...MONEY LAUNDERING RED FLAGS WIRE TRANSFERS This document lists various transactions and activities that may indicate potential money laundering. While not all-inclusive, the list does reflect ways that launderers have been known to operate. Transactions or activities listed here may not necessarily be indicative of money laundering if they are consistent with a customer’s legitimate business. Also, many of the “red flags” involve more than one type of transaction. 1. Wire transfer to bank secrecy haven countries. Transfers to well known “secrecy havens.” 2. Incoming/Outgoing wire transfers with instructions to pay upon proper identification. The instructions to the receiving bank are to “pay upon proper identification.” If paid for in cash, the amount may be just under $10,000 so no Currency Transaction Report is required. The purchase may be made with numerous official checks or other monetary instruments. The amount of the transfer may be large, or the funds may be sent to a foreign country. 3. Outgoing wire transfers requested by non-account holders. If paid in cash, the amount may be just under $10,000 to avoid a Currency Transaction Report. Alternatively, the transfer may be paid with several official checks or other monetary instruments. The funds may be directed to a foreign country. 4. Frequent wire transfers with no apparent business reason. A customer’s frequent wire transfer activity is not justified by the nature of their business. 5. High volume of wire transfers...
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...Effects of USA PATRIOT Act on Banking Privacy Introduction On September 11, 2001, the United States was attacked by the terrorists and the attack has completely changed the way we live and work. Its impact is so immense that it covers almost every aspect of our life including the privacy protection policy in the banking industry. After the September 11 terrorist attack, the U.S. Congress passed a law, the USA PATRIOT Act that makes it easier for government law enforcement and intelligence agencies to gather and share information related to terror-related investigations and it has changed how the banking industry or financial institutions handle the privacy of their customers’ personal information. The purpose of this research paper is to explore the effects of the USA PATRIOT Act on banking industry’s handling customers’ private personal information. Some Background Information and History of Banking Privacy The USA PATRIOT Act is not an official title of the law. It is the acronym of the very long title of the Act: Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001. It was signed into law by President George W. Bush on October 26, 2001. But, before 2001, do we have any law that provides guidelines for the privacy of banking industry in the United States of America? Surely, there are several laws that are related to the financial institutions and the privacy protection policy...
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...make it appear as though it is coming from a legitimate source. (“Overview - Money Laundering. (2014)”). 1B. Government Agencies or Other Organizations Involved These criminal actives may include, drug trafficking, smuggling, corruption and human trafficking, which usually generate large sums of profits for those individuals carrying out the act. Many governmental agencies are cracking down to help prevent these acts that have been associated with money laundering. The agencies are as listed: (“Other Government Agencies Combating Money Laundering and Terrorist Financing. (n.d.)”) * Federal Bureau of Investigation * Internal Revenue Service Criminal Investigation * Office of National Drug Control Policy * U.S State Department * Financial Crimes Enforcement Network * Office of Foreign Asset Control * Government Accountability Office 1C. Statistics and Reports of Money Laundering and Criminal Penalties Many investigations have started each year to look into possible acts of money laundering. As like most illegal acts, not all of them are caught however for the ones that have been caught doing the illegal act, the United Nations Office on Drugs and Crime have conducted studies to determine the actual magnitude it has on the economy. As a result, in a 2009 report, it was stated that “criminal proceeds amounted to 3.6% pf global GDP, with 2.7% (or USD 1.6 trillion) being laundered”...
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...Terrorism Worksheet Complete Parts I and II of this worksheet. Part I Watch the Counterfeits: Funding Terrorism video located on the student website. Complete the table by including the following: • Left column: Identify 2 or 3 funding strategies used by terrorists or terrorist organizations to fund their activities. • Middle column: Identify the threat the funding strategy poses to homeland security and to legitimate businesses. • Right column: Identify strategies used in counterterrorism to combat the funding strategy. Funding Strategy Threat Counterterrorism Strategy Criminal activities Globalization the Money Laundering Control Act of 1986 Foreign supporters money laundering The Bank Secrecy Act of 1970 Revenues from legal companies Transnational organized crime The USA PATRIOT Act Part II Write a 350- to 700-word summary, in the space below, about the funding and counterterrorism strategies listed in the table. Include the following in your summary: • Identify the threats that funding strategies pose to legitimate businesses. This kind of funding strategies will cause a legal business to subject to sanctions and regulations in laws that can help businesses from being profitable. If the government they are part of a terrorist organization, they can freeze the business accounts and other assets. Like for example government following the events of 9/11 the government did not do much, to stop global money laundering. The partisan...
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...What are Monetary Instruments? According to 31 USCS § 5312 (3), the term monetary instruments means-- "(A) United States coins and currency; (B) as the Secretary may prescribe by regulation, coins and currency of a foreign country, travelers' checks, bearer negotiable instruments, bearer investment securities, bearer securities, stock on which title is passed on delivery, and similar material; and (C) as the Secretary of the Treasury shall provide by regulation for purposes of sections 5316 and 5331 [31 USCS §§ 5316 and 5331], checks, drafts, notes, money orders, and other similar instruments which are drawn on or by a foreign financial institution and are not in bearer form." Source : http://definitions.uslegal.com/m/monetary-instruments/ What is Laundering of Monetary Insruments? Money laundering refers to a financial transaction scheme that aims to conceal the identity, source, and destination of illicitly-obtained money. The money laundering process can be broken down into three stages. First, the illegal activity that garners the money places it in the launderer’s hands. Second, the launderer passes the money through a complex scheme of transactions to obscure who initially received the money from the criminal enterprise. Third, the scheme returns the money to the launderer in an obscure and indirect way. Tax evasion and false accounting practices constitute common types of money laundering. Often, criminals achieve these objectives through the use of shell companies...
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...Patriot Act and its Effect on Corporations SECR 5080 – Term Paper 9 May 2015 Table of Contents Abstract – page 3 Introduction – page 3 Current State of Affairs as by the law – page 5 Impact on computing – page 6 Surveillance on Businesses – page 9 Penalty on non-compliance – page 10 Internet Service Providers – page 10 Conclusion – page 12 References – page 13 Abstract The Patriot Act was written into law just a mere 45 days after the September 11, 2001 terrorist attacks on the United States. The Patriot Act was intended to counter terrorism by providing law enforcement agencies and intelligence agencies with an easier means to target those connected to terrorism. The Patriot Act has had a great impact on corporations, how they are surveilled and monitored, and huge penalties on noncompliance of the Patriot Act. This paper will further discuss the Patriot Act and its effects on Corporations. Introduction The terrorist attack on the United States on September 11, 2001 shook the foundation of the faith that America had in her security. This prompted congressional action on counteractive action to avoid a repeat occurrence of the terrorist attack on US soil. Measures that were taken included the passage of a Congressional Act referred to as the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT) Act of 2001, hereby referred to as the Patriot Act. The passing of the Patriot Act was intended...
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...Theory and Practice of Regulation of Anti-Money Laundering for Banks and NonBanks Hayford Kwesi Annor Manager, Risk & Compliance/AMLRO, ABii National Savings & Loans Ltd. Doctorate of finance student, SMC University, Switzerland. FAAFM, Ch.FE, ACCPA, MBA, BSc, HND h.k.annor@gmail.com Abstract A deregulated financial sector is free to accumulate and allocate funds from anywhere irrespective of the nature, form, intent and source. Without regulatory oversight, this poses zero risk to banks and nonbanks no matter how they finance the capital structure. In the real world, banking is an outcome of interactions between the regulator and the regulated. Regulatory consequences apply for failure to comply with the acceptable standards of best practices of banking regulation which include fines, sanctions, jail terms and revocation of the banking license for willful or non-willful noncompliance. The physical disposal of proceeds of funds’ from crime with aim of separating same, through creation of layers to disguise trails of the source and make it seem legitimate undermines the integrity of the financial system. It is required of the banking sector to build a comprehensive framework that identifies, assesses, monitors, mitigates and reports perceptions of suspicious activities of money launderers under the discipline of the regulator to avoid being sanction for the related offences. This paper reviews theory to link practice towards money laundering risk assessment...
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...Technology Acts Mayra Gonzalez BIS/220 October 28, 2013 Jadie Giorgis Information Technology Acts While information technology continual to move ahead over the years, ethical concerns turn into an issue. Accordingly, the government executed specific acts to govern these concerns. Even as some of these acts exists, this text centered on two sections specifically: US Patriot Act of 2001, and Fair Credit Reporting Act of 1970. Whereas the Patriot Act was executed to lessen terrorist activities by the use of the internet, the Fair Credit Act was executed to give every American with be on a par with credit opportunities. The Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism, also well-known as the Patriot Act of 2001 was enacted in 2001. The Patriot Act was established to “deter and punish terrorist acts in the United States and around the world, to enhance law enforcement investigatory tools, and other purposes” (US). Table 1.1 below provides a synopsis of the sections of the Patriot Act involving financial institutions and their operations. Table 1.1 Sections of the Patriot Act of 2001 Section Purpose | 311 “Special Measures for Jurisdictions, Financial Institutions, or International Transactions of Primary Money Laundering Concern | 312 Special Due Diligence for Correspondent Accounts and Private Banking Accounts | 313 Prohibition on U.S. Correspondent Accounts with Foreign Shell Banks | 314...
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...felony in the United States, for which the penalty is “…a fine of not more than $500,000 or twice the value of the property involved in the transaction, whichever is greater, or imprisonment for not more than twenty years, or both” (Laundering of Monetary Instruments). 2. Who is the victim(s)? In money laundering, there are a number of victims. The most direct victim is the financial institution through which the money passed, which is typically deceived by the money launderer as to the source of the money. The crime victimizes nations in a broader way by distorting national and global financial data. Inaccurate financial data can have many negative macroeconomic consequences, including inexplicable changes in money demand, risks to bank soundness, contamination effects on legal financial transactions, and increased unpredictability of international capital flows and exchange rates due to unanticipated cross-border asset transfers (fatf-gafi.org). 3. Is there a "typical" social background of the offender(s)? Are there any current trends . . . data issues? The typical money launderer is usually wealthy since the person or organization has a large, steady amount of excess money that needs to be “washed” of its illicit origin. However, the “social” characteristics, including the race, college education, vocation, and social position of the person or organization is more diverse. Typical money launderers are criminal organizations, such as the American Mafia or Chinese...
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...Legal and Regulatory Environment Walmart provide information on common scams to their customers such as fraud awareness sign and brochure. They also help their associates understand how to spot signs of fraud and protect the financial interests of their customers. They trained their associates on fraud and money laundering as part of their prevention strategy. In addition, Walmart uses an anti-money laundering software solution to monitor financial services activity for potential financial crimes. Walmart reports suspicious activity to the Financial Crimes Enforcement Network and law enforcement. d. Available Pmt. Instruments Walmarts’s available payment instruments is card-based systems including credit or debit cards with MasterCard or Visa logo, Walmart credit Card, Bill Me Later, PayPal, Walmart Gift Card, cash and American Express. 7. Management of Inventory Walmart has a highly efficient distribution system enables it to be the lowest cost provider of many goods. It makes the firm to maintain very low levels of inventory. Walmart continued improvement in inventory turnover over the years, therefore there is no sign that their competitors can catch up with Walmart’s lowest cost provider of many products. a. Elements of Basic Inventory Policy Walmart has its own satellite communication system since 1983. It allows them to monitor each activity going on in a particular store at any point of the day. Walmar allows the store to manage their own stocks...
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...Accounting Practice Legislations, Procedures and policy Report Introduction This report contains detail compliance analysis of the Accounting Practice, which undertakes Accounting and Bookkeeping services for Travel agent. The Agent provides Community services as well, along with day to day Travels and Tour services such as overseas workers sponsorship, Manage Payroll for overseas workers and provides Money transfer. This report outlines the regulations and the practice procedures and Manuals and also outlines the compliance with AUSTRAC regulations. Procedures Community services policies and procedures This Accounting firm has in place policies and procedures that govern and regulate privacy and confidentiality of client information. This concept not only applies to what you can disclose about your clients or your organisations outside of work, but also what can be shared in network meetings. What information can be shared with other organisations, who shares it and how this information is given out should be clearly defined in any effective, professional service. It is often incorporated into a worker’s duty statement or job description. This practice has developed and written policy and procedures, and staff training in the following areas: * a confidentiality policy * a clearly defined process for identifying and regularly updating a Community Resource Index so that all workers are aware of what other services are available to refer to * processes...
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...to our Circular NHB(ND)/DRS/POL. No. 13/2006 dated April 10, 2006 and circulars issued subsequent thereto from time to time on the above subject advising Housing Finance Companies (HFCs) to ensure that a proper policy framework on ‘Know Your Customer‘ and ‘Anti money Laundering Measures’ is put in place with the approval of their Board. In this connection we wish to inform that the said Guidelines have since been reviewed in the light of subsequent developments including amendments in the Prevention of Money Laundering Act and Rules framed there under.The revised Guidelines on ‘Know Your Customer‘ and ‘Anti money Laundering Measures’ that are to be followed are enclosed. HFCs are advised to amend their existing policy framework keeping the above Guidelines in view with the approval of their Board within one month from the date of issue of this circular and ensure their strict compliance. A copy of the modified policy should be sent to the National Housing Bank. Please acknowledge receipt. Yours faithfully, (R.S.Garg) General Manager Department of Regulation and Supervision Annexure : Guidelines on ‘Know Your Customer’ and ‘Anti Money Lending Measures’. GUIDELINES ON ‘KNOW YOUR CUSTOMER’ AND ANTI-MONEY LAUNDERING MEASURES 'Know Your Customer' Guidelines The objective of ‘Know Your Customer (KYC) Guidelines’ is to prevent housing finance companies (HFCs) from being used, intentionally or unintentionally, by criminal elements for money laundering activities. KYC procedures also...
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...Executive summary | | | This paper presents a description of the hawala (also referred to as hundi) alternative remittance system. Hawala is an ancient system originating in South Asia; today it is used around the world to conduct legitimate remittances. Like any other remittance system, hawala can, and does, play a role in money laundering. In addition to serving as a 'tutorial' on hawala transaction, this paper will also discuss the way in which hawala is used to facilitate money laundering. What is hawala? | | | Hawala (1) is an alternative or parallel remittance system. It exists and operates outside of, or parallel to 'traditional' banking or financial channels. It was developed in India, before the introduction of western banking practices, and is currently a major remittance system used around the world. It is but one of several such systems; another well known example is the 'chop', 'chit' or 'flying money' system indigenous to China, and also, used around the world. These systems are often referred to as 'underground banking'; this term is not always correct, as they often operate in the open with complete legitimacy, and these services are often heavily and effectively advertised. The components of hawala that distinguish it from other remittance systems are trust and the extensive use of connections such as family relationships or regional affiliations. Unlike traditional banking or even the 'chop' system, hawala makes minimal (often no) use of any sort...
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...What were the advances in information technology that resulted in new ethical issues necessitating the creation of each act? Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act (US Patriot Act), 2001, renewed 2006 The “Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism” Act, more commonly referred to as the “Patriot Act”, was signed into law on October 26th, 2001 following the events of September 11th of that same year. At that time, existing laws regarding electronic information needed to be updated to provide federal law enforcement with greater access to investigate electronic platforms such as email, voicemail, other electronic information and personal property without the owner’s knowledge or consent. The act was implemented to capture the terrorists responsible for the attacks during 2001 but as it pertains to information technology; it removed many barriers for law enforcement agencies to gather intelligence from domestic sources to fight terrorism. Money laundering for example is hidden in a process of several electronic transactions which ultimately funds terrorist activities. The criminals take cash earned from illegal exploits and then deposit this cash into a banking institution from where it is then transferred to other accounts or credit cards, money orders, travelers cheques among other things so that it appears to be legitimate funds used...
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...own work and where quotations and/or ideas have been utilized from other sources these have been acknowledges and referenced accordingly.” Assignment I Question 1 Alliance Bank (Bahamas Ltd) is an established offshore bank with an international presence, through a network of subsidiaries, branches and representative offices in over 15 locations. The referenced branch is located in jurisdiction of The Bahamas. A full range of banking and related financial products and services are offered to clients including but not limited to, bank accounts, wire transfers, cash deposits, and credit cards. Money laundering can be defined as the process of disguising or concealing illicit funds to make them appear legitimate. This is achieved by the launders disguising their identity and or distancing themselves from the illicit activity that would have produced his property. It is imperative then that MLROs fully appreciate the vulnerabilities of their Bank’s particular products and services in order to be able to implement systems to prevent exploitation, and be able to properly evaluate unusual and potentially suspicious activity. The core characteristics and vulnerability of the products and services previously mentioned, from the perspective of anti-money laundering are as follows: Bank Accounts: Bank accounts are the entry point into the financial system. Once this is achieved the launderer has access to a wider network of vehicles with which to carry out his objectives. These...
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