a) In its report, Transparency and Beneficial Ownership (FATF, October 2014), the FATF
made it clear that corporate vehicles play an essential role in the global economy,
conducting a wide range of legitimate, commercial and entrepreneurial activities.
Nonetheless, they have also been misused by criminals to disguise and convert the
proceeds of their crimes.
In its Report to the G20 on Beneficial Ownership (FATF, October 2016), the FATF
highlighted how it is helping to improve transparency and prevent the misuse of
companies, trusts and other corporate vehicles.
Evaluate the extent of the issue, the particular difficulties associated with tracking
ultimate beneficial ownership, and the measures that are being taken to assist with the
problem.
25 marks

b) You are a member of the AML compliance team that focuses on anti money laundering
at a regional office of an international bank. You receive an internal suspicious activity
report from a customer relationship manager (CRM) via the bank’s reporting process.
The internal report details the following customer activity.
Sergio Valdez has been a customer of the bank for the last three years. He operates
a small agency in London that assists firms that wish to develop business in Latin
America. The turnover of the firm over the last three years has been consistent at circa
US$300,000 per annum, consisting of invoices that are on average between
US$3,000–5,000. The invoices have all been to UK-based entities.
In the last six months the scale and profile of the business has changed. Several
inward and outward transactions from Colombia, Argentina and Brazil have totalled
US$6.5 million and on invoices the standard statements as to nature of services all
state ‘business facilitation fees’.
The CRM tried to arrange a meeting with Sergio Valdez but his office stated regularly
that he was out of the country. The CRM eventually managed to arrange a call with
him and asked about the change in type and scale of the business. Sergio Valdez
explained that the business had expanded and he now had more clients, but he was
vague as to details of who his clients were, the nature of the business and how it had
grown so quickly. He appeared reluctant to stay on the call, saying he was busy and
would come to the bank to answer any further questions that were needed.
International UK Diploma in AML– Assignment 3 – 10 August 2020
3 ICAA484
Despite repeated attempts to arrange a meeting, no meeting was held because of the
customer’s non-availability. After several weeks of trying, the CRM became concerned
and submitted an internal suspicion report.
i) Evaluate any risk issues arising as a consequence of the case.
ii) Assess what actions you should take on receiving the internal suspicion report.
iii) Under what circumstances is there an obligation on you to report both
internally and externally any suspicion of money laundering?
30 marks

c) From a customer due diligence (CDD) perspective, in a jurisdiction of your choice,
analyse the status of a politically exposed person (PEP) including:
i. identifying who should be classified as a PEP or as a ‘close associate’ or
‘immediate family member’
ii. describing how PEPs are classified from a CDD perspective.
20 marks

d) You are a member of the AML/Compliance team of a financial services firm based in
a jurisdiction of your choice. You have been requested to review a new business
application for a high-net-worth individual who wishes to open an account with the firm
to facilitate extensive inward and outward payments from and to a number of global
centres.
The only information on the client file specifies:
• the nature of the client’s business – import and export, primarily in the
agricultural industry
• the rationale for inward and outward payments – settlement of trading accounts
• the jurisdictions of operation – various, primarily North America
• the source of funds – family wealth
You are uncomfortable about the lack of detailed information and decide to conduct
more extensive due diligence.
Explain what measures you would take, what information you would require and how
you would go about obtaining the required information.
25 marks
Total 100 marks

Anti Money Laundering