A corporate services provider in a European Union (EU) country has a prospect from an African country who deals in oil and gas. The prospect intends to develop an oil terminal in his home country…

Question

Options

• AA loan worth $75 million with a third-party guarantor
• BThe guarantor company's ownership structure is overly complex
• CThe prospect wishes to have a corporate structure with a holding company in EU country
• DThe ultimate beneficial owner is young lady who has gained her wealth through a small business

• A
  4% (1)
• B
  85% (23)
• C
  11% (3)

Explanation

According to the ACAMS study guide1, some of the common red flags for money laundering or financing terrorism are: Customers who provide insufficient or suspicious information, such as unusual or unverifiable identification documents, different taxpayer identification numbers, or vague or inconsistent information about their business or source of funds. Transactions that have unusual features, such as large cash payments, unexplained payments from a third party, use of multiple or foreign accounts, complex or illogical transactions, or transactions that are inconsistent with the customer's profile or expected behavior. Geographic concerns, such as transactions involving high-risk jurisdictions, offshore financial centers, secrecy havens, or countries subject to sanctions or embargoes. Ultimate beneficial ownership that is unclear, such as customers who use shell companies, trusts, or other legal entities to obscure their identity or the identity of the true owners or controllers of the funds or assets.

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