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RES exam question on AML / CFT: Salesperson Omar has an uneasy feeling about a buyer whose money comes from an overseas…

HardAnti-Money Laundering (PMLPFTF) · Paper 2

Salesperson Omar has an uneasy feeling about a buyer whose money comes from an overseas charity account with thin paperwork. He cannot say the funds are criminal proceeds, and a colleague tells him a report is needed only where the money is dirty. Which of the following statements is/are correct? (i) Reasonable grounds to suspect are enough to require a report; certainty that the funds are criminal is not needed. (ii) Since he has no proof, a note on file satisfies his duty until the suspicion becomes firmer. (iii) Terrorism financing can involve money that is clean in origin, so a clean source does not end the duty. (iv) Asking the buyer about the charity's funding is due diligence, and does not replace a report if suspicion remains.

  1. A(i) and (iii) only
  2. B(i), (iii) and (iv) only
  3. C(ii), (iii) and (iv) only
  4. D(i), (ii) and (iv) only
Show answer & explanation

Answer

B. (i), (iii) and (iv) only

Explanation

Answer: (i), (iii) and (iv) only. Reasonable grounds to suspect trigger a report, and terrorism financing can use clean money.(i) True. Suspicion on reasonable grounds, not proof, is the test.(iii) True. Terrorism financing can use money that is entirely clean in origin.(iv) True. Questions are due diligence and do not replace a report. Asking them must not reveal that a report is in view.Rule: A report is due where a person knows or has reasonable grounds to suspect that property is connected to criminal conduct, whether or not the transaction completes, and failing to report is an offence. Evasiveness about source of funds should be documented and may warrant a report.Source: Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act 1992; CEA, Guide on the PMLPFTF Regulations 2021 (version of 30 June 2025), paras 8.2.1 and 6.2.3; Terrorism (Suppression of Financing) Act 2002; /learn/aml-cdd-property-agent

Why the other options are wrong

  • (ii) False. He has no proof, but a note on file is not a report, and the duty arises on reasonable grounds, not on proof.

Study the concept behind this question: AML/CFT for Property Agents: CDD, Source of Funds & STR

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