In 2012, the British bank Standard Chartered was accused by New York's Department of Financial Services (DFS), of helping the Iranian government to circumvent US money laundering regulations to the tune of an estimated 191.8 billion over 10 years.

The bank paid a civil penalty of 262 million in 2012 by the DFS and the US Department of Justice for failures in its anti-money laundering controls and for violating US sanctions on Iran, Burma, Libya and Sudan.

The bank then had to pay a further 232 million in civil penalties in 2014 by the DFS for the banks internal controls failing to flag suspicious transactions. This arose from the regulator deeming that the bank had not improved its systems after promises in the 2012 settlement. It was also forced to discontinue certain activities such as exiting certain high-risk customers at its United Arab Emirates branch.

REQUIRED:

1. Classify the THREE (3) stages of money laundering and discuss the practices adopted by launderers throughout each stage.

(15 marks)

2. With regards to financial institutions obligations under the 40+9 recommendations on Money Laundering and Terrorist Financing (ML/TF) by the Financial Action Task Force (FATF), identify the preventive measures that should be adopted to prevent money ML/TF through these institutions.