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. 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.
A co-operative property seller agrees to sell home at a well-below market reported price - then accepts the difference 'under the table'. When launderer later sells house - he recognizes 'gain' and all funds appear legitimate as it sold at market.
As a financial institution service that is very vulnerable to money laundering.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.


2. A 'Cash Letter' can also be referred to as _____.
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.
Pouch activity.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
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.


3. What was the effect of the 1988 Vienna Convention as it relates to extradtition?
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
If provided for money laundering to be an internationally extraditable offense.
Competent authorities should have powers of subpoena - search and seizure.
The world's largest private DB of stolen art.


4. Scheme
A bank which uses the services of another bank - such as check clearing - wire transfers - etc. The bank providing the service is the 'Correspondent Bank'
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
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.


5. FATF Sepcial Recommendation on Terrorist Financing -- SR Four
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.
Strengthen customer identification measures in iternational and domestic wire transfers.
tipped off that they are being investigated.
Report suspicious transactions linked to terrorism.


6. Examples of VSP's
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
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.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.


7. What was the target of UN Security Council Resolution 1373?
Terrorism and Terrorist Financing
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
Financial Action Task Force


8. FATF Recommendation 9
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.
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.
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.
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.


9. FATF Recommendation 2
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
Refers to dishonest broker-dealers who set up a group of high pressure salespeople who use banks of telephones to make cold calls to as many potential investors as possible.
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.


10. 'Coucil of Europe Convention on Laundering - Search - Seizure and Confiscation of the Proceeds from Crime' is known for what?
People who help move the billions of dollars drug traffickers earn around the world.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.


11. (Stock) Warrants
Review customer files and conduct random sampling of accounts.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
tipped off that they are being investigated.
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.


12. What do boiler room salespeople typically sell?
Penny Stocks
Refers to dishonest broker-dealers who set up a group of high pressure salespeople who use banks of telephones to make cold calls to as many potential investors as possible.
If provided for money laundering to be an internationally extraditable offense.
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.


13. Fraud
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
No.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
Provide mutual legal assistance.


14. FATF Recommendations examples of non-financial businesses and professions
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
foreign correspondent banks
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.


15. FATF Recommendation 38
bear the mark 'APOSTILLE'
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.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.


16. Transparency International
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.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
Refers to where the agent is acting under a contractual arrangement with the insurer to carry out its CDD functions (i.e. the agent is regarded as synonymous with the insurer) [FATF Risk-Based approach - Guidance for the Life Insurance Sector - Oct 0
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.


17. Bust-out
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
The means through which the insurance products and services are provided to a customer [FATF Risk-Based approach - Guidance for the Life Insurance Sector - Oct 09]
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.


18. What are the two types of Stored Value Cards?
Open and Closed system
Urge investors to buy 'house stocks' - stocks that the firm buys and sells as a market maker or has in its inventory. Oftentimes - they are running a 'pump-and-dumo' scheme.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.


19. What is a Private Investment company (PIC)?
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
Foreign Corrupt Practices Act


20. Nostro

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21. Why is it imperative to have a strong Know Your Employee program?
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.
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).
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
Freeze and confiscate terrorist assets.


22. FATF Recommendation 18
Countries should not allow shell banks. Financial institutions should not have correspondent banking relationships with shell banks or banks that allow shell banks to do business through their accounts.
Firm or person that solicits and accepts commodity futures orders from customers but does not accept funds. Two types of IB_C's: Guaranteed and Independent.
Banking services between merchant banks and other financial institutions.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.


23. 'Loan Back' method. Give example of how it works.

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24. FATF Recommendation 17
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.
Competent authorities should have powers of subpoena - search and seizure.
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
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.


25. As considered by UN and OECD - these are jurisdictions that have no or low tax rates - and do not attract real business or foreign investment
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
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.
Harmful or Preferrential Tax Regimes.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.


26. Identification data
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
Reliable - independent source of documents - data or information.
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 International Monetary Fund (IMF) and the world bank conduct the joint program.


27. Vital Service Providers (VSPs)
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
People who help move the billions of dollars drug traffickers earn around the world.
Intergovernmental Action Group against Money Laundering in Africa
The International Monetary Fund (IMF) and the world bank conduct the joint program.


28. Under the US Bank Secrecy Act - SAR filings are confidential and the institutions employees cannot ____?

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29. FATF Recommendation 28
Competent authorities should have powers of subpoena - search and seizure.
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
The process of agreeing to purchase a new issue of securities from an issuer and distribute it to investors. The underwriter makes a profit between the price paid to the issuer and the public offering price.
2% - 5% ($590B - $1.5T)


30. FATF Recommendation 6
Transportation/transfer of funds (even clean) to/from the US - if done to promote unlawful activity - or with knowledge that the funds are illicit - or to conceal/disguise the nature - location - source - ownership - etc. of funds - or to avoid feder
A written statement given under oath before an officer of the court - notary public - or other authorized person. Commonly used as the factual basis for an application for a search - arrest or seizure warrant.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.


31. When was the Offshore Group of Banking Supervisors established? What was the impetus behind its establishment?
Countries should not allow shell banks. Financial institutions should not have correspondent banking relationships with shell banks or banks that allow shell banks to do business through their accounts.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
Market participants intentionally restrict a security's liquidity. May lead to increased profits when the security's price rises due to the lack of 'supply'.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).


32. Why do convertible bonds oftern have lower interest rates than non-convertible bonds?
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.
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.
They can accrue value as the price of the underlying stock rises.
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.


33. Who appoints a 'Federal Receiver' (US)?
A US Federal Court
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.
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.


34. FATF Sepcial Recommendation on Terrorist Financing -- SR Three
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
Stored Value Cards - Mobile Payments - Internet Payments.
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.
Freeze and confiscate terrorist assets.


35. Should one ever file a Suspicious Transaction Report (STR/SAR) based on a person's profile?

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36. Why is 'Know Your Correspondent Bank' important?
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.
Funds transfers - Shell Corporations - Contractual Transactions.
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.


37. FATF Recommendation 19
A deliberate attempt to interfere with the free and fair operation of the market and create artificial - false or misleading appearances with respect to the price of - or market for a security - commodity or currency.
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.
Canada
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.


38. FATF Recommendation 10
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
Impose AML requirements on alternative remittance systems.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.


39. 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...
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
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.
foreign correspondent banks


40. FATF Recommendation 36
A co-operative property seller agrees to sell home at a well-below market reported price - then accepts the difference 'under the table'. When launderer later sells house - he recognizes 'gain' and all funds appear legitimate as it sold at market.
Often co-branded by financial institution; may have VISA or MasterCard logos; can be reloadable; usually can access ATMs for withdrawls globally; non-customers can buy them.
Provide mutual legal assistance.
Confiscation


41. FATF
Financial Action Task Force
Direct money of Criminal A is sent to foreign bank account of company B. Investment company C is formed as A's country. A is appointed as director of C. C borrows money from B and buys building which is rented to 3rd parties. with rent - C pays off B
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
Funds transfers - Shell Corporations - Contractual Transactions.


42. Dematerialization of Securities

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43. (Credit card) Acquiring Bank
2% - 5% ($590B - $1.5T)
A bank which uses the services of another bank - such as check clearing - wire transfers - etc. The bank providing the service is the 'Correspondent Bank'
Processes transactions for merchants who accept credit cards.
The opposing part of a transaction or trade.


44. Who appear to be predominant users of hawalas and other alternative remittance systems?
2% - 5% ($590B - $1.5T)
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
Expatriates sending money back to their home country or by other individuals sending money abroad.
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.


45. Who issues the Internationa Narcotics Control Strategy Report (INCSR) and how often?
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
The US State Dept issues the report annually.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
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.


46. Examples of White-collar crime
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
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.
foreign correspondent banks
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.


47. FATF Recommendation 30
Direct money of Criminal A is sent to foreign bank account of company B. Investment company C is formed as A's country. A is appointed as director of C. C borrows money from B and buys building which is rented to 3rd parties. with rent - C pays off B
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
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.
As 'felonies' or 'all offenses in the criminal code'.


48. Arrest Warrant
no regulatory power or function
a Sr Management level
Court order directing a law enforcement officer to seize and detain a particular person and require them to provide an answer to a compliant or otherqise appear in court.
a chain-referral scheme.


49. OCC Office of the Comptroller of the Currency
Firm or person that solicits and accepts commodity futures orders from customers but does not accept funds. Two types of IB_C's: Guaranteed and Independent.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
Direct or indirect advisor on buying and selling futures or commodity options.


50. Characteristics of an 'Open System Stored Value Card'
People who help move the billions of dollars drug traffickers earn around the world.
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
Often co-branded by financial institution; may have VISA or MasterCard logos; can be reloadable; usually can access ATMs for withdrawls globally; non-customers can buy them.
It was the first law in any country to make money laundering a crime.