CISI Combating Financial Crime (Bahrain)

Covers core definitions, international standards (FATF), and the regulatory landscape in the UK and globally.

• • Definitions: ML, TF, PF, Fraud, Market Abuse, Bribery, Corruption, Sanctions.
• • FATF's 40 international Recommendations and the roles of regulators and enforcement bodies.
• • UK FSMA 2000 definition of financial crime.
• • GDPR Breach Fines: 4% of global turnover or €20m.
• • Compliance culture, regulator relations, asset recovery and best-practice guidance.

Detailed look at the PLI and EDD models, the POCA 2002 legislation, and MLR 2017-2023 updates.

• • PLI Model: Placement (Entry), Layering (Movement), Integration (Reunion).
• • EDD Model: Enable, Distance and Disguise.
• • POCA S327-329: Concealment, Arrangements, Acquisition (Max 14 years prison).
• • POCA S330-333: Failure to Disclose / Tipping Off (Max 5 years prison).
• • MLR 2017 and the 2019, 2022 and 2023 changes.
• • FATF mutual evaluations, regional bodies and other international AML bodies.

Focuses on the solicitation and collection of funds for terrorism, distinguishing it from general ML.

• • TF vs ML: TF focuses on the destination (use), ML on the source (origin).
• • UN Convention 1999 (Criminalises provision/collection).
• • UNSCR 1267: Sanctions against Al-Qaida, Taliban, ISIL.
• • E-money CDD figures: €150 stored value, €50 remote use and €150 monthly reload.
• • Fund Transfer Regs: Require name, address/DOB, account number/unique ID.

Deep dive into the UK Bribery Act 2010, US FCPA, and different types of corrupt practice.

• • UK Bribery Act S1 (Bribing), S2 (Being Bribed), S6 (FPO), S7 (Failure to Prevent).
• • Section 7 is 'Strict Liability'.
• • 6 Principles of Prevention (MOJ): Proportionate, Top-level, Risk, Due Diligence, Communication, Monitoring.
• • FCPA: Covers only ACTIVE bribery (giving), allows 'Facilitation Payments' whereas UK Act DOES NOT.

Analysis of the Fraud Act 2006, Market Abuse Regulation (MAR), and international standards like SOX.

• • Fraud Act S2 (False representation), S3 (Failure to disclose), S4 (Abuse of position).
• • Dishonesty + Intent to gain/cause loss = Fraud (No actual loss needed).
• • MAR: Insider dealing, Unlawful disclosure, Market manipulation, Spoofing.
• • CJA 1993 insider dealing and Financial Services Act 2012 sections 89–91.
• • Volcker Rule: Limits banks to 3% Tier 1 capital in private equity/hedge funds.
• • Sarbanes-Oxley controls for reporting, governance and auditor independence.

Distinction between evasion and avoidance, FATCA (US), and the Criminal Finances Act 2017.

• • Tax Evasion (Illegal) vs Avoidance (Legal but aggressive).
• • FATCA: US Law requiring global reporting of US persons' assets.
• • Criminal Finances Act 2017: Corporate strict liability for failing to prevent facilitation of tax evasion.
• • Common Reporting Standard (CRS): OECD standard for automatic exchange of info.
• • CDOT arrangements, the EU non-cooperative list and the OECD Crypto-Asset Reporting Framework.

Listing processes, screening technologies, and the consequences of designation.

• • Two core prohibitions of an Asset Freeze: Dealing with funds AND making funds available.
• • Fuzzy Logic: Used in screening to catch misspellings/anagrams.
• • OFSI (UK), OFAC (US), EU, UN lists.
• • Breach Penalties: Up to £1m or 50% of funds; max 7 years prison.
• • Policing and Crime Act 2017 powers allow UK implementation of UN sanctions without waiting for EU action.

The highest-weighted exam section (13 marks). Practical application of CDD, 3 Lines of Defence, and governance.

• • 3 Lines of Defence: 1. Front Office, 2. Compliance/Risk, 3. Internal Audit.
• • CDD: identify and verify the customer and beneficial owner and understand the relationship.
• • Company beneficial ownership: more than 25% or control by other means.
• • Recommendation 10 occasional-transaction CDD threshold: €15,000.
• • EDD (Enhanced Due Diligence): Required for PEPs, High-Risk countries, Correspondent banking.
• • Correspondent banking due diligence and the prohibition on shell-bank relationships.
• • PEPs: Remains a PEP for at least 12 months after leaving office.
• • SARs and DAML, the seven-working-day initial consent notice, and no general UK cash-reporting threshold.
• • CDD records: five years after the relationship; transaction records: five years from completion.