Real Estate Council of Alberta Fundamentals Practice Exam

What is the primary purpose of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act?

1. To provide financial assistance to those affected by crime

2. To enforce criminal penalties for money laundering

3. To implement measures for detecting and deterring money laundering

4. To support property rights of individuals

The correct answer is: To implement measures for detecting and deterring money laundering

The primary purpose of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act is to implement measures for detecting and deterring money laundering. This legislation is designed to establish a framework that financial institutions and other entities must follow to recognize, report, and prevent money laundering activities. The act aims to combat the infiltration of criminal proceeds into the economy and enhance the overall integrity and transparency of financial systems. By focusing on detection and deterrence, the act seeks to make it more challenging for criminals to use the financial system to launder money derived from illegal activities, such as drug trafficking or fraud. It includes requirements for reporting suspicious transactions and the importance of client identification processes to ensure that businesses are vigilant against potential money laundering risks. The options that relate to financial assistance, enforcing penalties, or supporting property rights, while important in their own contexts, do not capture the central objective of this act, which is focused on the preventative and detection strategies necessary to address money laundering and terrorist financing threats.