You are the Money Laundering Officer at a major United Kingdom financial institution. One of the bank's customers, 'Alpha Phones Ltd', is the parent of and majority shareholder in a group of companies involved in the telecoms manufacturing sector. The parent company is based in London with subsidiaries throughout Africa, from where it sources most of its raw materials. The parent buys raw materials (precious metals) from its subsidiary in the Democratic Republic of the Congo. The Chief Executive of the Congolese company is a former president of the country, and a retired judge is also a board member. The parent company buys the raw materials from this subsidiary, which invoices the parent at a mark-up from which it makes its profit. A loan was made by the parent to this subsidiary several years ago, but the terms have not been disclosed to you. The UK parent sells the raw materials to another subsidiary based in Germany which manufactures mobile phones. The parent owns the majority of shares in the Congolese and German subsidiaries and provides administrative and marketing services to its subsidiaries which are invoiced on an annual basis. You have been asked by your employer's Chief Finance Officer to provide a report raising any concerns regarding potential money laundering which will need to be considered prior to making a loan to the parent company. In your report you should address, but without being limited to, the following issues:

2)The techniques (accounting and otherwise) which could be used to channel dirty money across the corporate group.

Answer rating: 100% (QA)

In assessing potential money laundering risks within the corporate group several techniques both accounting and nonaccounting could be employed to channel illicit funds Here are some key issues and te... View the full answer