Financial crime context checkpoint
Check that you can place sanctions screening inside the wider financial-crime picture: what money laundering and terrorist financing actually describe, what the FATF Recommendations are and are not, and why the information a payment carries about its parties is itself a control rather than administrative detail.
QUESTIONS AS TEXT
Q1. What distinguishes terrorist financing from money laundering in the way a control has to look for it?
Answer: A: The funds may be entirely legitimate in origin, so tracing back to a criminal source finds nothing — the concern is the destination and purpose.
Laundering asks where money came from; terrorist financing asks where it is going. That reversal matters operationally, because a control tuned to spot dirty origins — unexplained wealth, layering, structuring — can pass a payment that is small, clean and headed somewhere it should not go.
Q2. What are the FATF Recommendations, in terms of how they reach a bank?
Answer: A: International standards that countries implement through their own law, so a bank complies with its national rules rather than with FATF directly.
The layering matters when you are reading a requirement. "FATF requires…" is shorthand: the enforceable version is whatever your jurisdiction enacted, and two countries implementing the same Recommendation can land on materially different thresholds and exemptions.
Q3. An intermediary bank receives a payment where the originator is shown only as "Customer". Why is that a control problem and not just untidy data?
Answer: A: Every downstream party screens what it can see, so a missing party name removes the very data the next bank's controls depend on.
Payment transparency requirements exist because screening is distributed: each institution in the chain runs its own checks on the information it receives. Stripping or genericising party data does not just inconvenience the next bank — it silently switches off their control, which is why the practice is treated so seriously.