Certified Anti Money Laundering Specialist Cams

Instructions:

• Answer 50 questions in 15 minutes.
• If you are not ready to take this test, you can study here.
• Match each statement with the correct term.
• Don't refresh. All questions and answers are randomly picked and ordered every time you load a test.

This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.

1. Portfolio Manager
A professional responsible for the securities portfolio of an individual or institutional investor. In return for a fee - the manager has the responsibility of choosing and managing assets.
Expanding/Systemising the exchange of financial intelligence - improving expertise/capabilities of their personnel - fostering better communication by applying new technologies and sharing financial crimes investigations information.
As a financial institution service that is very vulnerable to money laundering.
A fund setup by an investment trust that issues a fixed number of shares to its investors. As such - the market price of the shares fluctuates - often selling at a premium or discount to the fund's net asset value (NAV).


2. What were recently identified as Emerging Money Laundering risks?
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
Open and Closed system
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
Funds transfers - Shell Corporations - Contractual Transactions.


3. What is the Serious Organised Crime Agency (SOCA)?
A record that financial institutions must retain for each cash sale of bank checks - drafts - money orders - cashier's checks and traveller's checks between $3 -000 and $10 -000.
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
The FIU of the UK
May involve movement or large sums of money going cross-border and often through multiple casinos - all by a third party (the operator). Sometime operator does not identify funds owners.


4. Downstream Correspondent Clearer
A Correspondent Banking Client who receives Corresponding Banking services from an institution and itself provides Correspondent Banking services to other financial institutions in the same currency as the account it maintains with the institution.
Account established by a domestic banking institution to receive deposits from - make payments on behalf of - or handle other financial transactions for a foreign financial institution - usually in the foreign financial institutions's cureency.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
Competent authorities should have powers of subpoena - search and seizure.


5. Three stages of money laundering
Harmful or Preferrential Tax Regimes.
Product is purchsed with terms that it is going to foreign country A. While in transit - the product is diverted back to originating country or to another foreign market where the greatly discounted price provides for extreme profits.
Placement - Layering - Integration.
A security that offers the owner the right to subscribe for ordinary shares of a company at a fixed date - usually at a fixed price. Equivalent to stock options.


6. What is a 'NCCT'?
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
Banking services between merchant banks and other financial institutions.
Type of foreign bank that is incorporated in the host country but is considered to be owned by a foreign parent bank. It only needs to operarted under the host country's regulations.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.


7. FATF Recommendation 7

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8. FATF Recommendation 23
Terrorism and Terrorist Financing
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
Financial institutions should have adequate supervision and regulation. Ensure no criminal element in position on control. Money transfer/exchangers should be registered and subjected to monitoring.
Expanding/Systemising the exchange of financial intelligence - improving expertise/capabilities of their personnel - fostering better communication by applying new technologies and sharing financial crimes investigations information.


9. Derivatives
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.


10. What is the goal of the Egmont group?

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11. Convertible Bond
Provide mutual legal assistance.
disrupt or adversely afftect the business of the bank.
Corporate bond that includes an option for the holder to convert it into other securities after a specified period at the discretion of the bondholder.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.


12. Corporate Bank

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13. How do 'Hedge Funds' operate?

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14. FATF Recommendation 33
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
A record that financial institutions must retain for each cash sale of bank checks - drafts - money orders - cashier's checks and traveller's checks between $3 -000 and $10 -000.


15. FATF Sepcial Recommendation on Terrorist Financing -- SR Eight
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
FATF principles should apply to all branches and subsidiaries of a financial institution - even those abroad. Inability to do should re reported to parent institution's regulatory/supervisory authority.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
A contractual arrangement whereby the trustee manages the property for the benefit of the beneficiary in accordance with the contractual terms set by the grantor.


16. FATF Recommendation 14
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
Procedures used to determine the beneficial owners of a correspondent bank and the type of activity that wil be 'normal and expected' for the bank.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
Report suspicious transactions linked to terrorism.


17. When is a jurisdiction considered to be 'ring-fenced'?
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
The sale of a stock that the investor does not own. To do so - a securities intermediary 'loans' the stock to the investor - which comes from the intermediary's own inventory - another client's margin account or another intermediary.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.


18. What the primary objectives of Offshore Group of Banking Supervisors?
May involve movement or large sums of money going cross-border and often through multiple casinos - all by a third party (the operator). Sometime operator does not identify funds owners.
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].
It was the first law in any country to make money laundering a crime.
To promote the effective supervision of banks in their jurisdictions; to further international cooperation in the supervision between the Offshore Banking Supervisors - and with Basel committee member nations and other banking supervisors.


19. Structuring is a common technique in jurisdictions that...
As a key tool in detecting suspicious or money laundering activity - it is important because correspondent accounts are often used as conduits to launder criminal proceeds in international settings.
Quite simply - a plan. While in the US - this term is often associated with a nefarious plan - it should NOT be assumed to be evil - especially as it may appear on the ACAMS exam.
have in place compulsory currency reporting requirements.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.


20. How does the Egmont group help its members?
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.
A US Federal Court
Expanding/Systemising the exchange of financial intelligence - improving expertise/capabilities of their personnel - fostering better communication by applying new technologies and sharing financial crimes investigations information.
Financial institutions may rely upon intermediaries to perform certain CDD elements provided the intermediary is supervised and regulated. However - ultimate responsibility remains with the financial institution.


21. FATF
Funds transfers - Shell Corporations - Contractual Transactions.
Financial Action Task Force
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
Intergovernmental Action Group against Money Laundering in Africa


22. What is a Financial Intelligence Unit?
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
To reduce financial crime - including money laundering and terrorit financing.
Securities with very low marker price - volume and/or liquidity that are traded on a securities exchange or on the OTC markets. They tend to be more volatile than those on the major exchanges.
An introducing broker-dealer with an exclusive written agreement with a Futures Commission Merchant (FCM) that obligates the FCM to assume responsibility for the introducing broker's performance.


23. Investigative Log
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
The FIU of Russia
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.


24. FATF Sepcial Recommendation on Terrorist Financing -- SR Nine
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
Impose AML requirements on alternative remittance systems.
A security that offers the owner the right to subscribe for ordinary shares of a company at a fixed date - usually at a fixed price. Equivalent to stock options.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.


25. Retail Banking
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
Typical mass-market banking where individual customers use local branches of larger commercial banks.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.


26. FATF Recommendation 20
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
A Correspondent Banking Client who receives Corresponding Banking services from an institution and itself provides Correspondent Banking services to other financial institutions in the same currency as the account it maintains with the institution.
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.


27. Money Mules
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
A person who tranfers stolen money (or merchandise) from one country to another - often as a result of online scams. Transfers - can be done electronically - via mail or courier service or in person.
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
2% - 5% ($590B - $1.5T)


28. Cash Equivalent

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29. FATF Recommendation 4
a Sr Management level
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
Placement - Layering - Integration.
The nature of the request - the relevant criminal charges in the requesting country - the legal provision under which the request is made - and the information that is sought.


30. Respondent Bank

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31. Pink Sheets
Provide mutual legal assistance.
An electronic quotation system that displays quotes of many securities traded over the counter.
A bank whose license has conditions that prohibhit the licensed entity from conducting banking activities with the citizens - or with the local currency - of the country that issued that license.
As a financial institution service that is very vulnerable to money laundering.


32. Who appoints a 'Federal Receiver' (US)?
Pouch activity.
A US Federal Court
They pool investors' money and invest those funds in financial instruments in an effort to turn a profit. They typically issue securities in 'private offerings' that are usually not required to be registered with sa securities or financial regulator.
The possibility that lawsuits adverse judgements or contracts that turn out to be unenforceable can disrupt or adversely affect the operatinos or condition of a financial siutation.


33. Examples of VSP's
They pool investors' money and invest those funds in financial instruments in an effort to turn a profit. They typically issue securities in 'private offerings' that are usually not required to be registered with sa securities or financial regulator.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
A US Federal Court
that appear to be linked


34. Transparency International
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
Absolutely NOT. If the decision is based purely on profile - then you are discriminating. you need to file such reports on the ACTIVITY especially if it differs from the 'normal and expected' as reflected in the customer profile.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.


35. What is private investment company also known as?
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
While it is normally known as a Personal Investment Company (PIC) - in some jurisdictions - the international business company or exempt company is also the same.
The right - but not the obligation - to buy or sell a set amount of something - such as a share or commodity - at a set price after a set expiration date.


36. FATF Recommendation 29
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
If provided for money laundering to be an internationally extraditable offense.
The possibility that lawsuits adverse judgements or contracts that turn out to be unenforceable can disrupt or adversely affect the operatinos or condition of a financial siutation.
Financial institutions should have adequate supervision and regulation. Ensure no criminal element in position on control. Money transfer/exchangers should be registered and subjected to monitoring.


37. Who are the parties involved in a trust?
A security that offers the owner the right to subscribe for ordinary shares of a company at a fixed date - usually at a fixed price. Equivalent to stock options.
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.


38. The USA Patriot Act enacted a number of statutory provisions that bear directly on the procedures US financial institutions must follow in connection with their...
foreign correspondent banks
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
Foreign Corrupt Practices Act


39. Basel's 'CDD for Banks' states that the decision to open an account for a PEP should be taken at...
An introducing broker-dealer with an exclusive written agreement with a Futures Commission Merchant (FCM) that obligates the FCM to assume responsibility for the introducing broker's performance.
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
Passed in 1977 - the US law is primarily known for its anti-bribery provisions (it also applies to foreign companies with stocks covered by the Securities and Exchange Act of 1934).
a Sr Management level


40. Example of use of an Apostille
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
It one wants to open a bank account overseas - but do it through the mail - the bank may need to be assured that the copy of the passport is correct. The Apostille mark can assure this.
Represents a profession and is made up of member professionals; has a role in regulating the persons who are qualified to enter and who practise the profession; performs cetain supervisory or monitoring type function.
The right - but not the obligation - to buy or sell a set amount of something - such as a share or commodity - at a set price after a set expiration date.


41. A 'Cash Letter' can also be referred to as _____.
Pouch activity.
Futures contracts - forwards - swaps or options.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
No.


42. What is a 'Trust'?
Competent authorities should have powers of subpoena - search and seizure.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
A contractual arrangement whereby the trustee manages the property for the benefit of the beneficiary in accordance with the contractual terms set by the grantor.
As 'felonies' or 'all offenses in the criminal code'.


43. Apostille

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44. What was the effect of the 1988 Vienna Convention as it relates to extradtition?
Confiscation
If provided for money laundering to be an internationally extraditable offense.
They can accrue value as the price of the underlying stock rises.
Account established by a domestic banking institution to receive deposits from - make payments on behalf of - or handle other financial transactions for a foreign financial institution - usually in the foreign financial institutions's cureency.


45. FATF Recommendation 34
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.


46. How is 'Legal Risk' defined by the 2001 Basel Due Diligence Principles?
It conducts investigations in support of a government's confiscation or seizure efforts.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
The possibility that lawsuits adverse judgements or contracts that turn out to be unenforceable can disrupt or adversely affect the operatinos or condition of a financial siutation.


47. Futures Commission Merchant (FCM)
Take expeditious action to requests by foreign countries to identify - freeze - seize and confiscate property that is proceeds of money laundering or a predicate crime.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.


48. Who issues the Internationa Narcotics Control Strategy Report (INCSR) and how often?
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
The US State Dept issues the report annually.


49. OTC markets Over-The-Counter
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
A market is which securities are bought and sold outside of establisehd securities markets.
Review customer files and conduct random sampling of accounts.


50. UK courts view on 'Suspicion'
A security that offers the owner the right to subscribe for ordinary shares of a company at a fixed date - usually at a fixed price. Equivalent to stock options.
A degree of satisfaction not necessarily amounting to belief but extending beyond specualtionas to whether an event has occured or not. Though suspicion requires a lesser factual basis than a belief - it must be built upon some foundation.
Absolutely NOT. If the decision is based purely on profile - then you are discriminating. you need to file such reports on the ACTIVITY especially if it differs from the 'normal and expected' as reflected in the customer profile.
EurAsian Group