Transfers of money over the last 6 months to a corporation in a jurisdiction with strict secrecy laws triggered an alert. Which of the following should cause the most suspicion of money laundering?

Question

Options

• AThe jurisdiction is a known tax haven.
• BThe company has bearer shares.
• CThe corporation director is a European citizen.
• DNo financial statements have been filed for 3 years.

• A
  4% (1)
• B
  78% (18)
• C
  4% (1)
• D
  13% (3)

Explanation

According to the CAMS study guide, chapter 4, page 851, bearer shares are shares that do not have the name of the owner registered on them, and the ownership is transferred by the physical delivery of the share certificate. This means that the true beneficial owner of the company can be hidden or changed without any record or notification. Bearer shares are considered a high-risk factor for money laundering and terrorist financing, as they can facilitate the movement and concealment of illicit funds through anonymous corporate vehicles. Therefore, the company having bearer shares should cause the most suspicion of money laundering among the options

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