. Question 1 Layering Select the correct response. Hayley deposits her illegal funds into her lawyers trust account. The lawyer then acts as an intermediary transferring the funds into several accounts opened for a shell corporation to assist Hayley in hiding the funds. This is: a) known as layering b) known as placement Question 2 Recognising Layering Identify the layering technique used in the following money laundering scenario. A Victorian drug ring sets up three companies in a Caribbean country. Funds are transferred between these companies and then on to other beneficiaries. This layering technique is known as using: a) offshore banks b) trusts c) shell corporations d) walking accounts Question 3 Recognising Layering Identify the layering technique used in the following money laundering scenario. Smurfs working for an illegal French gambling network deposit cash into numerous accounts. The banks have standing instructions to transfer funds to other 'numbered' accounts. This layering technique is known as using: a) offshore banks b) intermediaries c) shell corporation d) walking accounts
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Question 4 Recognising Layering Identify the scenario that uses the offshore banks layering technique. a) A Middle Eastern accounting firm instructs its correspondent in the Isle of Man to set up a company for a client and arranges for payment of all expenses. b) A corporate and trust management company in the Channel Islands sets up a trust on behalf of a corporate client who uses the trust to purchase an office building in London. c) A Hong Kong smuggling operation transfers funds regularly to a bank based in Bermuda and uses these funds to pay for the purchase of goods and services around the world. d) Larry Launder's Apricot Trading Co. establishes a subsidiary in the Republic of Watermelon and transfers funds to this subsidiary. Question 5 Recognising Layering Identify the layering technique used in the following money laundering scenario. A law firm purchases shares in a company based on instructions from a client and transfers funds from the clients escrow accounts to the seller as payment. This layering technique is known as using: a) intermediaries b) shell corporation c) walking accounts d) trusts
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Question 6 Recognising Layering Identify a layering technique used in this case. A drug trafficker uses his illicit money to buy a small shop building. He pays for the building partly in cash and partly through mortgage financing arranged by a shell corporation that he controls. He then sells the building to another shell corporation controlled by him. No money transfer occurs. The second corporation then sells the building to an innocent third party retail business for the original purchase price. The third party pays the purchase price into the second corporation's offshore account with a foreign bank. This layering technique is known as using: a) cash payment b) asset conversion c) intermediaries d) trusts e) shell corporations Question 7 Layering Trusts are legal arrangements for holding funds or assets for a specified purpose. These funds or assets are managed by a trustee for the benefit of a specified beneficiary or beneficiaries. Indicate whether the following statement is True or False. Trusts can act as a layering tool because they enable creation of false paper trails and transactions?
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Integration Techniques
Integration is the third stage of the money laundering process, in which the illegal funds or assets are successfully cleansed and appear legitimate in the financial system, making them available for investment, saving or expenditure. We will look at the different integration techniques in this module: credit and debit cards consultants corporate financing asset sales and purchases business recycling import/export transactions
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Credit and debit cards

The use of credit and debit cards is an integration technique. 1. Credit cards: Larry Launder transfers illegal funds into an offshore bank account. He also signs up for a credit card from the bank. 2. Debit cards: Larry Launder transfers illegal funds into an offshore bank account. He also signs up for a debit card from the bank. 3. Larry Launder uses the credit card or debit card to make payments for purchases and transactions around the world. Credit and debit cards are efficient ways for money launderers to integrate illegal money into the financial system. By maintaining an account in an offshore jurisdiction through which payments are made, the criminals limit the financial trail that leads to their country of residence. In recent years, authorities have grown more attuned to the use of offshore credit cards as a money laundering technique. As a result, certain offshore jurisdictions now enable regulators to obtain from banks all records of transactions made by their credit card clients.
Consultants
Consultancy arrangements can cover a wide range of non-quantifiable services and are often used to integrate illegal funds into the legitimate financial system. 1. Larry Launder sets up a shell corporation and a related bank account in an offshore jurisdiction. The shell corporation hires a consultant. 2. The consultant performs services and makes payments for the shell corporation. The consultant is paid by the shell corporation. The use of consultants in money laundering schemes is quite common. The consultant might not even exist. For example, the criminal could actually be the consultant. In this case, the criminal is channelling money back to him/herself. This money is declared as income from services performed and can be used as legitimate funds. In many cases, the criminal will employ an actual consultant (e.g. accountant, lawyer or investment manager) to do some legitimate work. This could involve purchasing assets. Often, the criminal transfers funds to the consultant's client account from where the consultant makes payments on behalf of the criminal.
Corporate financing
Corporate financing offers a flexible way to transfer money between companies. This technique is often used in sophisticated money laundering schemes.
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1. Larry Launder sets up a shell corporation and a related bank account in an offshore jurisdiction. He also sets up a legitimate business in his country of residence. 2. Using illegal money in the offshore account, the shell corporation makes a business loan to or equity investment in, the legitimate business. Corporate financing is typically combined with a number of other techniques, including the use of offshore banks, consultants, complex financial arrangements, electronic funds transfers, shell corporations and actual businesses. This allows money launderers to integrate very large amounts of money into the legitimate financial system. Money launderers may also take a tax deduction on interest payments made by them in corporate financings! From appearances alone, such transactions are identical to legitimate corporate finance transactions. Financial service professionals serving legitimate businesses need to look closely to find peculiarities in their dealings, such as: large loans by unknown entities financing that appears inconsistent with the underlying business unexplained write-offs of debts
Asset sales and purchases

To integrate illegal funds into a legitimate financial system, money launderers often resort to actual or fictitious sales and purchases of assets. 1. Larry Launder sets up a shell corporation and a related bank account in an offshore jurisdiction. He also owns or controls a legitimate business or real estate asset in his country of residence. 2. The shell corporation purchases the business or real estate at an inflated price. The earnings from this transaction are treated as legitimate profits. This technique can be used directly by the criminal or in combination with shell corporations, corporate financing and other sophisticated methods. The end result is that the criminal can treat the earnings from the transaction as legitimate profits from the sale of the assets. Around the world, real estate sales and purchases are a favoured method of integrating illegal money.
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Business recycling
Business recycling is a common integration technique in which illegal funds are mixed with cash flow from a seemingly legitimate business. 1. Larry Launder owns or controls a legitimate, cash-intensive car wash business. 2. Larry deposits illegal funds into the business. These funds are treated as revenue from the legitimate business. Legitimate businesses that also serve as conduits for money laundering are referred to as 'front businesses. Cash-intensive retail businesses are some of the most traditional methods of laundering money. This technique combines the different stages of the money laundering process. The principal requirement when using businesses as fronts is that they have high cash sales and/or high turnover. This way it becomes easy for criminals to merge illegal funds and difficult for the authorities to spot the scheme. An important indicator of front businesses is the relation between the size and nature of the business and the amount of revenue it generates. For example, if a newspaper stand starts making deposits into its bank account at $1 million a month, this should alert the bank to the possibility of illegal activity.
Import/export transactions
Import/export transactions are a common integration technique used by money launderers, especially in order to move illegal funds between countries. 1. Larry Launder sets up an import company in a foreign country as well as an export company in his country of residence. 2. The export company exports goods to the foreign import company. The import company remits illegal funds to pay for the goods on an overinvoiced basis. To bring 'legal' money into the criminal's country of residence, the domestic trading company will export goods to the foreign trading company on an over-invoiced basis. The illegal funds are remitted and reported as export earnings. The transaction can work in the reverse direction as well. In many cases, there is no actual export of goods or only the export of fake goods. In such cases, the trading companies may also exist only on paper. Bankers may be able to spot these transactions if the underlying trade documentation is inadequate or the underlying pricing is incorrect.
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Summary
This is the final stage of money laundering. Once the funds are layered and distanced from their origins, they are made available to criminals to use and control as apparently legitimate funds. This final stage in the money laundering process is called integration. The laundered funds are made available for activities such as investment in legitimate or illegitimate businesses, or spent to promote the criminal's lifestyle. At this stage, the illegal money has achieved the appearance of legitimacy.
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Integration Techniques Quiz

This quiz will test your understanding of integration techniques. Question 1 Characterising Integration Select the correct response. Integration: a) can not happen without layering b) can occur without layering Question 2 Characterising Integration Select the correct response. At the integration stage illegal money is a) difficult to trace b fairly easy to trace
Question 3 Characterising Integration Identify the integration technique used in the following money laundering scenario. A Canberra-based smuggling group sets up a company and transfers the title of an office building to this company. A related offshore company buys the office building for a substantial premium. The sales price is recorded as return of investment plus profit. This integration technique is known as using: a) credit and debit cards b) consultants c) corporate financing d) asset sales and purchases Question 4 Characterising Integration Identify the integration technique used in the following money laundering scenario. An Indonesian smuggling group controls a retail chain in Java. Money from the smuggling operations is mixed in with the retail chain's cash flow and recorded as sales revenue. This integration technique is known as using: a) corporate financing b) asset sales and purchases c) business recycling d) import/export transactions
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Question 5 Characterising Integration Identify the integration technique used in the following money laundering scenario. A Middle Eastern trading company has a juice processing plant in an export zone. It sells juice to a company owned by a European drug cartel at a large premium. The revenue is treated as export revenue. This integration technique is known as using: a) consultants b) import/export transactions c) business recycling d) corporate financing Question 6 Characterising Integration Identify the integration technique used in the following money laundering scenario. A Chinese entrepreneur brings a number of debit cards with large balances into Singapore. The entrepreneur sets up a bank account and has the stored value on the cards transferred into the account. This integration technique is known as using: a) corporate financing b) asset sales and purchases c) business recycling d) credit and debit cards Question 7 Characterising Integration Identify the integration technique used in the following money laundering scenario. A reputable but struggling French company engages a merchant bank to raise 40% of the funds needed for a corporate restructuring. The company arranges the remaining 60% of the financings through a loan made by an offshore finance company. This integration technique is known as using: a) corporate financings b) asset sales and purchases c) consultants d) import/export transactions
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Question 8 Characterising Integration Identify the scenario that uses the integration technique consultants. a) Trisha Lim runs a narcotics distribution ring in Hong Kong. She also earns and declares substantial revenue from an investment advisory business although the business has no apparent customer base. b) A Singapore export-import firm exports machine tools to the United States. The firm has a large number of unsecured international accounts payable, which it discounts with an offshore finance company. c) A US company runs a chain of restaurants with slowly declining sales, but high cash flow levels. The chain is sold to a newly established company, which does not require any acquisition financing and appears to have a big hoard of money. Question 9 Characterising Integration Select the single correct answer. A single money laundering technique: a) can combine elements of placement, layering and integration. b) will use either placement, layering or integration, but will not combine them. Question 10 Characterising Integration Indicate whether the following statement is True or False. Businesses which are highly suited for integration through business recycling include newspaper stands, laundromats, video games arcades, bars and restaurants.
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Terrorism Financing
Objectives
In this module, we will address the following questions: What is terrorism and terrorism financing? What are the trends in terrorism? What are the principal uses and sources of money by terrorist organisations? What are the principal methods used by terrorist organisations to transfer money? What are the principal types of activities relating to terrorists and their assets? What are the Financial Action Task Forces 9 Special Recommendations?
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What is terrorism and terrorism financing?

Terrorism is a global problem. Terrorism is the unlawful use, or threatened use, of force or violence against individuals or property to intimidate or coerce governments or societies, often to achieve political, religious or ideological objectives. Terrorism financing can be raised by legitimate sources such as fundraising activities and business profits, as well as illegitimate sources such as the drug trade and fraud. The fight against terrorism financing requires an understanding of the way terrorist organisations obtain their money and its use.
Trends in terrorism
After the events of September 11, 2001, awareness of terrorist activity around the world has grown, such as its international impact and ideological orientation. To disrupt terrorism financing we need to understand it. Terrorist activity is escalating in frequency, scale, geographical reach and types of targets. Terrorist organisations are driven by several motives which are also used in recruitment. Motives include: change relating to social, religious or political change religious political revenge symbolism
Terrorist organisations are increasingly structured as a loosely organised and self-financed international network. Terrorist groups may differ depending on the nature of their threats.
The role of money

Terrorist organisations need money to: recruit and sustain: money is needed to recruit, support, train, transport, house, compensate and equip terrorist agents. acquire influence: money is needed to sustain media campaigns and win political support. build the support base: money is needed for educational and social programs to win members and create a support base. carry out terrorist activity.
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Their success in accessing and deploying this money has disastrous results! Terrorist organisations do not require a lot of money to achieve disastrous results.
The September 11 attack cost AUD600,000 to execute. The Bali attack cost AUD60,000 to execute. The Madrid attack cost AUD12,000 to execute. The London bombings cost less than AUD18,000 to execute.
Sources of money
Even though terrorist groups have similar qualities their sources of money may differ. Terrorist organisations obtain money from a number of legitimate and illegitimate sources, such as the following: Illegal activities: Terrorists obtain funds from illegal activities such as drug trafficking, smuggling, kidnapping and extortion. Drug trafficking is particularly lucrative. In Latin America, 'narco-terrorists' obtain much of their money from the drugs trade. Wealthy Sponsors: Terrorists may receive funds from wealthy individual or sponsors which can support their terrorist activities. Charitable and religious institutions: Legitimate charitable and religious institutions can be a source of funding for terrorists. They are ideal conduits because they are very lightly regulated and do not need to provide a commercial justification for their activities. Commercial enterprises: Terrorist organisations may run or own otherwise legitimate commercial enterprises to generate profits and commingle illegal funds. These include jewellery businesses, trading companies, convenience stores, real estate ventures and investment management firms. State sponsors: A number of rogue nations have been known to provide assistance, financial support and safe harbour to terrorist organisations. A prime example of this was Afghanistan under the Taliban regime. Because a large amount of funding for terrorist activities comes from legitimate sources, terrorism financing is sometimes depicted as the reverse of traditional money laundering. Instead of illegal money being 'washed' to make it legal, terrorism financing often involves the task of filtering legitimate funds into terrorist hands.
Moving terrorist money

The methods used by terrorists to move money are substantially the same as those used by other criminals, such as:
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Traditional financial institutions: Often, individual accounts are opened and small withdrawals and deposits of less than AUD10,000 are made in order to avoid the reporting requirements of Australian anti-money laundering and counter-terrorism financing legislation. Alternative remittance systems: Unregulated remittance systems such as 'Hawala' and 'Hundi' are extensively used to transfer funds without any documentation. Currency transfers: Cash is smuggled across borders, particularly through land crossings and sea shipments. Trade financing: With the growth of terrorist-owned commercial firms, trade finance is increasingly being used.
September 11 Case
The United States Federal Bureau of Investigation (FBI) uncovered some of the financing techniques used by the 9/11 (September 11, 2001) terrorist. To download a profile developed by the FBI of the 24 US bank accounts opened by the 9/11 terrorist, press 'Download' below.
Download
Accounts: The 9/11 terrorist opened a set of 24 accounts at a bank in the United States using false identities, social security numbers and documents. Comment: The theft of personal identity information is a common method used by terrorists and criminals to operate in the legitimate system. Benefactors: About US$325,000 was deposited into such accounts from benefactors in the Middle East. Comment: In many cases, once the account is opened, the terrorist brings in money from the legitimate system using wire transfers. Debit cards: The terrorist also used debit cards issued by foreign banks to finance their activities in the United States. Comment: Debit cards are used by criminals because (unlike cash) they are a discreet way to store value and (unlike credit cards) they do not leave much of a trail.
Responses to 9/11
The 9/11 attacks galvanised international bodies and governments into responding more effectively to the global threat of terrorism. To download a chart describing some of the key initiatives around the world and in the region, press 'Download' below.
Download
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Australian fight against terrorism

The Australian approach to fighting terrorism is based on strong cooperative, coordinated and consultative relationships between the state and territory governments, the Australian Government and their departments and agencies. For more information visit www.nationalsecurity.gov.au Australia's fight against terrorism includes implementation of United Nations Security Council Resolution 1373. For information regarding AUSTRACs Information Circular No. 40, which refers to the Charter of the United Nations (Anti-terrorism Persons and Entities) List, follow the link given above. Resolution 1373: member states are obligated to take specified actions to suppress terrorism. 2002 Act and Regulations: in compliance, Australia implemented the Charter of the United Nations (Terrorism and Dealings with Assets) Regulations 2002. Requirements: Under these regulations, it is a criminal offence: 1. For persons to hold or use assets (freezable assets) that are owned or controlled by persons or entities on the Department of Foreign Affairs and Trade (DFAT) list; and 2. To make assets available to persons or entities on the DFAT list. Penalties: The penalty for the proscribed activities is 5 years imprisonment.
Financial Action Task Force (FATF) 9 Special Recommendations:

1. Ratification and implementation of UN instruments Each country should take immediate steps to ratify and to implement fully the 1999 United Nations International Convention for the Suppression of the Financing of Terrorism. Countries should also immediately implement the United Nations resolutions relating to the prevention and suppression of the financing of terrorist acts, particularly United Nations Security Council Resolution 1373. 2. Criminalising the financing of terrorism and associated money laundering Each country should criminalise the financing of terrorism, terrorist acts and terrorist organisations. Countries should ensure that such offences are designated as money laundering predicate offences.
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3. Freezing and confiscating terrorist assets Each country should implement measures to freeze without delay funds or other assets of terrorists, those who finance terrorism and terrorist organisations in accordance with the United Nations resolutions relating to the prevention and suppression of the financing of terrorist acts. Each country should also adopt and implement measures, including legislative ones, which would enable the competent authorities to seize and confiscate property that is the proceeds of, or used in, or intended or allocated for use in, the financing of terrorism, terrorist acts or terrorist organisations. 4. Reporting suspicious transactions related to terrorism If financial institutions, or other businesses or entities subject to antimoney laundering obligations, suspect or have reasonable grounds to suspect that funds are linked or related to, or are to be used for terrorism, terrorist acts or by terrorist organisations, they should be required to report promptly their suspicions to the competent authorities. 5. International cooperation Each country should afford another country, on the basis of a treaty, arrangement or other mechanism for mutual legal assistance or information exchange, the greatest possible measure of assistance in connection with criminal, civil enforcement, and administrative investigations, inquiries and proceedings relating to the financing of terrorism, terrorist acts and terrorist organisations. Countries should also take all possible measures to ensure that they do not provide safe havens for individuals charged with the financing of terrorism, terrorist acts or terrorist organisations, and should have procedures in place to extradite, where possible, such individuals. 6. Alternative remittance Each country should take measures to ensure that persons or legal entities, including agents, that provide a service for the transmission of money or value, including transmission through an informal money or value transfer system or network, should be licensed or registered and subject to all the FATF Recommendations that apply to banks and nonbank financial institutions. Each country should ensure that persons or legal entities that carry out this service illegally are subject to administrative, civil or criminal sanctions. 7. Wire transfers Countries should take measures to require financial institutions, including money remitters, to include accurate and meaningful originator information (name, address and account number) on funds transfers and related messages that are sent, and the information should remain with the transfer or related message through the payment chain.
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Countries should take measures to ensure that financial institutions, including money remitters, conduct enhanced scrutiny of and monitor for suspicious activity funds transfers which do not contain complete originator information (name, address and account number). 8. Non-profit organisations Countries should review the adequacy of laws and regulations that relate to entities that can be abused for the financing of terrorism. Non-profit organisations are particularly vulnerable, and countries should ensure that they cannot be misused: by terrorist organisations posing as legitimate entities; to exploit legitimate entities as conduits for terrorist financing, including for the purpose of escaping asset freezing measures; and to conceal or obscure the clandestine diversion of funds intended for legitimate purposes to terrorist organisations
9. Cash couriers Countries should have measures in place to detect the physical crossborder transportation of currency and bearer negotiable instruments, including a declaration system or other disclosure obligation. Countries should ensure that their competent authorities have the legal authority to stop or restrain currency or bearer negotiable instruments that are suspected to be related to terrorist financing or money laundering, or that are falsely declared or disclosed. Countries should ensure that effective, proportionate and dissuasive sanctions are available to deal with persons who make false declaration(s) or disclosure(s). In cases where the currency or bearer negotiable instruments are related to terrorist financing or money laundering, countries should also adopt measures, including legislative ones consistent with Recommendation 3 and Special Recommendation III, which would enable the confiscation of such currency or instruments. To review all Financial Action Task Force 40 recommendations, click on the link above.
Summary
Terrorism financing can be raised by legitimate sources such as fundraising activities and business profits as well as illegitimate sources such as the drug trade and fraud. Terrorist organisations need money to support their activities.
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Terrorism Financing Quiz

This quiz will test your understanding of terrorism financing. Question 1 Terrorism Financing Choose the single correct response. Terrorism financing: a) mostly involves conversion of illegal money into legal funds and assets, similar to traditional money laundering. b) involves moving legitimate funds into the control of terrorist organisations. This is sometimes known as reverse money laundering. Question 2 Terrorism Financing Choose the single correct response. Because of heightened vigilance, most terrorist organisations are: a) increasingly becoming isolated and localised. b) forming global networks which are highly dispersed and difficult to detect. Question 3 Terrorism Financing Choose the single correct response. International wire transfers are: a) a significant method used by terrorist organisations to transfer money. b) not a method which is favoured terrorist organisations for transferring money. Question 4 Terrorism Financing Choose the single correct response. Charitable organisations are: a) not a significant conduit for terrorism financing. b) vulnerable as conduits for terrorism financing because of the low level of accountability and regulation over them.
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Question 5 Terrorism Financing Choose the single correct response. Most counter-terrorism regulations: a) are solely focused on prohibiting dealings with terrorist individuals and organisations. b) tend to have a broad scope, which includes proscribing financing activities by terrorist organisations. Question 6 Choose the single correct response. Terrorist groups: a) can obtain money from legitimate sources b) can only obtain money from illegitimate sources Question 7 Choose the single correct response. Terrorist organisations use alternative remitters to move their money. This is because: a) money can often be transferred without requiring or generating documentation b) organisations can deposit amounts of less than $10,000 into financial institutions to avoid the reporting obligations under the FTR Act. c) organisations can smuggle cash across borders, e.g. sea shipments. Question 8 Choose the single correct response. Australias fight against terrorism includes: a) banning all international wire transfers. b) major reforms to Australian legislation including the passing of the AML/CTF Act. c) requiring all banks to be licensed by AUSTRAC.
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Question 9 Choose the single correct response. The Financial Action Task Force (FATF), a global inter-governmental body, has created 40 + 9 recommendations to develop and promote international policies and best practice to combat money laundering and terrorism financing. Which statement is correct? a) Australia is excluded from the 40 + 9 recommendations as Australia has not been affected by terrorism. b) Terrorism financing in Australia is legal, therefore it is exempt from the FATF recommendations. c) Australia is a member of FATF and is working to adopt FATFs recommendations in legislation such as the AML/CTF Act.
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Know Your Customer
Objectives
In this module, we will address the following questions: What is a know your customer (KYC) policy? What are the principal elements and requirements of a KYC policy? What are the risks of not implementing a KYC policy?
Your key learning objectives will be to correctly answer each of the questions listed above.
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What is KYC?
We will begin by making sure we have a common understanding of the definition of know your customer (KYC) policy and the objectives of implementing this type of policy. It is critical for financial institutions, professionals working within the financial sector, bullion and gambling sectors as well as other regulated entities to know their customers very well. Financial institutions and other reporting entities should have a proper understanding of their customers to satisfy their respective KYC obligations. It is equally important that employees of these organisations are properly trained regarding the importance of KYC and the specific KYC policies or procedures of their organisation. KYC is important for a number of other reasons. For example, if a business knows its customers well, it may be able to prevent damage to its reputation and avoid fraud or excessive risk in financial transactions involving customers. Under AML/CTF legislation, KYC policy refers to documentation which sets out a businesss approach to ensuring that it can effectively identify, verify and monitor its customers and the financial transactions in which they engage, relative to the risks of money laundering and terrorism financing. Note that Financial Service legislation also uses the term KYC, but this is not to be confused with KYC in AML/CTF. KYC in Financial Services legislation relates to the understanding of a clients financial position, not their risk of practicing ML/TF. For more information regarding KYC refer to: AML/CTF Programs module, and Chapters 1 and 4 of the AML/CTF Rules
The principal objectives of a KYC policy include:

ensuring that only legitimate and bona fide customers are accepted. ensuring that customers are properly identified and that they understand the risks they may pose. verifying the identity of customers using reliable and independent documentation. monitoring customer accounts and transactions to prevent or detect illegal activities. implementing processes to effectively manage the risks posed by customers trying to misuse facilities.
The Financial Transaction Reports Act 1988 (FTR Act) requires that, in connection with opening accounts and adding signatories, cash dealers must obtain:
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1. Account information, including details about the account holder. 2. Signatory information, to verify the identity of signatories (persons able to transact on the account). Commencing in December 2007, the Anti-Money Laundering and CounterTerrorism Financing Act 2006 (AML/CTF Act) will introduce new requirements for customer identification. Reporting entities must identify all customers before they provide a designated service to any customer, with a few exceptions, and regardless whether or not an account is involved. Refer to Part B of the AML/CTF Programs module for more information.
What risks are mitigated by KYC?

Let's take a brief look at the risks that can be mitigated by an effective KYC policy. There are five types of risks that an effective KYC policy can help to mitigate: reputational operational legal financial concentration
Reputational risk: The reputation of a business is usually at the core of its success. The ability to attract good employees, customers, funding and business is dependant on reputation. Even if a business is otherwise doing all the right things, if customers are permitted to undertake illegal transactions through that business, its reputation could be irreparably damaged. A strong KYC policy helps to prevent a business from being used as a vehicle for illegal activities. Operational risk: This is the risk of direct or indirect loss from faulty or failed internal processes, management and systems. In today's competitive environment, operational excellence is critical for competitive advantage. If a KYC policy is faulty or poorly implemented, then operational resources are wasted, there is an increased chance of being used by criminals for illegal purposes, time and money is then spent on legal and investigative actions and the business will be viewed as operationally unsound. Legal risk: If a business is used as a vehicle for illegal activity by customers, it faces the risk of fines, penalties, injunctions and even forced discontinuance of operations. Apart from regulatory risk, involvement in illegal activities could lead to third-party judgments and unenforceable contracts. In addition, professionals working within many financial and other professional sectors may also personally be subject to legal action or prosecution.
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Due to the nature of business, these risks can never entirely be eliminated. However, if a business does not have an effective KYC policy, it will be inviting legal risk. By strictly implementing and following a KYC policy, a business can mitigate legal risk to itself and its staff. Financial risk: If a business does not adequately identify and verify customers, it may run the risk of unwittingly allowing a customer to pose as someone they are not. The consequences of this may be far reaching. If a business does not know the true identity of its customers, it will also be difficult to retrieve any money that the customer owes. Concentration risk: This type of risk occurs on the assets side of a business if there is too much exposure to one customer or a group of related customers. It also occurs on the liabilities side if the business holds large concentrations of funds from one customer or group (in which case it faces liquidity risk if these funds are suddenly withdrawn). By implementing an effective KYC policy, a business can identify the entire scope of the asset and liability risk faced in relation to each customer and group of customers. As you can now appreciate, success within the financial sector and success as a professional business is critically dependant on developing and implementing sound KYC policies and avoiding the risks that customers may pose.
KYC policy elements

KYC policy has five major elements. We will take a brief look at each in turn. Customer acceptance: The point at which a new customer is accepted or rejected is the easiest point at which the risk of dealing with illegal money can be avoided. By following good customer acceptance policies, dealing with entities and individuals who might engage in illegal transactions can be avoided. Customer identification: Establishing the identity of customers is central to the KYC policy both for the customer acceptance or rejection decision and for the ongoing monitoring of customer accounts and transactions. By identifying customers effectively, the business is able to deal with them in the appropriate manner. Customer verification: Verifying that customers are who they say they are is vital to any customer identification procedure. Merely collecting customer information is not enough for an effective KYC policy. Reliable and independent documentation should be used to support and confirm the identification details a customer provides. For example, citing an original primary photographic identification document such as a passport or drivers licence.
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Accounts and transactions monitoring: In an effective KYC policy, customer accounts and transactions are properly classified in terms of risk and are regularly monitored. Through checks and thresholds, unusual activities, activities by high-risk customers, or suspicious behaviour can be detected and reviewed. Risk management: To ensure that the risks posed by money laundering and other criminal activities are identified, mitigated and managed good risk management practices are essential. For further information on risk management refer to the Australian Standard on Risk Management: AS4360. Another objective of the KYC policy is to look past the appearance of the customer and obtain visibility into the sources of the customer's money. The basic objective is to obtain an understanding of the risk the customer poses to business. Could the customer use the business to facilitate money laundering or terrorism financing?
Record Keeping
Under the AML/CTF Act, a reporting entity must make and retain a record of its applicable customer identification procedures. The records must be retained for seven years after the end of the reporting entity's relationship with the relevant customers. Within a designated business group, a reporting entity may undertake this obligation for other members of the group.
The Berlin-Edwards Case

The Berlin-Edwards story is a good case study of the problems that may arise if the KYC policy is not properly followed. Customer Referral: Lucy Edwards, a Vice President at the Bank of New York (BONY), introduces her husband, Peter Berlin, as a customer to the bank. Despite her role, Lucy fails to inform the bank of her relationship with Peter Berlin and the bank never questions the relationship. The referral details in the application form are left incomplete. Comment: If the KYC policy was being actively followed, one of the initial questions as part of the customer acceptance policy should have been What is your relationship with Lucy Edwards? This is because Lucy introduced Peter as a customer. It also appears that the lack of complete details on the application form was not reviewed. Accounts: Over a three-year period, Peter Berlin opens three accounts for three separate businesses. The three businesses do not engage in any business transactions. The only activity the accounts are used for is to receive funds transfers from Russian parties and to forward funds to offshore accounts or other individuals connected to the Russians. Comment: KYC was not applied in this case; one of the first procedures is to verify the business activity and the legitimacy of the customers themselves. In cases like this, customer identification can include reviewing business-related documentation, such as rent and utility bills and payroll payments.
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Misuse: These accounts were used by Berlin and his wife to help Russian banks and other Russian customers evade taxes and other government regulations. In one instance, one of these accounts received a total of $166 million in one month, mostly through transfers from correspondent banks. The bank did not look into the origins of these unusually large money transfers. Comment: The size of the money transfers, relative to the normal flows within the account, should have been an indication that due diligence needed to be applied and a suspicious activity report needed to be filed. Also, more stringent due diligence should have been applied since correspondent banks were involved in these transactions. Indictment: Over the three-year period, the couple moved in excess of $7 billion through accounts globally. They were eventually charged with conspiracy to commit a number of U.S. crimes, including money laundering and illegal money transmission. Comment: Too late! The bank suffers substantial reputational risk and loss of business.
The four principle areas of risk

Type of person In general, domestic customers may be at a lower risk due to the easy availability of information to verify their identities. Offshore customers, especially those who do not have a domestic business or residence, may be a higher risk due to the difficulty in easily obtaining and verifying information about such customers. Offshore customers may also be classified in terms of their country of origin. This is because the level of anti-money laundering regulation and enforcement varies considerably from country to country. Origins A customer may have several origins. In the case of an individual, it could mean country of citizenship, place of birth or principal place of residence or business. In the case of a corporation, it could mean jurisdiction of incorporation or regulation, principal place of business or location of principal assets. Type of service or product Reporting entities need to be aware of the type of product or service that they offer to a customer and the vulnerability that product or service poses to being used to launder money or finance terrorism. For example an account with multiple signatories may pose a higher risk than an account with one signatory. This is because the more people transacting on an account, the greater the exposure to criminal behaviour.
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Blacklists When a business provides a different product or service to a new or existing customer it should be aware of the 'blacklist'. Regulators and government departments in different countries, such as the Australian Department of Foreign Affairs and Trade and the US Department of the Treasury, publish blacklists of various entities. Blacklisted entities Blacklists may cover: countries and government institutions individuals companies charitable organisations and non-profit associations known terrorist groups and their affiliates
Blacklist purposes The purpose of blacklists varies, but includes prevention or curtailment of the following: money laundering terrorism weapons of mass destruction drug production or smuggling corruption
Blacklist sanctions Sanctions imposed on blacklisted entities can include: arrest and extradition freezing of assets prohibition on dealing with third parties
Blacklist laws The laws under which blacklists are issued prohibit businesses (particularly in the financial sector) and individuals from dealing with blacklisted entities. However, to avoid legal problems and reputation risk, many businesses comply with the major blacklists even if such businesses are not expressly subject to regulation. Example Under the Charter of the United Nations (Terrorism and Dealings with Assets) Regulations 2002 , the Australian Department of Foreign Affairs and Trade maintains a list of proscribed persons and entities. It is an offence to use or deal with such assets or facilitate using or dealing with such assets. Reporting such use or deals may also be triggered by the suspect transaction reporting obligations under the FTR Act.
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Summary
KYC policies ensure that businesses can effectively identify, verify and monitor customers and customer-related transactions. An effective KYC policy can help prevent or detect money laundering activities. It can also reduce other types of risks to a business. The objectives of KYC policy include: accepting only legitimate customers identifying customers to understand the potential risks they pose verifying that customers are who they say they are monitoring customer accounts and transactions for illegal activities implementing risk management processes to effectively manage customer-driven risk
Well-conceived and effectively implemented KYC policies can mitigate the following risks: reputational operational legal financial concentration
A good policy is only as good as its implementation. Do your part!
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Know Your Customer Quiz

This quiz will test your understanding of the know your customer objectives. Question 1 Who is a 'customer' for KYC purposes? Which of the following should be treated as a customer for prudent KYC analysis? a) Any person or company which can conduct a transaction in relation to an account offered by a bank. b) Any person who is a signatory to an account offered by a building society. c) Any person or company which holds an account issued by a credit union. d) All of the above. Question 2 Rowena Rocket Rowena Rocket is a politician raising funds for an upcoming election. She regularly banks at Watermelon Bank and opens an account in which to place campaign contributions. The contributions are expected to reach about $1 million. Rowena Rockets private bankers at Watermelon Bank are aware of her profession and the purposes of the account. Since she is an old customer and has a solid reputation, they waive many of the checks to verify the funds. What money laundering risks, if any, does Watermelon Bank face in this situation? Watermelon Bank faces: a) reputational, operational, legal and concentration risk b) reputational and operational risk c) reputational, operational and legal risk
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Question 3 Elements of KYC What should you consider when managing AML/CTF in your business? This is known as: a) b) c) d) Knowing your customer Destination of funds Methods of delivery, such as cash, telephone and internet banking All of the above
Question 4 Elements of KYC Please read the KYC practice stated below. Identify the KYC element which best relates to the stated practice. Well-developed and applied customer assessments enable initial identification and classification of potentially high-risk customers. This is known as: a) customer acceptance b) customer identification c) accounts and transaction monitoring d) risk management Question 5 Elements of KYC Please read the KYC practice given below. Identify the KYC element which best relates to the stated practice. High-risk customer activity is regularly reviewed and substantial high-risk customers are personally known to management. This is known as: a) customer acceptance b) customer identification c) accounts and transaction monitoring d) risk management
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Question 6 Elements of KYC Please read the KYC practice given below. Identify the KYC element which best relates to the stated practice. Effective information-gathering strategies enable building of a solid information base about each customer. This is known as: a) customer acceptance b) customer identification c) accounts and transaction monitoring d) risk management Question 7 Identifying Risk During customer acceptance and identification activities, on which of the following customers should enhanced due diligence be conducted? Select the incorrect response from the alternatives below. Enhanced due diligence should be conducted on: a) trustees, nominees, and fiduciaries. b) personal customers with small deposits. c) non-face-to-face customers. d) correspondent accounts. Question 8 The Leasing Company A well-established and well-regarded customer of your bank refers a new customer to you. The new customer is a leasing company that does business in the Philippines. It is also listed on the Philippine Stock Exchange. What level of due diligence would be required? a) This situation requires a normal degree of due diligence. It is a public company and has been introduced by a trusted customer. b) This situation requires a very limited degree of due diligence because the new customer is a public company and has been introduced by a trusted customer. c) This situation requires an enhanced degree of due diligence. The customer is a non-bank financial company based overseas.
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Question 9 The Lawyer A lawyer who banks with you is a sole practitioner. He wants to open a trust account for a client. He provides you with the trust documents and the name and address of the trust beneficiary but is unable to provide additional details due to a client confidentiality obligation. You notice that the address is from an overseas jurisdiction. What level of due diligence would be required? a) This situation does not require enhanced due diligence. You know the lawyer well and you have been provided with the trust documents and identity of the beneficiary. b) This situation requires enhanced due diligence because an offshore jurisdiction is involved. c) This situation requires enhanced due diligence because the lawyer is clearly hiding something when he says he is under a client confidentiality obligation. Question 10 Customer Verification Customer verification is vital to any KYC procedure. What is acceptable in verifying an individual customer? Select the incorrect response from the alternatives below. In verifying an individual customer, you can rely on: a) a certified copy of a birth certificate in conjunction with the customers drivers licence and Medicare card. b) sighting original identification such as birth certificate and drivers licence. c) a reference from a good friend.
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Overview of the Acts
Objectives
In this module we will address the following questions: What is the purpose of the FTR Act? To whom does the FTR Act apply? What are the key requirements of the FTR Act? Who enforces the FTR Act? What types of transactions must be reported? What is the purpose of the AML/CTF Act? How much flexibility do businesses have under the AML/CTF Act? Who administers the AML/CTF Act? To whom does the AML/CTF Act apply? What are the key requirements of the AML/CTF Act? What are the key know your customer (KYC) obligations? What are the AML/CTF Rules? What is a designated business group (DBG)? How does AUSTRAC promote compliance with the legislation?
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Financial Transaction Reports Act 1988 (FTR Act)

What is the purpose of the FTR Act?
The FTR Act is part of Australia's anti-money laundering and counterterrorism financing legislative framework. The FTR Act provides for the reporting of certain transactions and transfers and imposes obligations in relation to accounts and other related purposes.
To whom does the FTR Act apply?

The FTR Act applies to a wide range of businesses. The types of entities covered by the FTR Act are referred to as 'cash dealers' and include: banks, building societies, credit unions and other financial institutions financial corporations insurance companies and intermediaries securities dealers and futures brokers cash carriers managers and trustees of unit trusts firms dealing in travellers cheques and/or money orders casinos and gambling houses TABs, on-course Totes and bookmakers bullion sellers remittance dealers bureau de change/foreign exchange operations
What are the key requirements of the FTR Act?

The FTR Act requires cash dealers to: report specific transactions comply with know your customer obligations retain specified documents
Who administers the FTR Act?

The Australian Transaction Reports and Analysis Centre (AUSTRAC) was established under the FTR Act as Australia's anti-money laundering regulator and specialist financial intelligence unit. AUSTRAC is continued in existence by the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (which is discussed further in this module).
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What types of transactions must be reported?

Cash dealers need to report three types of transactions to AUSTRAC: significant cash transactions international funds transfer instructions suspect transactions
Refer to the Reporting Obligations module for more information on cash dealers obligations.
What are the significant cash transaction reporting obligations?

A significant cash transaction is a transaction with a cash component of at least AUD10,000 or its equivalent in foreign currency. Cash dealers must report all such transactions to AUSTRAC. Section 15A of the FTR Act also requires solicitors to report significant cash transactions to AUSTRAC. Refer to the Reporting Obligations module for more information on significant cash transactions.
What are the international funds transfer instruction reporting obligations?

An international funds transfer instruction (IFTI) is an instruction transmitted electronically into or out of Australia for the transfer of funds. With certain exceptions, cash dealers must report IFTIs in relation to instructions of which they are either senders or recipients. Refer to the Reporting Obligations module for more information on international funds transfer instructions.
What are the suspect transaction reporting obligations?

A suspect transaction is a transaction which a cash dealer has reasonable grounds to suspect may be linked to tax evasion, criminal acts or terrorist acts. Cash dealers should report a suspect transaction if they have suspicions about the monies, individuals or circumstances involved in a transaction. Note that there does not have to be a completed transaction in order to report. Anything that raises a cash dealers suspicion can be reported as a suspect transaction, including enquiries or suspicious behaviour. Refer to the Reporting Obligations module for more information on suspect transactions.
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Know your customer (KYC) obligations:

On 12 December 2007, the customer identification and verification provisions of the AML/CTF Act came into effect. For cash dealers who are currently identified under the FTR Act and not offering designated services under the AML/CTF Act please contact AUSTRACs helpdesk for your account opening obligations.
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Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act)

What is the purpose of the AML/CTF Act?
The AML/CTF Act forms part of a legislative package which implements recent reforms to Australia's AML/CTF regulatory regime. The reforms achieve a major step in bringing Australia into line with international best practice to deter money laundering and terrorism financing. The provisions of the AML/CTF Act are being progressively implemented over a two-year period. While the AML/CTF Act replaces and builds on existing provisions of the FTR Act, the new regime applies to a broader range of businesses than the FTR Act and imposes a wider range of obligations.
How much flexibility do businesses have under the AML/CTF Act?

Unlike the FTR Act which is highly prescriptive, the AML/CTF Act is principles-based. It sets out broad obligations which reporting entities must meet, but leaves the exact methods of meeting those obligations to be decided by the entities on whom the obligations fall. This approach is based on the assumption that businesses are best placed to know their products, operating structures and business environment. They are also best placed to assess the risks that their business will be used for money laundering or terrorism financing purposes and thus tailor appropriate mitigation strategies. Principles-based legislation provides the best approach for a regulatory environment to remain relevant and effective in a rapidly changing, sophisticated, global business environment. Businesses should adjust their processes and strategies to keep up with the changing environments in which they operate.
Who administers the AML/CTF Act?

AUSTRAC, which was established under the FTR Act, continues in existence under the AML/CTF Act and is Australias AML/CTF regulator and specialist financial intelligence unit. Certain enforcement powers are also conferred upon Customs and police officers allowing them to question, search and arrest in relation to cross-border movements of physical currency and bearer negotiable instruments.
To whom does the AML/CTF Act apply?

The AML/CTF Act imposes obligations on any person or entity that provides one or more of the designated services set out in section 6 of the Act. These include financial, bullion and gambling services. The public is also affected, as any person who moves physical cash of AUD10,000 or more (or the foreign equivalent) or bearer negotiable instruments (of any
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amount) has certain reporting obligations. These are discussed in more detail in the Reporting Obligations module.
What are the key requirements of the AML/CTF Act?

Persons who provide one or more designated services to a customer are reporting entities who incur various obligations under the AML/CTF Act. These obligations include the following major categories: Identification and verification Reporting entities must verify a customers identity before providing the customer with a designated service. In limited circumstances, the applicable identification and verification procedures may be carried out after beginning to provide the designated service.
What are the key know your customer (KYC) obligations?

A reporting entity must develop a procedure to collect KYC information and verify a customers identity before providing the customer with a designated service, with certain exceptions listed in the AML/CTF Rules. The collection of KYC information is determined by Part B of the reporting entitys AML/CTF program. For medium and lower risk individuals, chapter 4 of the AML/CTF Rules provides for 'safe harbour' provisions. Chapter 4 of the AML/CTF Rules also allows for simplified verification procedures for companies and trustees. From 12 December 2008, reporting entities will also be required to conduct ongoing customer due diligence with respect to the money laundering and terrorism financing risk posed by providing a designated service.
What are the key KYC document retention obligations?

Where a reporting entity provides a designated service to a customer, the reporting entity must make a record of: (a) the procedure (b) the information obtained (in carrying out the procedure) (c) other information specified in the AML/CTF Rules. The reporting entity must retain the record, or a copy of the record, for seven years after the end of the customer/business relationship. Correspondent banking due diligence Before a financial institution enters into a correspondent banking relationship with another financial institution, it must carry out an assessment of the risk of money laundering or terrorism financing posed by the relationship. Based on the results of the risk assessment, a more detailed assessment may be required. The AML/CTF Rules set the matters to be assessed. After a financial institution has entered into a
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correspondent banking relationship, it must carry out regular risk assessments, with more detailed assessments undertaken if necessary. Reporting Reporting entities must report to AUSTRAC suspicious matters, threshold transactions and international funds transfer instructions. They also need to render AML/CTF compliance reports to AUSTRAC as and when required and in the prescribed form. The AML/CTF Act also imposes reporting obligations on persons (most commonly these are members of the public) who move physical currency of AUD10,000 or more (or the foreign equivalent) into or out of Australia. There is also an obligation to report the movement of bearer negotiable instruments into or out of Australia, when required to do so by a Customs or police officer. This topic is covered in more detail in the Reporting obligations Module.
AML/CTF programs
Reporting entities must have and comply with AML/CTF programs, which are designed to identify, mitigate and manage money laundering and terrorism financing risks the reporting entities may reasonably face. Members of a designated business group may enter into a joint AML/CTF program with other members of that group. This topic is covered in more detail in the AML/CTF Programs Module.
Record-keeping
The AML/CTF Act imposes a number of record-keeping obligations on reporting entities, including: designated services provided customer transactions applicable customer identification procedures electronic funds transfer instructions AML/CTF programs correspondent banking due diligence assessments
In most cases reporting entities must make and retain records (and other documents given to them by customers) for seven years. Refer to Part 10 of the AML/CTF Act for record-keeping provisions.
What are electronic funds transfer instructions?

Under the AML/CTF Act, electronic funds transfer instructions (EFTIs) must include certain information about the origin of the transferred money. The EFTI provisions commenced on 13 December 2006.
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EFTIs can involve two or more institutions, or transfers within one institution. Transfers can be from one person to another, but can also involve only one person - for example, an individual transferring funds between their own accounts. There are four combinations known as: a) multiple-institution person-to-person EFTI (i.e. more than one institution and more than one person) b) same-institution person-to-person EFTI (i.e. only one institution, but more than one person) c) multiple-institution same-person EFTI (i.e. more than one institution, but only one person) d) same-institution same-person EFTI (i.e. one institution and one person) Both domestic and international transfers are covered by the EFTI provisions in the AML/CTF Act. EFTIs are not reportable to AUSTRAC, however the AUSTRAC CEO can request certain EFTI information to be provided by a reporting entity to the CEO. This might be done, for example, to assist AUSTRAC in measuring a reporting entity's compliance with the AML/CTF Act.
What are the AML/CTF Rules?

Under the AML/CTF Act, the Chief Executive Officer (CEO) of AUSTRAC may, in writing, make Anti-Money Laundering/Counter-Terrorism Financing Rules (AML/CTF Rules). The AML/CTF Rules are legislative instruments and are therefore legally binding. The AML/CTF Rules help to clarify the obligations of reporting entities (such as expanding definitions given in the AML/CTF Act) and can set obligations such as the required details for reports, specify exemptions from the legislation or add certain types of designated services to be captured by the AML/CTF Act. Some major provisions covered by the AML/CTF Rules include: 'Register of Providers of Designated Remittance Services' required details correspondent banking due diligence minimum 'know your customer' requirements AML/CTF programs (including customer identification procedures) gambling services (including customer identification and recordkeeping) AML/CTF compliance reports (reporting and lodgement periods)
AML/CTF Rules are registered with the Australian Government and tabled in Parliament. Prior to registration, AUSTRAC consults with industry and
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relevant government departments and publishes draft AML/CTF Rules on the AUSTRAC website for public comment.
What is a designated business group (DBG)?

A DBG comprises two or more persons where: each member of the group has elected in writing to be a member of the group and the election is in force members are related to each other as per section 50 of the Corporations Act 2001 (that is, each member is a holding company, subsidiary, or subsidiary of a holding company of another member) each member is a reporting entity (or a company in a foreign country which would be a reporting entity if it resided in Australia) or each member is a party to a joint venture agreement and is providing a designated service under that agreement
Certain obligations under the AML/CTF Act may be discharged by a member of the DBG for other members of the DBG.
How does AUSTRAC promote compliance with the legislation?

AUSTRAC's preference is to promote an environment of continuous voluntary compliance with the FTR and AML/CTF Acts, the related regulations and AML/CTF Rules. It is anticipated that most entities will seek to comply with their obligations. However, there may be some who do not comply with the law either through ignorance, failure of their systems, lack of effort or even, on occasion, wilful or dishonest intention. As the regulator, AUSTRAC promotes compliance with the legislation. In addition, AUSTRAC has certain powers to monitor the level of compliance being achieved by regulated entities. Entities assessed as being higher risk than others are generally supervised with more intensity than those assessed as lower risk. In cases of non-compliance, AUSTRAC can choose from several alternatives of action to achieve the desired regulatory outcome in each case. This includes identifying the level and extent of non-compliance to formulate an appropriate rectification plan. This in turn helps to uphold the integrity of the FTR and AML/CTF Acts. AUSTRAC endeavours to resolve compliance issues in a cooperative manner through negotiation and guidance. If this approach is not successful, it may be necessary to escalate the regulatory action taken and use more coercive powers against the non-complying entity, especially where there is a clear history of deliberate and serious noncompliance. The enforcement powers available to AUSTRAC under the FTR Act are limited to criminal penalties and injunctions. Under the AML/CTF Act the
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powers are more broad, including civil penalties. This provides greater flexibility in taking compliance and enforcement action. AUSTRACs Enforcement Policy describes the issues taken into account when formulating appropriate enforcement action.
Summary
The FTR Act is part of Australias anti-money laundering and counterterrorism financing legislative framework. The Act provides for the reporting of certain transactions and imposes obligations relating to accounts and other related purposes. The AML/CTF Act forms part of a legislative package which implements recent reforms to Australia's AML/CTF regulatory regime. The reforms achieve a major step in bringing Australia into line with international best practice to deter money laundering and terrorism financing.
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Overview of the Acts Quiz

This quiz will test your understanding of the FTR and AML/CTF Acts. Question 1 FTR Act Select the correct response. Insurance agencies and foreign exchange dealers: a) are not cash dealers b) are cash dealers Question 2 FTR Act Select the correct response. Cash dealers must report: a) all cash transactions b) only significant cash transactions of $10,000 or more Question 3 FTR Act Select the single correct response. Suspect transactions need to be reported by: a) all cash dealers b) banks only Question 4 IFTIs An international funds transfer instruction (IFTIs) is an instruction transmitted electronically into or out of Australia for transfer of funds. IFTIs need to be: a) reported by cash dealers, both when they are senders and recipients (unless an exception applies). b) reported by cash dealers, when they are acting as recipients of IFTIs (unless an exception applies). c) reported by cash dealers, when they are acting as senders of IFTIs (unless an exception applies).
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Question 5 KYC requirements Select the single correct response. To open accounts, cash dealers must: a) obtain information about the account holders and the signatories. b) obtain information about the account holders. c) obtain information about the signatories. Question 6 FTR Act Select the incorrect response from the alternatives given below. Under the FTR Act, cash dealers are required to: a) report specified transactions. b) comply with an AML/CTF program. c) comply with KYC obligations. d) retain specified documents. Question 7 the FTR and AML/CTF Acts Select the incorrect response from the alternatives given below. The AML/CTF Act is replacing the FTR Act and will be implemented over two years. The AML/CTF Act has been implemented because: a) it is principles based and provides the best approach for regulated industries to remain relevant and effective in a rapidly changing environment. b) AUSTRAC will no longer regulate the FTR Act. c) it brings Australia in line with international standards to deter money laundering and terrorism financing. d) more designated services have been incorporated into this Act.
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Question 8 AML/CTF programs Select the single correct answer. An AML/CTF program is a key requirement under the AML/CTF Act. This means that: a) Reporting entities have the option to participate in a program. b) All reporting entities are required to adopt, maintain and comply with an AML/CTF program. Question 9 AML/CTF Rules Select the single correct answer. AML/CTF Rules help clarify reporting obligations set in the AML/CTF Act and: a) can be updated or changed as required b) cannot be updated or changed Question 10 Designated business groups Select the incorrect response from the alternatives below. A designated business group comprises two or more members. Each member is: a) a reporting entity or a company overseas which would be a reporting entity if resident in Australia. b) related to each other. c) chosen by other members of the group. Question 11 Non-compliance Select the single correct response. In the case of non-compliance, a) AUSTRAC can choose from several alternative courses of action to achieve the desired regulatory outcome in each case. b) AUSTRAC will use financial penalties to achieve the desired regulatory outcome in every case.
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Remittance Providers Registration
Under the AML/CTF Act, remittance service providers have a new obligation to register with AUSTRAC. This module outlines these obligations. Remitter have further responsibilities and obligations as reporting entities. More information can be found in the Reporting Obligations module.
Objectives
In this module, we will address the following questions: What is a remittance service? What is alternative remittance? What do remittance service providers need to do?
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What is a remittance service?

When money or property is transferred from one location to another (usually between countries), the process is called remittance. A business or individual performing this service for a customer is therefore providing a remittance service. The Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) uses the terms designated remittance arrangement and remittance arrangement to cover services that arrange the transfer of money or property. Some remittance services use their own electronic payment system to transmit funds, meaning there is no need to use the formal banking system. Other remittance services do use the formal banking system to transmit funds. In these instances the remitter often bundles together money from several customers who all wish to send funds to the same destination. The remitter goes to a bank and the funds are sent via telegraphic transfer to the remitters counterpart in the destination country or region.
What is alternative remittance?

There are many remittance service providers who use an informal system to transfer funds. These informal systems are usually based along cultural or ethnic structures and have been operating for many centuries. Alternative remittance systems are based upon trust and rarely issue receipts or keep formal records. Funds can be transferred from one location to another in a manner that is often quicker and cheaper than the formal banking system. An example of an alternative remittance process is given below: A customer places an order with their chosen remitter The remitter transmits the details of this order (the payment instruction) to their overseas agent The agent delivers the funds according to the instruction
The payment instruction can be transmitted in a variety of ways, including an SMS message, email, fax or telephone call. Example One: Dave wants to send $5,000 to his brother Joe living in Vietnam. Dave contacts Jill, an alternative remitter in his community and gives her Joes details in Vietnam and the $5,000. Jill contacts her counterpart Fred in Vietnam via SMS. Fred then arranges to have the $5,000 delivered to Joe.
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The alternative remittance service provider and their counterpart arrange to reconcile funds between them using a variety of methods. One example is reconciling through a third party which may occur at a later date. Example Two: Adam's Australian counterpart, Eve, transmits instructions to pay out beneficiaries in Vietnam totalling $10,000 per week. At the end of the week Eve owes Adam $10,000. Adam has a second business importing car parts from Hong Kong to Vietnam. Adam places an order with his Hong Kong associate for $10,000 worth of car parts. The Hong Kong associate ships the car parts and Adam now owes his associate in Hong Kong $10,000. Rather than Eve paying Adam $10,000 and Adam paying his Hong Kong associate $10,000, Adam asks Eve to settle the debt for him. The Hong Kong associate sends Eve and invoice for $10,000 for the car parts. Eve pays the Hong Kong associate the $10,000 she owes Adam. All debts are now settled. In ethnic communities these alternative systems are known by different names, including hawala, hundi, chuyen tien, yok song geum and pera padala. Alternative remittance services are not illegal in Australia. They are a legitimate and widely recognised method of transferring money and they provide a valuable service to countries with no formal banking structures. In addition they are flexible enough to deliver funds in times of war and natural disaster.
What do remittance service providers need to do?

Under the AML/CTF Act, certain providers of remittance services must register with AUSTRAC. The AML/CTF Act calls these registrable designated remittance services. It is an offence to provide such services without being registered. Remittance service providers who have been reporting to AUSTRAC as cash dealers under the Financial Transaction Reports Act 1988 must still register in order to continue providing remittance services. The register is called the Register of Providers of Designated Remittance Services. Currently the only types of businesses that are not required to register are:
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authorised deposit-taking institutions (ADIs) banks building societies credit unions
The AML/CTF Rules may specify other entities that are not considered to be designated remittance services (and therefore do not register with AUSTRAC). At July 2007, such AML/CTF Rules have not yet been made. Registering with AUSTRAC is free. For further information about registering as a remittance service provider, call the AUSTRAC Help Desk on 1300 021 037 or visit: www.austrac.gov.au/business/registration
Summary
Remittance is when money or property is transferred from one location to another. Remittance service providers must register with AUSTRAC.
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Remittance Providers Registration Quiz

This quiz will test your understanding of remittance providers registration. Question 1 Select the correct alternative given below. Remittance services: always use their own electronic payment system to transmit funds, meaning there is no need to use the formal banking system. Question 2 Complete the following statement with the most appropriate phrase or phrases. Alternative remittance systems are: a) illegal transfers of money, usually criminal in origin. b) based upon trust and do not always issue receipts or keep formal records. Question 3 Josh wants to send $2,000 to his Uncle Scott living in the Philippines. He gives this money to Emily and asks her to send it to Scott. Emily emails her sister Briony in the Philippines and asks her to give Scott $2,000. Briony gives Scott $2,000. Emily still has $2,000 and no money has actually left Australia and arrived in the Philippines. Has any money been remitted? a) No. A debt between Emily and Briony has been created, but no money has been sent. Remittance will occur when Emily and Briony reconcile their debts. b) Yes. Although no money has left Australia, the funds have been transferred from Josh to Uncle Scott. Question 4 Indicate whether the following statement is True or False. Remittance service providers who have been reporting to AUSTRAC as cash dealers under the Financial Transaction Reports Act 1988: are required to register with AUSTRAC in order to continue providing what the AML/CTF Act calls registrable designated remittance services.
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Reporting Obligations
Objectives
In this module, we will address the following questions: What is a cash transaction? What is a significant cash transaction? What are the reporting obligations? What is a suspect transaction? How and when must a suspect transaction be reported? What is an international funds transfer instruction (IFTI)? Who needs to report IFTIs? What is a cross-border movement of physical currency? Who needs to report movements of physical currency? When must the report be made? What is a bearer negotiable instrument? Who needs to report a movement of a BNI? When must the report be submitted? What is an AML/CTF compliance report? Who is required to submit an AML/CTF compliance report?
Your key learning objectives will be to correctly answer each of the questions listed above.
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Financial Transaction Reports Act 1988

Significant Transaction What is a cash transaction?
A cash transaction involves the physical transfer of currency from one person to another. The currency involved could be Australian dollars or a foreign currency.
What types of cash transactions are covered?

Some examples of transactions involving the transfer of currency (notes and coins) are: Deposit into a bank account Purchase of stocks or bonds Payout on gambling winnings Purchase of traveller's cheques Delivery of cash to meet a payroll
What is a significant cash transaction?

A significant cash transaction involves a transfer of AUD10,000 or more, or the equivalent in foreign currency.
What are the reporting obligations?

Cash dealers (as defined in the FTR Act) must report significant cash transactions to AUSTRAC (unless an exemption applies). If the transaction involves foreign currency, the report must be made by the end of the day after the day on which the transaction takes place. If the transaction does not involve foreign currency, the report must be made within 15 days of the transaction taking place. From 12 December 2008, the Anti-Money Laundering and Counter Terrorism Financing Act 2006 (AML/CTF Act) threshold transaction reporting obligation will come into effect.
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Suspect Transactions What is a suspect transaction?

A suspect transaction is a transaction which a cash dealer has reasonable grounds to suspect may relate to a criminal offence. There does not need to be a completed transaction in order to submit a report to AUSTRAC. For example, a suspect transaction could involve an incomplete transaction, a query from a potential customer, or a type of behaviour.
A suspect transaction may be relevant in these circumstances: An investigation or prosecution of an evasion or attempted evasion of tax laws or an offence against the law of the Commonwealth or a territory. In the enforcement of anti-money laundering law (e.g. the Proceeds of Crime Act 1987). An investigation or prosecution of a financing of terrorism offence or preparation to the commission of such an offence.
What could give rise to suspicion?

The cash dealer could have a suspicion in relation to the amount or sources of money, the individuals, or the circumstances involved. Some examples are: Unusual transactions or circumstances Business background of the client Production of seemingly false identification Transactions involving known narcotic sources or transit countries Customer stops or changes transaction after learning of reporting requirements The behaviour of the person conducting the transaction
What are examples of suspicious transactions?

Cash dealers should look for the following: Unusual account arrangements (e.g. in another person's name). Unusual deposit or transfer arrangements (such as multiple deposits less than $10,000). Transfers to or from countries which source narcotics or provide tax havens.
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How and when must a suspect transaction be reported?

A cash dealer must complete a suspect transaction report (SUSTR) and lodge it with AUSTRAC, if the cash dealer has reasonable grounds for suspicion. The cash dealer should report a suspect transaction as soon as practicable after forming the suspicion. From 12 December 2008, the AML/CTF Act suspicious matter reporting obligation will come into effect.
Should the cash dealer inform others?

The FTR Act specifically prohibits cash dealers from disclosing to the client or other parties that they have reported a suspect transaction. If the cash dealer informs third parties, the suspect parties may be tipped off!
What are the benefits of filing a SUSTR?

Filing a SUSTR can both benefit the public and protect the cash dealer. SUSTRs can be used to initiate or further existing investigations by AUSTRACs partner agencies, but are not used as evidence during prosecution. One reason for this is to protect both the organisation and the staff submitting SUSTRs. For further information regarding the protection built into the legislation to protect cash dealers submitting SUSTRs, see subsection 16(5D) and section 17 of the FTR Act.
International Funds Transfer Instruction What is an international funds transfer instruction?

An international funds transfer instruction (IFTI) is an instruction transmitted into or out of Australia electronically or by telegraph (subject to certain exceptions), for a transfer of funds. The currency involved could be Australian dollars or a foreign currency. All such instructions should be reported to AUSTRAC. There is no monetary threshold attached to reporting IFTIs.
Who needs to report IFTIs?

A report must be submitted to AUSTRAC by any cash dealer who is the sender or recipient of an IFTI. Certain exemptions exist for IFTI reporting. For further information, contact the AUSTRAC Help Desk by email to help_desk@austrac.gov.au or phone 1300 021 037 (a local call within Australia).
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Who reports inward IFTIs?

The rule of thumb is that inward-bound IFTIs must be reported by the first point of contact in Australia. For example, a customer overseas sends a fax instructing his credit union to transfer funds from Singapore to Sydney. The credit union would report this as an inward IFTI, because it has received an electronically transmitted instruction from an international location. It is the instruction, not the actual funds transfer, which is the trigger for an IFTI report.
Who reports outward IFTIs?

The rule of thumb is that outward-bound IFTIs must be reported by the last point of contact in Australia. For example, a customer in Australia instructs his credit union to transfer funds from Sydney to Singapore. The credit union in this case does not have the capability to do a telegraphic transfer itself, so the credit union uses a bank in Australia to complete the actual funds transfer. The responsibility to report the outward-bound IFTI is with the bank, not with the customer or the credit union, because it is the bank transmitting the electronic instruction to an international destination.
When must the IFTI report be made?

IFTIs must be reported to AUSTRAC within 14 days from the day the instruction is sent or received. From 12 December 2008, the AML/CTF Act IFTI reporting obligation will come into effect.
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AML/CTF Act Current Reporting Obligations

Cross-Border Movements of Physical Currency and Bearer Negotiable Instruments What is a cross-border movement of physical currency?
A cross-border movement of physical currency is when a person brings or sends into or out of Australia, AUD10,000 or more, or the foreign currency equivalent. Physical currency means coin and printed money and does not include travellers cheques or other monetary instruments.
The obligation to report a cross-border movement of physical currency replaces the international currency transfer report previously required under the FTR Act.
Who needs to report movements of physical currency?

Persons entering or leaving Australia carrying AUD10,000 or more (or the foreign currency equivalent) must provide a report to a Customs officer, a police officer or to AUSTRAC. Reporting forms are available from Customs officers at international airports and sea ports. Persons who mail or ship currency of AUD10,000 or more (or the foreign currency equivalent) into or out of Australia, must also provide a report to a Customs officer, a police officer or to AUSTRAC. Forms can be obtained from AUSTRAC.
When must the report be made?

Persons entering or leaving Australia must report at the Customs baggage or passport examination area, or (in any other case) at the first opportunity after arriving in Australia or the last opportunity before leaving Australia. When sending or receiving currency by mail or shipping, the report must be submitted to AUSTRAC directly prior to sending the currency, or within 5 business days of receiving currency.
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Cross-Border Movements of Bearer Negotiable Instruments What is a bearer negotiable instrument?

A bearer negotiable instrument (BNI) is a monetary instrument of any value including: bills of exchange cheques promissory notes bearer bonds travellers cheques money orders, postal orders or similar
Who needs to report a movement of a BNI?

Persons entering or leaving Australia must, if asked by a Customs or police officer, produce any BNIs they have with them. The officer may require that person to complete a BNI report form.
When must the report be submitted?

A Customs or police officer must forward the report to AUSTRAC within 5 business days of receipt of the report.
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AML/CTF Compliance Reports

What is an AML/CTF compliance report?
An AML/CTF compliance report provides AUSTRAC with information about reporting entities compliance with the AML/CTF Act, the regulations and the AML/CTF Rules. This obligation came into effect on 12 June 2007. Due to the provisions of the AML/CTF Act coming into effect between December 2006 and December 2008, the content of AML/CTF compliance reports during that time will change as the various provisions commence. Not all topics will be relevant to all reporting entities. identifying cash dealers were previously required to submit an Annual Compliance Report to AUSTRAC relating to the cash dealers compliance with the FTR Act. Due to the commencement of the AML/CTF compliance reports obligation, the AUSTRAC CEO determined there will be no further compliance reporting requirements under the FTR Act.
Who is required to submit an AML/CTF compliance report?

Reporting entities are required to submit AML/CTF compliance reports to AUSTRAC. A reporting entity is a person who provides a designated service as defined in the AML/CTF Act. Examples of reporting entities include banks and other financial institutions, remittance service providers, bullion dealers and casinos. Civil penalties may apply for failure to provide an AML/CTF compliance report.
When are AML/CTF compliance reports due?

The reporting and lodgment periods for AML/CTF compliance reports are set by the AML/CTF Rules, which can be modified when necessary. For example, the length of a particular reporting period may be shortened or lengthened by the AUSTRAC Chief Executive Officer (CEO) via AML/CTF Rules.
What topics are covered in AML/CTF compliance reports?

AML/CTF compliance reports cover obligations under the AML/CTF Act, regulations and the AML/CTF Rules. Major topics include customer identification (know your customer) procedures, reporting obligations, correspondent banking due diligence and record-keeping. Due to the provisions of the AML/CTF Act coming into effect between December 2006 and December 2008, the content of AML/CTF compliance reports during that time will change as the various provisions commence. Not all topics will be relevant to all reporting entities.
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AML/CTF Act Future Reporting Obligations

Suspicious Matter, Threshold Transaction and IFTI Reports
Suspicious matter reports, threshold transaction reports and international funds transfer instruction reports under the AML/CTF Act come into effect in December 2008. These reporting obligations are the equivalent of the FTR Acts suspect transaction reports, significant cash transaction reports and international funds transfer instruction reports, respectively. Further information regarding these reports can be obtained from the AML/CTF Act.
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Transitional Reporting Table

Report type Cross-border movement physical currency (carrying) Description Reported by anyone entering or departing Australia, where the amount is AUD10,000 cash or more (or the foreign equivalent). Reported by anyone when mailing or shipping currency into or out of Australia, where the amount is AUD10,000 cash or more (or the foreign equivalent). Reported by anyone entering or departing Australia upon request by a Customs or police officer. Bearer negotiable instruments include cheques, travellers cheques, bearer bonds and promissory notes (regardless of the amount). Reported by cash dealers and solicitors for transactions involving AUD10,000 cash or more FTR Act International currency transfer report (ICTR). AML/CTF obligations commences 13 December 2006 AML/CTF Act Report is made to a Customs officer, police officer, or AUSTRAC, usually at the first or last opportunity before entering or leaving Australia. Report can be made to a Customs officer, police officer or AUSTRAC, directly prior to sending currency or within 5 business days of receiving currency. Customs or police officers must forward the report to AUSTRAC within 5 business days after the day of receipt of the report.
Cross-border movement physical currency (mailing or shipping)
International currency transfer report (ICTR).
13 December 2006
Cross-border movement bearer negotiable instrument (carrying)
N/A
13 December 2006
Significant cash transaction
Report must be made by the end of the day after the day on which the transaction takes place if
12 December 2008 (threshold transaction report). For solicitors this only applies
Within 10 business days after the day on which the transaction takes place.
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International funds transfer instruction
Suspect transaction report
AML/CTF compliance reports
(or the foreign equivalent). Reporting forms have been tailored separately for cash dealers, casinos, betting (e.g. bookmakers, TABs) and solicitors. Reported by cash dealers for all funds transfer instructions transmitted into or out of Australia electronically, regardless of amount or method of payment. Reported by cash dealers where there are reasonable grounds to suspect that a transaction, actual or attempted, may involve the proceeds of crime, tax evasion, terrorism financing or other breaches of a Commonwealth, State or territory law Provides AUSTRAC with information about reporting entities compliance with the AML/CTF Act, the regulations and the AML/CTF Rules.
foreign currency is involved. If the transaction does not involve foreign currency, report must be made within 15 days of the transaction taking place. Must be reported to AUSTRAC within 14 days from the day the instruction is sent or received
where the solicitor provides a designated service in direct competition with the financial sector. 12 December 2008
Within 10 business days after the day on which the transaction takes place.
The cash dealer should report a suspect transaction as soon as practicable after forming the suspicion.
12 December 2008 (suspicious matter report)
Identifying Cash Dealer Annual Compliance Report
12 June 2007
Within 3 business days after the day of the suspicion, unless it involves a potential terrorism financing offence, in which case the report must be submitted within 24 hours of the suspicion being formed. The AML/CTF Rules set the relevant reporting periods and lodgement periods as required.
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Summary
Reporting obligations have been set by the FTR Act and AML/CTF Act. Regulated entities are required to abide by certain obligations under both Acts. In this module, we have looked at the obligations under both Acts: Significant cash transaction (FTR Act): a physical cash transaction between one person and another that involves $10,000 or more. On 12 December 2008 the threshold transaction (AML/CTF Act) report will come into effect. Suspect transaction (FTR Act): a transaction which a cash dealer has reasonable grounds to suspect may relate to a criminal offence. On 12 December 2008, the suspicious matter (AML/CTF Act) report will come into effect. International funds transfer instruction (FTR Act): an instruction electronically transmitted into or out of Australia, for a funds transfer. On 12 December 2008, the AML/CTF Act report of the same name will come into effect. Cross-border movement physical currency (AML/CTF Act): when a person brings or sends $10,000 or more in physical currency (includes coin and printed money) into or out of Australia. Cross-border movement bearer negotiable instrument (AML/CTF Act): when a person brings a bearer negotiable instrument of any (or no) amount into or out of Australia. This includes monetary instruments such as cheques and travellers cheques. AML/CTF compliance reports (AML/CTF Act): submitted by reporting entities to AUSTRAC regarding their compliance with the AML/CTF Act, regulations and AML/CTF Rules.
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Reporting Obligations Quiz

This quiz will test your understanding of reporting obligations. Question 1 Casino winnings Indicate whether or not the following transaction qualifies as a significant cash transaction. Tim Bow cashes $12,000 in winnings from the casino. This transaction: a) qualifies as a significant cash transaction b) does not qualify as a significant cash transaction Question 2 Wire transfer Indicate whether or not the following transaction qualifies as a significant cash transaction. Che Jinta wire transfers $32,000 from his company account to a personal offshore account. This transaction: a) qualifies as a significant cash transaction b) does not qualify as a significant cash transaction Question 3 Premium payment Indicate whether or not the following transaction qualifies as a significant cash transaction. Jasmine King pays $15,000 in cash as the premium for a new life insurance policy. This transaction: a) qualifies as a significant cash transaction b) does not qualify as a significant cash transaction
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Question 4 Deposit Indicate whether or not the following transaction qualifies as a significant cash transaction. Stephanie opens her account with a brokerage firm by paying $5,000 cash. Next day, she deposits another $7,000 in the account. This transaction: a) qualifies as a significant cash transaction b) does not qualify as a significant cash transaction Question 5 Currency exchanges Indicate whether or not the following scenario merits filing a suspect transaction report (SUSTR). A customer makes a series of currency exchanges, but each is under $10,000. This transaction: a) merits filing a SUSTR b) does not merit filing a SUSTR Question 6 Regular remittances Indicate whether or not the following scenario merits filing a SUSTR. A worker based in Australia is from a foreign country known to be a major narcotics source. The worker regularly makes small cash deposits of $200 and remits the funds to that country. This transaction: a) merits filing a SUSTR b) does not merit filing a SUSTR
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Question 7 Wire transfer Indicate whether or not the following scenario merits filing a SUSTR. A small currency exchange firm receives a large wire transfer of funds from a little-known bank in a tax haven country. The amount of money appears inconsistent with past transactions. This transaction: a) merits filing a SUSTR b) does not merit filing a SUSTR Question 8 Entry with cash Indicate whether or not the following transaction qualifies as a reportable cross-border movement of physical currency (CBM-PC). Sharan Williams flies into Australia carrying USD11,000 in cash. She works for an advertising firm and not for a reporting entity. This transaction: a) qualifies as a reportable cross-border movement of physical currency. b) does not qualify as a reportable cross-border movement of physical currency. Question 9 Client Account Payment Indicate whether or not the following scenario merits filing a SUSTR. A small law firm with small clients in the export-import business starts making large deposits and transfers on behalf of an unnamed client. This transaction: a) merits filing a SUSTR b) does not merit filing a SUSTR
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Question 10 Receipt of IFTI Indicate whether or not the following transaction qualifies as a reportable international funds transfer instruction (IFTI). Cricket Corp is a securities and brokerage firm. It receives an instruction from an overseas entity for the benefit of an individual client in Australia. This transaction a) qualifies as a reportable international funds transfer instruction (IFTI). b) does not qualify as a reportable international funds transfer instruction (IFTI). Question 11 Transmission of funds Indicate whether or not the following transaction qualifies as a reportable IFTI. KHB Corp is a lease finance corporation. It sends an instruction to a bank in the United States for its own account. This transaction a) qualifies as a reportable international funds transfer instruction (IFTI). b) does not qualify as a reportable international funds transfer instruction (IFTI). Question 12 Departing with cash Select the single correct response. Sharron B. Dragon is leaving Australia to travel to Spain, with $12,000 in cash. This means that: a) she must fill in a Cross Border Movement Physical Currency form. b) she does not need to fill in a Cross Border Movement Physical Currency form.
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Question 13 Entry with BNI Ian enters Kingsford-Smith International Airport from Jamaica with travellers cheques equalling $7,500. Which of the following statements is correct (referring to cross-border movement reports)? a) Ian must declare the travellers cheques when passing through customs. b) Ian doesnt need to declare the travellers cheques as they are under $10,000. c) Ian only needs to fill in a report if a Customs or a police officer tells him to do so, regardless of the amount. Question 14 Types of BNI Select one of the examples below that is not classified as a BNI? a) Cheques b) Travellers cheques c) Casino chips d) Promissory notes Question 15 AML/CTF compliance reports Indicate whether or not the following is true or false. AML/CTF compliance reports are to be completed by reporting entities. Reporting and lodgment periods are set in the: a) AML/CTF Act b) AML/CTF Rules Question 16 Future reporting obligations Suspect matters, threshold transactions and IFTIs will come into effect under the AML/CTF Act in: a) December 2007 b) June 2008 c) December 2008
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AML/CTF Programs
Objective
In this module we will address the following: What is an AML/CTF program? What is Part A of an AML/CTF program? What is Part B of an AML/CTF program? When should a customer be identified? How are existing customers treated? What if it is a low-risk service? When can a reporting entity rely on another reporting entitys customer identification? What are General exemptions?
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What is an AML/CTF program?

The Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) requires reporting entities to adopt, maintain and comply with an anti-money laundering and counter-terrorism financing (AML/CTF) program. This requirement is central to the risk-based approach of the AML/CTF Act. An AML/CTF program is divided into Part A (general) and Part B (customer identification). The primary purpose of Part A of an AML/CTF program is to identify, mitigate and manage the risk a reporting entity may reasonably face in providing a designated service that might involve or facilitate money laundering or terrorism financing (ML/TF risk). The purpose of Part B of an AML/CTF program is to set out the applicable identification procedures in relation to different types of customers. There are three types of AML/CTF program: standard, joint and special. A standard AML/CTF program applies to an individual reporting entity. Parts A and B are both required. A joint AML/CTF program applies to each reporting entity that is a member of a designated business group where those members elect to have a joint program. Both Parts A and B are required, but different provisions can be included for the different reporting entities if required. A special AML/CTF program only applies if a reporting entity holds an Australian financial services licence (AFSL) and the only designated service it provides under the AML/CTF Act is to arrange for persons to receive other designated services. Instead of Parts A and B, a special AML/CTF program only sets the reporting entitys applicable customer identification procedures. This is the equivalent of having Part B without Part A.
Risk considerations
The AML/CTF Rules require that in identifying its ML/TF risk a reporting entity must consider the following: its customer types, including any politically exposed persons. For example, a reporting entity may assess the potential exposure to ML/TF risk posed by an individual to be different from that of an offshore trust. the types of designated services it provides. For example, a reporting entity may assess that the potential exposure to ML/TF risk in providing a deposit account is different to the ML/TF risk in providing an international funds transfer service to a person who does not hold an account with the reporting entity.
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the methods by which it delivers designated services. For example, a reporting entity may assess the potential exposure to ML/TF risk for face-to-face transactions as being less than the ML/TF risk for remote access high value funds transfer transactions (e.g. internet banking). the foreign jurisdictions with which it deals. A reporting entity will need to be aware of differences in the legal framework (of foreign jurisdictions with which it deals) that relate to controls against ML/TF and factor these into its AML/CTF program. the provision of designated services through any permanent establishments of the reporting entity in a foreign country. A reporting entity will need to be aware of differences in the legal framework of foreign jurisdictions in which it conducts operations, relating to controls against ML/TF. These should be factored into the AML/CTF program.
AML/CTF Programs Part A (General)

An AML/CTF program must include the following: a risk awareness training program for employees. This should include the obligations the reporting entity has under the AML/CTF Act and Rules, as well as the consequences of non-compliance. The training should also cover the ML/TF risk the reporting entity may reasonably face (and potential consequences of that risk) and the processes and procedures in the reporting entitys AML/CTF program that are relevant to the functions of the work carried out by the employee. an employee due diligence program. A reporting entity should consider the potential ML/TF risks associated with prospective employees and apply screening procedures if appropriate. This also applies to assessing the need for re-screening employees who are transferred or promoted. For example, a reporting entity may determine that frontline staff present a different potential for ML/TF risk than staff in a capital markets area or private banking unit. Similarly, in a casino, cashier staff may present a different ML/TF risk to bar staff. oversight by boards and senior management. Part A of a reporting entitys AML/CTF program must be approved by its governing board and senior management. Under a joint program, if each member of the designated business group is related to each other, then the approval may be given by the board and senior management of the main holding company of the group. an AML/CTF compliance officer. A reporting entity must designate an AML/CTF Compliance Officer at management level. Under a joint program this officer can represent the entire designated business group.
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an independent review. Part A of a reporting entitys AML/CTF program must undergo regular independent review by either an internal or external party. The review is to assess Part As effectiveness regarding the reporting entitys ML/TF risk, whether Part A complies with the AML/CTF Rules and has been effectively implemented and whether the reporting entity has itself complied with Part A. A report must be given to the governing board and senior management of the reporting entity. AUSTRAC feedback. Feedback from AUSTRAC about the reporting entitys ML/TF risk management performance must be taken into consideration by the reporting entity. Such feedback could be given in a number of ways such as an audit of the reporting entity by AUSTRAC. permanent establishments in a foreign country. If a reporting entity has a permanent establishment outside Australia, only the following aspects of Part A of the AML/CTF program also relate to the permanent establishment: oversight by governing board and senior management AML/CTF Compliance Officer independent review AUSTRAC feedback
If the permanent establishment is in a jurisdiction with AML/CTF laws comparable to Australias, only minimal additional systems and controls need to be considered.
AML/CTF Programs Part B (Customer identification)

The AML/CTF Rules for Part B of an AML/CTF program set out the minimum know your customer (KYC) information a reporting entity must collect and verify about its customers. Additional KYC information may need to be collected depending on the reporting entitys risk assessment of each customer. A reporting entity should have appropriate risk-based systems and controls to assist in meeting its Part B requirements. These systems and controls are based on the nature, size and complexity of the reporting entitys business and the ML/TF risk faced. The AML/CTF Rules set different identification and verification requirements for different types of customers: individuals companies (both domestic and registered foreign companies) trustees partnerships incorporated and unincorporated associations registered cooperatives government bodies
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The use of reliable and independent documentation and/or electronic data sources is common to the various methods of verification. A reporting entity determines what is reliable and independent according to its own risk-based systems and controls. Any discrepancies arising during the verification of KYC information must be addressed to ensure the reporting entity is satisfied that an individual customer is who they claim to be, or that a non-individual customer exists and has provided other required details (for example, about company owners or trust beneficiaries). In addition, for medium and lower risk individuals, the AML/CTF Rules provide safe harbour procedures which a reporting entity may choose to use. The safe harbour procedures set less complex verification methods after the minimum KYC information has been collected. Similarly, the AML/CTF Rules provide optional simplified verification procedures for certain companies and trustees. There are also specific requirements in the AML/CTF Rules for identifying agents and verifying officers of customers. For more information on the AML/CTF Rules and customer identification and verification click on the link. NOTE: Reporting entities need to consider their obligations under other legislation, such as the Privacy Act 1988, when deciding what information to collect from customers.
Customer Due Diligence

When should a customer be identified?
The AML/CTF Act requires a reporting entity to verify a customers identity before providing a designated service to the customer. Only in special circumstances specified in the AML/CTF Rules may the procedure be carried out after the provision of a designated service.
Existing customers
Under the AML/CTF Act pre-commencement customers are not required to be identified unless a suspicious matter reporting obligation arises in relation to that customer. Pre-commencement means prior to the relevant section of the AML/CTF Act coming into effect, which in this case is 12 December 2007. The suspicious matter reporting obligation under the AML/CTF Act comes into effect in December 2008.
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Low-risk services
If, under the AML/CTF Rules, a designated service is taken to be a low-risk service, it is not necessary to identify a customer of that service unless a suspicious matter reporting obligation arises in relation to that customer.
Reporting entity relying on another reporting entitys customer identification

Under the AML/CTF Act it is possible for a reporting entity to rely on an applicable customer identification procedure carried out by another reporting entity. This can occur when a reporting entity has identified a customer in accordance with the AML/CTF Rules (for example, by correctly undertaking the procedures in Part B of the reporting entitys AML/CTF program). The customer then becomes a customer of a second reporting entity. The AML/CTF Act can then be considered to apply as if the second reporting entity had carried out the customer identification procedure itself. However, the second reporting entity must still comply with the recordkeeping requirements of the AML/CTF Act. Any additional conditions set by the AML/CTF Rules must also be satisfied.
Ongoing customer due diligence

From 12 December 2008, reporting entities will have ongoing customer due diligence obligations under the AML/CTF Act and AML/CTF Rules. These obligations relate to monitoring customers in relation to ML/TF risk.
General exemptions
The AML/CTF Rules can specify certain exemptions from the customer identification obligations of the AML/CTF Act. These include exempting a designated service from: all identification provisions some identification provisions all identification provisions in specified circumstances some identification provisions in specified circumstances
The AML/CTF Act also exempts reporting entities permanent establishments in foreign countries (that is, not in Australia).
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Certain designated services relating to pensions, annuities, superannuation and retirement savings accounts are also exempt. This includes an AFSL holder arranging for any of those services to be provided to a person (where that is the extent of the service provided by the AFSL holder).
Summary
The AML/CTF Act requires reporting entities to adopt, maintain and comply with an anti-money laundering and counter-terrorism financing program, which is divided into Part A (general) and Part B (customer identification).
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AML/CTF Programs Quiz

This quiz will test your understanding of AML/CTF programs. Question 1 Select the single correct response. The AML/CTF Act: a) suggests that reporting entities may opt to participate in an AML/CTF program. b) requires reporting entities to adopt, maintain and comply with an AML/CTF program. Question 2 Which AML/CTF program applies to the following: Reporting entities that are members of a designated business group may elect to have this type of program apply to the group: a) special b) joint c) standard Question 3 Indicate whether or not the following is true or false. A special AML/CTF program applies: a) to all individual reporting entities. Parts A and B are both required. b) only if a reporting entity holds an Australian Financial Service Licence and makes arrangements for customers to receive other designated services. Question 4 Select the single correct response. Part B of an AML/CTF program: a) sets out applicable customer identification procedures b) must include feedback from AUSTRAC
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Question 5 What must be considered when identifying ML/TF risks? Select the incorrect response from the alternatives below. a) methods for delivery of designated services. b) the foreign jurisdictions being dealt with. c) customers bank balance. d) the designated service provided. Question 6 Part A of an AML/CTF program does not include: a) risk awareness training programs for employees. b) requirements for identification and verification for different types of customers. c) AUSTRAC feedback. d) AML/CTF Compliance Officer. e) employee due diligence program. Question 7 Indicate whether or not the following is True or False. As part of the employee due diligence program, only new employees must be assessed and screened for AML/CTF risks. Question 8 Indicate whether or not the following is True or False. A reporting entity can rely on another reporting entitys customer identification procedure. Question 9 Indicate whether or not the following is True or False. Reporting entities providing designated services at permanent establishments in foreign countries are exempt from an AML/CTF program.
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Post-assessment
This assessment will test your understanding of anti-money laundering and terrorism financing and your knowledge of customer concepts. There is a single correct response for each question. Question 1 money laundering Why do criminals launder money? a) Through this activity, criminals can transport illegally acquired funds to different countries without getting caught. b) Criminals want to protect the money that they have earned through criminal activities. c) Criminals try to steal money from the bank that they use for money laundering activities. d) Criminals want to invest their money in legal activities. Criminals launder money because: i a, b, c ii a, b, d iii b, c, d Question 2 money laundering Identify the placement techniques in the following statements: a) A construction worker in Dubai uses a non-licensed alternative remittance system to remit legal funds to his family in India. b) A suspicious customer from a drug-producing country deposits US $100,000 in his offshore bank account. c) A doctor in Alabama makes a monthly single cash deposit of US $9,000 in his local bank. No transaction report is filed. d) A drug smuggler uses illegal funds to purchase diamonds. He pays cash for them. Placement techniques are used in: i a and b ii a and d iii b and c iv b and d
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Question 3 money laundering Indicate whether the following statement is True or False. Money launderers often use professional intermediaries to layer their illegal funds. These professional intermediaries include lawyers, company formation agents, accountants and other professionals working in non-financial institutions. A banker is not generally regarded as a professional intermediary because he works in a financial institution. Question 4 layering techniques Indicate whether the following statement is True or False. Layering techniques include: giving bearer shares in a shell company to an individual who is not affiliated with the company; hiring a lawyer to oversee company accounts in offshore jurisdictions; and transferring funds to the offshore bank account of a shell company.
Question 5 placement techniques A restaurant receives $3,000,000 in cash over a period of time from an unnamed source. The restaurant deposits the funds into a bank account. Against this account, cheques are written for the benefit of an offshore company. The offshore company uses the money to pay for imports of furniture from a well-known Australian furniture company. In relation to the example above, which statement best describes the placement stage? a) The restaurant deposits the money into a bank account. b) The money is transferred to an offshore company. c) The offshore company buys furniture from an Australian company.
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Question 6 layering techniques A restaurant receives $3,000,000 in cash over a period of time from an unnamed source. The restaurant deposits the funds into a bank account. Against this account, cheques are written for the benefit of an offshore company. The offshore company uses the money to pay for imports of furniture from a well-known Australian furniture company. In relation to the example above, which statement best describes the layering stage? a) The restaurant deposits the money into a bank account. b) The money is transferred to an offshore company. c) The offshore company buys furniture from an Australian company. Question 7 integration techniques A restaurant receives $3,000,000 in cash over a period of time from an unnamed source. The restaurant deposits the funds into a bank account. Against this account, cheques are written for the benefit of an offshore company. The offshore company uses the money to pay for imports of furniture from a well-known Australian furniture company. In relation to the example above, which statement best describes the integration stage? a) The restaurant deposits the money into a bank account. b) The money is transferred to an offshore company. c) The offshore company buys furniture from an Australian company. Question 8 placement techniques Some institutions may be used by criminals to transfer and hide illegal wealth. The institutions are often located in countries with well-developed secrecy laws and attractive tax structures. These institutions are called: a) offshore banks b) trusts c) shell companies d) front companies
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Question 9 money laundering Some legal entities create a layer of anonymity between assets and funds and the individuals with interests in those assets or funds. Generally, these entities exist solely on paper although they are often represented by the owners to be actual, operational businesses. These entities are called: a) offshore banks b) trusts c) shell companies d) front companies Question 10 money laundering Legal devices can be used to set up an entity to segregate assets or funds managed by an individual or institution for the benefit of a specified beneficiary. The deed establishing the entity does not necessarily name the beneficiary but this person can control the entity's assets and funds. Such entities are called: a) offshore banks b) trusts c) shell companies d) front companies Question 11 stages of money laundering Indicate whether the following statement is True or False. Placement, layering and integration can be achieved using a single money laundering technique. Question 12 money laundering Indicate whether the following statement is True or False. Cash-intensive businesses such as newspaper stands, laundromats, video game arcades, bars and restaurants are good placement vehicles. Question 13 stages of money laundering Indicate whether the following statement is True or False. Integration cannot happen without layering because integration requires complex movement and disguising of funds as a pre-condition.
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Question 14 stages of money laundering Indicate whether the following statement is True or False. Of the three stages (placement, layering and integration), generally illegal money is most difficult to trace at the integration stage. Question 15 know your customer This risk is defined as the potential that adverse publicity regarding a bank's business practices and associations, whether accurate or not, will cause a loss of confidence in the integrity of the institution. This is a significant risk factor for banks as their businesses depend on maintaining customer and marketplace confidence. Which type of risk is this? This type of risk is known as: a) operational risk b) legal risk c) concentration risk d) reputational risk Question 16 know your customer One type of risk is the risk of failed internal control processes, people and systems caused by external risk factors such as money laundering activities. If a bank is unable to manage this risk effectively, it can result in exposure to legal action, reputational risks and financial losses. This type of risk is known as: a) operational risk b) legal risk c) concentration risk d) reputational risk
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Question 17 know your customer Another type of risk is the risk of leaving your business open to law suits from stakeholders because of failed internal procedures, such as the KYC policy. The penalties could be fines, criminal liabilities or special penalties. The cost of a legal battle can be extremely high but even more detrimental are the implications for the reputation of an institution that it is unable to protect itself from litigation because of a failure to identify customers and their businesses. This type of risk is: a) operational risk b) legal risk c) concentration risk d) reputational risk Question 18 know your customer Another type of risk applies to both the assets and liabilities sides of the balance sheet. A loss on either side of the balance sheet could have a big impact on an institution because of the size of the exposure or dependence on a single entity (or a related group of entities). Financial institutions, in particular banks, require their credit departments to have information systems, which identify customers with excessive credit facilities. These databases are maintained to ensure that there is never too much exposure to a single customer or a company. This type of risk is: a) operational risk b) legal risk c) concentration risk d) reputational risk Question 19 know your customer Indicate whether the following statement is True or False. When conducting customer identification, certain customers require enhanced due diligence. Trusts, nominees and fiduciaries need to be monitored closely because by definition they are regarded as potentially high-risk money laundering conduits.
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Question 20 know your customer Indicate whether the following statement is True or False. When conducting customer identification, certain customers require enhanced due diligence. Customers with large and unverified deposits pose higher risk to financial institutions. Question 21 know your customer Indicate whether the following statement is True or False. When conducting customer identification, certain customers require enhanced due diligence. Non-face-to-face customers are generally acceptable without enhanced due diligence when they are referred by trustworthy customers. Enhanced due diligence needs only to be applied to non-face-to-face customers if there are unusual circumstances that arouse suspicion (e.g. the customers have unreasonable transaction requests). Question 22 know your customer There are different ways to assess customers for ML/TF risks, including: a) reviewing type of person (individual, company, trust, etc.) b) reviewing type of account (business, fiduciary, etc.) c) reviewing country of origin d) (a) and (c ) above e) (a), (b) and (c) above Question 23 money laundering Indicate whether the following statement is True or False. Indicate whether the following statement is true or false. A government regulator regulates publicly listed companies. Therefore, anti-money laundering compliance procedures do not need to be implemented when engaging in financial transactions with such entities.
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Question 24 know your customer A financial institution has a travel agency as a customer. The travel agency conducts a very high percentage of its business in cash compared to other travel agencies in the same market. The principal AML responsibility of the financial institution is to ensure that: a) proper due diligence is done at account opening. b) proper due diligence is done at account opening and the customer and its accounts are properly monitored. c) the customer and its accounts are properly monitored. Question 25 know your customer When conducting customer identification, certain customers require enhanced due diligence. In this context, identify the following statement as True or False. It is always risky to conduct business with correspondent banks because correspondent accounts act as layering techniques for many money launderers. Enhanced due diligence is needed for such customers. Question 26 know your customer Indicate whether the following statement is True or False. When conducting customer identification, certain customers require enhanced due diligence. Non-profit organisations can be risky customers because they receive deposits from many unknown sources and are free to disburse funds to multiple sources for non-profit purposes. These charitable donations often cannot be verified and enhanced due diligence should be applied to these customers. Enhanced due diligence should be applied to these customers.
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Question 27 know your customer Penny Bank has a customer who is a lawyer. The lawyer maintains two accounts at the bank. One is his own personal transacting account and the second is an account for a businessman in a foreign country. This overseas businessman regularly deposits large sums of money in the second account. Simultaneously, he places 1% of the total funds in his lawyers account at Penny Bank. This activity has been taking place for just over a year. Which of the following money laundering risks does Penny Bank face? a) Reputational risk because an account maintained by a professional intermediary is considered a high-risk account and there is always a possibility the bank may be embroiled in a scandal. b) Legal risk because the bank may be identified as a collaborator of illegal activities if the lawyer is proven to be laundering funds. c) Concentration risk because the bank has a large exposure to the lawyer. i. a and b ii. a and c iii. b and c Question 28 know your customer Indicate whether the following statement is True or False Banking secrecy refers to the non-disclosure by a bank of the name or details of a customer. Corporate secrecy refers to the situation when the name of a corporation is known but the identity of its shareholders is not known. Question 29 AUSTRACs role Which of the following functions is not part of AUSTRACs role? a) Receiving cash transaction reports from regulated entities. b) Regulatory licensing of financial institutions. c) Inspecting cash dealers and solicitors to ensure compliance with the FTR Act. d) Educating and guiding regulated entities and the public on the FTR Act.
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Question 30 AUSTRACs role What is the scope of AUSTRAC's responsibilities? a) AUSTRAC monitors AML compliance by 'cash dealers' and supports enforcement agencies in their fight against money laundering. b) AUSTRAC monitors and directly enforces AML compliance by banks and insurance companies. c) AUSTRAC monitors and directly enforces AML compliance by all businesses defined as 'cash dealers'. Question 31 reporting obligations Which of the following statements is correct? a) A cash dealer has an international funds transfer instruction reporting obligation only if the cash dealer is a remittance business. b) A cash dealer has an international funds transfer instruction reporting obligation only if the cash dealer is an authorised deposit-taking institution (ADI). c) All cash dealers are subject to the regular international funds transfer instruction reporting obligations. Question 32 reporting obligations Indicate whether the following statement is True or False. Suspect transactions need only be reported by banks. Question 33 reporting obligations Indicate whether the following statement is True or False. International funds transfer instructions need to be reported by cash dealers only when they are senders of funds. Question 34 reporting obligations What is a significant cash transaction? a) A cash transaction or wire transfer involving the transfer of $10,000 or more. b) A cash transaction involving the transfer of $20,000 or more. c) A cash transaction involving the transfer of $10,000 or more.
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Question 35 reporting obligations Indicate whether or not the transaction described below qualifies or does not qualify as a significant cash transaction. Mary Brown wire transfers $12,000 from her account to an account in the Cayman Islands. This transaction: a) qualifies as a significant cash transaction. b) does not qualify as a significant cash transaction. Question 36 reporting obligations Indicate whether the following statement is True or False. A suspect transaction report is not required for transactions less than $5,000 in value. Question 37 FTR Act Indicate whether the following statement is True or False. According to the KYC requirements under the FTR Act, an account may involve a facility for depositing or withdrawing cash, paying cheques or payment orders, or safety deposit. Question 38 reporting obligations Natasha has a bank account with Bank of Tricky. Her current account balance is $103.54. The only deposits in Natashas bank account are her fortnightly salary payment of $1,800. On Monday Natasha deposits $7,500 in cash and on Friday she deposits $9,500 in cash. What form should the teller complete and send to AUSTRAC? a) A suspect transaction report b) An international funds transfer instruction report c) A significant cash transaction report d) A cross-border movement of physical currency report
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Question 39 reporting obligations David arrives home to Australia from his holiday in Austria, bringing with him 6,509 EURO (approximately equivalent to AUD10,566). Custom officials need to forward a report of this money to AUSTRAC via: a) An international funds transfer instruction report b) A cross-border movement of physical currency report c) A cross-border movement of bearer negotiable instruments d) An AML/CTF compliance report Question 40 CBM-BNI Indicate whether the following statement is True or False. Bearer negotiable instruments of $10,000 or more only need to be reported when entering Australia. Question 41 CBM-BNI Which of the following is not a bearer negotiable instrument? a) travellers cheques b) money orders c) bullion d) bearer bonds Question 42 remitters registration Indicate whether the following statement is True or False. All remittance service providers must register with AUSTRAC. Question 43 remitters registration Which of the following is not an example of a typical alternative remittance process? a) A customer places an order with their chosen remitter. b) The remitter identifies their customer by verifying two original documents. c) The remitters agent delivers funds according to an instruction.
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Question 44 AML/CTF program The primary purpose of Part A of the AML/CTF program is: a) to set out the applicable customer identification procedures. b) to identify, mitigate and manage the ML/TF risks to the reporting entity. c) to register designated remittance services with AUSTRAC. Question 45 AML/CTF program A joint AML/CTF program is: a) a program that applies to each reporting entity that is a member of a designated business group where those members elect to have a joint program. b) a program that consists of Parts A and B. c) a program where joint reporting entities hold an Australia financial service licence. Question 46 terrorism financing Indicate whether the following statement is True or False. Terrorist organisations need money to sustain media campaigns and win political support. Question 47 AML/CTF Act A designated business group comprises two or more members which are: a) related to each other. b) reporting entities (or foreign companies who would be reporting entities if resident in Australia). c) parties to a joint venture agreement. d) both a) and b), or c) if applicable. Question 48 AML/CTF Rules Indicate whether the following statement is True or False. The AML/CTF Rules set out additional and/or clarified obligations of reporting entities.
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Answers
Pre-assessment 1. Answer: a 2. Answer: c 3. Answer: b 4. Answer: False 5. Answer: e 6. Answer: False 7. Answer: b 8. Answer: e 9. Answer: False 10. Answer: a 11. Answer: b 12. Answer: c 13. Answer: True 14. Answer: False 15. Answer: False 16. Answer: False 17. Answer: True 18. Answer: False 19. Answer: True 20. Answer: a
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Money Laundering Quiz 1. a) Correct. Money laundering involves the disguising and processing of criminally obtained funds. The underlying crime (also called the predicate crime) can be varied and may involve crimes such as drug trafficking, smuggling, theft and extortion. 2. e) Correct. Money laundering helps criminals to hide criminally obtained funds, manipulate such funds and extend their reach into legitimate business activities. 3. b) Correct. Money laundering seriously weakens the credibility of the financial system and tilts control towards criminal elements in society. 4. c) Correct. AUSTRAC is an analytical conduit between the broader financial community and AUSTRACs law enforcement, revenue collection, national security and social justice partner agencies. AUSTRAC collects and analyses financial transaction reports from regulated entities and disseminates the resulting financial intelligence to these partner agencies. AUSTRAC's partner agencies can also directly access the AUSTRAC database. 5. b) Correct. AUSTRAC does not have any jurisdiction over the licensing of financial institutions. It is focused on administering the FTR Act and AML/CTF Act. 6. b) Correct. At this stage, money launderers are trying to distance themselves from the illegal monies as much as they can. To do this, they move the funds by transferring them through numerous accounts and across many borders. They can also use professionals, such as lawyers, to act as additional buffers in the layering process. 7. a) Correct. Integration is the final stage in the money laundering process where funds are legitimised. In this case, asset purchases and business investments were used as a means to integrate the funds into the economy and thereby complete the money laundering cycle. 8. a) Correct. It is easiest to detect money laundering at the placement stage. At this stage, funds are closest to the criminals and criminal activities which generate the funds and are often in the form of cash.
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Placement Techniques Quiz 1. a) Correct. At the placement stage, illegal funds are brought into the financial system. 2. b) Correct 3. d) Correct 4. c) Correct 5. c) Correct 6. b) Correct 7. a) Correct 8. c) Correct
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Layering Techniques Quiz 1. a) Correct 2. c) Correct 3. d) Correct 4. c) Correct 5. a) Correct 6. e) Correct. The third party buyer deposits the funds for the final purchase of the building into a bank account in an offshore bank. 7. True Correct.
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Integration Techniques Quiz 1. b) Correct. Money laundering does not have to happen in three stages. These stages can be combined or skipped. For example, a criminal could go directly from placement to integration by placing cash into the legal system by purchasing a debit card and then using this card to purchase a legitimate asset. 2. a) Correct. At the integration stage illegal money is difficult to trace as it is used in a range of legitimate transactions and generally does not have an audit trail. Placement is the stage at which illegal money can most easily be recognised. 3. d) Correct 4. c) Correct 5. b) Correct 6. d) Correct 7. a) Correct 8. a) Correct 9. a) Correct. An example of a technique covering all three stages is business recycling. 10. True Correct. All these businesses have high cash sales and high turnover.
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Terrorism Financing Quiz 1. b) Correct. Often, in terrorist financing, the process involves moving legitimate funds into the control of terrorist organisations. This is sometimes known as reverse money laundering. 2. b) Correct. Terrorist organisations are forming global networks which are highly dispersed and difficult to detect. 3. a) Correct. Often, this technique is combined with setting up accounts using false identities. 4. b) Correct. For example, Islamic charities have been extensively used by the Middle East terrorist organisations. 5. b) Correct. Counter-terrorism regulations tend to have a broad scope, which includes proscribing financing activities by terrorist organisations. 6. a) Correct. Terrorist groups can also obtain money from legitimate sources such as charities, religious groups, wealthy individual sponsors and commercial enterprises. 7. a) Correct 8. b) Correct 9. c) Correct
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Know Your Customer Quiz 1. d) Correct 2. c) Correct. To manage risk, it is important for financial institutions to implement control measures such as compliance teams that make sure that KYC and related policies are implemented effectively. 3. d) Correct 4. a) Correct. At this stage, it is essential which financial institutions develop and apply customer assessments that enable them to recognise customers that may be high risk. 5. c) Correct. When monitoring accounts and transactions, it is imperative that high-risk customers and their account activity be reviewed regularly to minimise risk. 6. b) Correct. As part of the customer identification procedure, financial institutions gather detailed information about a customer. This information can be as basic as the customer's name and address or as confidential as the customer's banking history. 7. b) Correct 8. c) Correct. Although the new customer is listed, it is a non-bank financial company. Therefore, enhanced due diligence is recommended. 9. b) Correct. As this situation involves an offshore jurisdiction, you may decide that enhanced due diligence is required. 10. c) Correct;
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Overview of the Acts Quiz 1. b) Correct. The definition of cash dealer covers a wide range of entities that deal in financial products. 2. b) Correct. Cash dealers need to report only significant cash transactions of $10,000 or more. 3. a) Correct. All cash dealers must report suspect transactions, irrespective of the type or value of the transaction. 4. a) Correct. IFTIs need to be reported by cash dealers, both when they are senders and recipients (unless an exception applies). 5. a) Correct. This information must be obtained as part of a cash dealer's FTR Act obligations. 6. b) Correct. Cash dealers are not required to have an AML/CTF program under the FTR Act. 7. b) Correct. AUSTRAC will continue to regulate the FTR Act. 8. b) Correct. The AML/CTF Act requires all reporting entities to adopt, maintain and comply with an AML/CTF program. 9. a) Correct 10. c) Correct. Each member elects in writing to be a member. 11. a) Correct. This includes identifying the level and extent of noncompliance to formulate an appropriate rectification plan.
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Remittance Providers Registration Quiz 1. False Correct. Some remittance services do use their own system, but many others use the formal banking system, often bundling together money from several customers. 2. b Correct. Alternative remittance systems, although operating outside the formal banking system, are not illegal in Australia. They are a legitimate and widely recognised method of transferring money and provide a valuable service to countries with no formal banking structures. 3. b Correct. This is an example of an alternative remittance. Depending on their arrangement Emily and Briony may never physically send money between one another. 4. True Correct. Under the AML/CTF Act, certain providers of remittance services must register with AUSTRAC. The AML/CTF Act calls these registrable designated remittance services. It is an offence to provide such services without being registered.
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Reporting Obligations Quiz 1. a) Correct. The transaction involves a transfer of cash of $10,000 or more. 2. b) Correct. The transaction involves a transfer of $10,000 or more, but it is a wire transfer which does not involve cash. 3. a) Correct. Payment of premium for a life insurance policy in cash is reportable. 4. b) Correct. Each transaction is less than $10,000. However, criminals may engage in many small cash transactions to evade the reporting requirements. This could be a potential suspect transaction. 5. a) Correct. While this is a matter of judgment, filing a SUSTR may be appropriate. A SUSTR can be filed for either a single transaction or a series of multiple transactions of any value. 6. b) Correct. While this is a matter of judgment, based on the facts provided, filing a SUSTR may not be required. Although the country involved raises suspicion, the other aspects of the transactions appear to be consistent with the practice by domestic workers of sending money home to their families. 7. a) Correct. While this is a matter of judgment, based on the facts provided, filing a SUSTR may be appropriate. The business purpose of the transaction is unclear, a tax haven country is involved and the amount of funds is inconsistent with past dealings. At a minimum, further investigation may be justified. 8. a) Correct. Under the AML/CTF Act, everyone including members of the public must file a CBM-PC to report the physical transfer of $10,000 or more in cash (Australian or the foreign equivalent) into or out of Australia. 9. a) Correct. While this is a matter of judgment, based on the facts provided, filing a SUSTR may be appropriate. Intermediaries are often used by money launderers, an unnamed client is involved and the transaction is inconsistent with the law firm's general business. At a minimum, further investigation may be justified. 10. a) Correct. The transaction involves an IFTI and a cash dealer that is neither an authorised deposit-taking institution (ADI) nor acting on behalf of an ADI. 11. a) Correct. The transmission of an IFTI by a cash dealer that is not an authorised deposit-taking institution (ADI) and not acting on behalf of an ADI is a reportable transaction. 12. True Correct. Under the AML/CTF Act, everyone including members of the public must file a CBM-PC to report the physical transfer of $10,000 or more in cash (Australian or the foreign equivalent) into or out of Australia.
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13. c) Correct. While there is an obligation to report bearer negotiable instruments of any amount, this is only done when a Customs or police officer requires it. In this scenario we do not know if this will occur. 14. c) Correct 15. b) Correct. The reporting and lodgment periods are set in the AML/CTF Rules. The Act allows the Rules to be made. 16. c) Correct. Reporting obligations under the AML/CTF Act will come into affect.
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Answers - AML/CTF Programs Quiz 1. False Correct. The AML/CTF Act requires reporting entities to adopt, maintain and comply with an AML/CTF program. 2. b) Correct 3. b) Correct. A special AML/CTF program only applies if a reporting entity holds an Australian Financial Service Licence and makes arrangements for customers to receive other designated services. 4. a) Correct 5. c) Correct 6. b) Correct 7. False Correct. Employees who are transferred or promoted within the organisation may present a different AML/CTF risk therefore need to be re-screened. 8. True Correct. However, the AML/CTF Act and AML/CTF Rules set certain requirements that must be followed. 9. False Correct. The AML/CTF Rules set certain requirements for permanent establishments.
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Post-assessment 1. Answer: 2. Answer: 3. Answer: 4. Answer: 5. Answer: 6. Answer: 7. Answer: 8. Answer: 9. Answer: 10. Answer: 11. Answer: 12. Answer: 13. Answer: 14. Answer: 15. Answer: 16. Answer: 17. Answer: 18. Answer: 19. Answer: 20. Answer: 21. Answer: 22. Answer: 23. Answer: 24. Answer: 25. Answer: 26. Answer: 27. Answer: 28. Answer: 29. Answer: 30. Answer: 31. Answer: 32. Answer: 33. Answer: 34. Answer: 35. Answer: 36. Answer: 37. Answer: 38. Answer: 39. Answer: 40. Answer: 41. Answer: 42. Answer: 43. Answer: 44. Answer: 45. Answer: 46. Answer: 47. Answer: 48. Answer: ii iv False True a b c a c b True True False True d a b c True True False e False b True True i True b a c False False c b False True a b False c False b b a True d True
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AUSTRAC intends to maintain its Introduction to AML/CTF e-learning application as an evolving resource to reflect changing patterns of behaviour, legislative development and the broader Anti-Money Laundering environment. Should you require further information on the e-learning application, AUSTRAC's operations, the Financial Transaction Reports Act 1988 (FTR Act) or the Anti-Money Laundering and CounterTerrorism Financing Act 2006 (AML/CTF Act), please contact: AUSTRAC Help Desk via: help_desk@austrac.gov.au or Telephone 1300 021 037. 2007, Commonwealth of Australia Each cash dealer, reporting entity or other stakeholder may use this material internally as an educational tool. It may view and use this application solely in the usual operation of its web browser in visiting the AUSTRAC Site (the Site). Except for this purpose, the material may not otherwise be used, copied, reproduced, published, altered or transmitted in any form or by any means in whole or part (except where such use constitutes fair dealing under the Copyright Act 1968 (Cth)) without the prior written approval of the Commonwealth. Requests and inquiries concerning reproduction and rights should be addressed to the Commonwealth Copyright Administration, Attorney-Generals Department, Robert Garran Offices, National Circuit, Barton ACT 2600 or posted at http://www.ag.gov.au/cca, with a copy to AUSTRAC. The Commonwealth accepts no liability in regard to any loss or damage suffered by you resulting from a loss of service, malfunction, computer viruses, or any other cause connected with your use of the Site. The information contained in this application is intended only to provide a summary and general overview on these matters. The Introduction to AML/CTF Program is not intended to be comprehensive nor does it constitute legal advice. AUSTRAC may from time to time amend legislative instruments under the legislation it administers and this may impact on the form and content of the AML. The AML contains statements of policy that reflect AUSTRACs administration of the legislation in performing its statutory functions. The Commonwealth accepts no liability for any loss suffered as a result of reliance it. AUSTRAC recommends that cash dealers, reporting entities and other stakeholders should obtain their own legal and/or technical advice on matters arising from the AML/CTF Act, the FTR Act, regulations and/or the published AntiMoney Laundering/Counter-Terrorism Financing Rules (AML/CTF Rules) tailored to the cash dealer, reporting entity or other stakeholders specific circumstances, prior to making any decisions. The information contained in AML is current as at the version date which appears on AML. Your use of this application does not relieve you of any obligations you may have under any legislation, subordinate legislation, rules, requirements or standards, including but not limited to the AML/CTF Act and the FTR Act. Cash dealers, reporting entities and other stakeholders using this application should be aware of any obligations they may have under the Privacy Act 1988 (Cth). These obligations could include a duty of confidentiality to their customers and not using personal information for an improper purpose. Further information regarding privacy obligations can be obtained from the Privacy Commission via www.privacy.gov.au or telephone 1300 363 992. Click here for AUSTRAC's privacy statement.
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Introduction to AML/CTF

Introduction to AML/CTF - Last modified: 12 December 2007

Introduction to AML/CTF - Last modified: 12 December 2007

Introduction to AML/CTF - Last modified: 12 December 2007

Introduction to AML/CTF - Last modified: 12 December 2007

Introduction to AML/CTF - Last modified: 12 December 2007

Introduction to AML/CTF - Last modified: 12 December 2007

Introduction to AML/CTF - Last modified: 12 December 2007

What is money laundering?

Why do criminals launder money and what are the consequences?

There are severe economic and social consequences of money laundering.

Introduction to AML/CTF - Last modified: 12 December 2007

What is AUSTRACs role in the fight against money laundering?

Example: third parties used to launder funds

Introduction to AML/CTF - Last modified: 12 December 2007

What are the three stages of money laundering?

Introduction to AML/CTF - Last modified: 12 December 2007

The Spence Network Case

The Spence Network Case Takeaways

The Douglas Case

Introduction to AML/CTF - Last modified: 12 December 2007

Introduction to AML/CTF - Last modified: 12 December 2007

Introduction to AML/CTF - Last modified: 12 December 2007

Money Laundering Quiz

Introduction to AML/CTF - Last modified: 12 December 2007

Introduction to AML/CTF - Last modified: 12 December 2007

Introduction to AML/CTF - Last modified: 12 December 2007

Smurfing and structuring

Introduction to AML/CTF - Last modified: 12 December 2007

Introduction to AML/CTF - Last modified: 12 December 2007

Introduction to AML/CTF - Last modified: 12 December 2007

Introduction to AML/CTF - Last modified: 12 December 2007

Introduction to AML/CTF - Last modified: 12 December 2007

Introduction to AML/CTF - Last modified: 12 December 2007

Placement Techniques Quiz

Introduction to AML/CTF - Last modified: 12 December 2007

Introduction to AML/CTF - Last modified: 12 December 2007

Introduction to AML/CTF - Last modified: 12 December 2007

Introduction to AML/CTF - Last modified: 12 December 2007

Electronic funds transfers

Introduction to AML/CTF - Last modified: 12 December 2007

Introduction to AML/CTF - Last modified: 12 December 2007

Introduction to AML/CTF - Last modified: 12 December 2007

Introduction to AML/CTF - Last modified: 12 December 2007

Layering Techniques Quiz

Introduction to AML/CTF - Last modified: 12 December 2007

Introduction to AML/CTF - Last modified: 12 December 2007

Introduction to AML/CTF - Last modified: 12 December 2007

Introduction to AML/CTF - Last modified: 12 December 2007

Credit and debit cards

Introduction to AML/CTF - Last modified: 12 December 2007

Asset sales and purchases

Introduction to AML/CTF - Last modified: 12 December 2007

Introduction to AML/CTF - Last modified: 12 December 2007

Introduction to AML/CTF - Last modified: 12 December 2007

Integration Techniques Quiz

Introduction to AML/CTF - Last modified: 12 December 2007

Introduction to AML/CTF - Last modified: 12 December 2007

Introduction to AML/CTF - Last modified: 12 December 2007

Introduction to AML/CTF - Last modified: 12 December 2007

What is terrorism and terrorism financing?

The role of money

Introduction to AML/CTF - Last modified: 12 December 2007