CAMS · Question #923
How do nominees benefit criminals misusing thorn for money laundering purposes? (Select Two.)
The correct answer is B. Obscure beneficial ownership D. Derail investigations. Nominees - individuals or entities holding assets or positions on behalf of another party - are exploited in money laundering schemes primarily because they conceal who truly owns or controls assets and introduce complexity that impedes investigations.
Question
How do nominees benefit criminals misusing thorn for money laundering purposes? (Select Two.)
Options
- AAllow beneficial owners to provide proxies lot voting on corporate decisions
- BObscure beneficial ownership
- CAllow domicile in the nominee's jurisdiction
- DDerail investigations
How the community answered
(33 responses)- A12% (4)
- B85% (28)
- C3% (1)
Why each option
Nominees - individuals or entities holding assets or positions on behalf of another party - are exploited in money laundering schemes primarily because they conceal who truly owns or controls assets and introduce complexity that impedes investigations.
Providing voting proxies for corporate decisions is a legitimate governance mechanism and does not by itself benefit money launderers; the criminal advantage of nominees lies in identity concealment, not in corporate voting rights.
Nominees obscure beneficial ownership by placing their own name on legal documents, bank accounts, or corporate structures instead of the true controlling party, making it extremely difficult for authorities or institutions to identify who ultimately owns or benefits from the assets.
Establishing domicile in a nominee's jurisdiction is not a primary exploitation method in money laundering; the core benefit of nominees is concealing the true beneficial owner's identity, not achieving a particular jurisdictional presence.
By inserting an additional layer of identity between the criminal and the illicit assets, nominees create investigative dead ends and delays, forcing law enforcement to unravel multiple layers of obfuscation that can effectively derail or significantly slow money laundering investigations.
Concept tested: Use of nominees to conceal beneficial ownership in money laundering
Source: https://www.fatf-gafi.org/content/dam/fatf-gafi/guidance/Guidance-Transparency-Beneficial-Ownership.pdf
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