Which two aspects of precious metals pose the highest risk of money laundering? (Choose two.)

Question

Options

• ASome precious metals can be formed into other objects, making easier to transport
• BPrecious metals have high intrinsic value in a relatively compact form and are easy to convert into
• CThe value of precious metals can be inflated easily, making it easy to increase the amount of
• DPrecious metals can be readily used in many high-tech commercial applications, making them all

• A
  79% (26)
• C
  15% (5)
• D
  6% (2)

Explanation

Precious metals, such as gold and silver, pose a high risk of money laundering because they have some features that make them attractive to criminals. According to the FATF Guidance on the Risk- Based Approach for Dealers in Precious Metals and Stones1, these features include: Some precious metals can be formed into other objects, making easier to transport. For example, gold can be melted and shaped into jewellery, coins, bars, or other items that can be easily concealed and moved across borders. This makes it difficult for law enforcement and customs authorities to detect and seize the illicit proceeds of crime. Precious metals have high intrinsic value in a relatively compact form and are easy to convert into currency. For example, gold has a stable and universal value that can be exchanged for cash or other assets in any market. This makes it easy for criminals to store, transfer, and launder their illicit funds without leaving a trace in the formal financial system.

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