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 must a financial institution do if they have 'Exempt Accounts'?
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.


2. How is 'Identity theft' often accomplished?
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
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.


3. How are 'Predicate Crimes' sometimes identified?

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4. FATF Recommendation 7

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5. Example of use of an Apostille
Solicits potential customers and issues the credit cards.
The opposing part of a transaction or trade.
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.
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


6. How do most governments view Private Banking?
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
As a financial institution service that is very vulnerable to money laundering.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
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.


7. Cash Equivalent

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8. Convertible Preferred
foreign correspondent banks
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.


9. Investment Adviser
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.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
Person who - for compensation - provides advice on securities and investments and manages client assets.
Direct or indirect advisor on buying and selling futures or commodity options.


10. FATF Recommendation 6
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.


11. Legal Arrangements (Insurance Industry)
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).
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.
Refers to express trusts or other similar legal arrangements - such as fiducie - treuhand and fideicomiso [FATF Risk-Based approach - Guidance for the Life Insurance Sector - Oct 09]
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.


12. FATF Recommendation 25
foreign correspondent banks
Open and Closed system
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
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.


13. Futures Commission Merchant (FCM)
An account that does not show activity other than the posting of interest or account maintenance fees.
As a financial institution service that is very vulnerable to money laundering.
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.


14. FATF Recommendation 35
Their financial institution may - wittingly or unwittingly - handle the proceeds of this crime while believing it is serving a legitimate client with major account balances.
Harmful or Preferrential Tax Regimes.
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.


15. Automated Sale
An account that does not show activity other than the posting of interest or account maintenance fees.
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
Use of electronic clearing houses to facilitate electronic transfers of money that complete transactions between two parties where the buyer receives securities - goods - services etc. in exchange for the money.
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.


16. Who issues the Internationa Narcotics Control Strategy Report (INCSR) and how often?
The US State Dept issues the report annually.
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.
The FIU of the UK
Futures contracts - forwards - swaps or options.


17. Downstream Correspondent Clearer
Harmful or Preferrential Tax Regimes.
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.
Applied by an authority - it is a special seal which certifies that a document is a true copy of an original. However - it does not and cannot speak to the validity of the document's content.
a Sr Management level


18. Apostille

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19. Vital Service Providers (VSPs)
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
People who help move the billions of dollars drug traffickers earn around the world.
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.


20. 'Open-end Mutual Fund' (or Company)

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21. Where is the Art Loss Register found?
Their financial institution may - wittingly or unwittingly - handle the proceeds of this crime while believing it is serving a legitimate client with major account balances.
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
www.artloss.com
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.


22. FATF Recommendation 29
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
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.
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
The FIU of the UK


23. What is one of the cental stragetic tools required for effective action against money laundering?
Confiscation
Freeze and confiscate terrorist assets.
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]
No.


24. A 'panzi' scheme is named for whom?
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
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.
Charles Ponzi - an Italian immigrant to the US who spent 10 years in jail for a scheme that defrauded 40 -000 people out of $15 million.


25. What was the target of UN Security Council Resolution 1373?
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
Countries should recognize money laundering as an extraditable offense.
Intergovernmental Action Group against Money Laundering in Africa
Terrorism and Terrorist Financing


26. 'Closed-end Mutual Fund' (Or Comany)

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27. What are the three main functions of a 'Transfer Agent'?
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
Issue and cancel securities certificates to reflect chagnes in ownership - act as an intermediary for the issuing company - and hanlde lost - stolen or destroyed certificates.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.


28. Why does a launderer try to run transactions through a concentration account of a financial institution?
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Impose AML requirements on alternative remittance systems.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.


29. Fraud
a chain-referral scheme.
Money Laundering and Tax Evasion
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).


30. What criterion does the US need to enforce its 'Extraterritorial Reach'?

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31. FATF's designated transactional threshold for Delaers is Precious metals and / or Precious Stones is _____.
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.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
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.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.


32. Underwriting
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.
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.
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.
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.


33. The IMF estimates that laundered funds compromise ______ of the world's GDP
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.
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.
2% - 5% ($590B - $1.5T)
Charles Ponzi - an Italian immigrant to the US who spent 10 years in jail for a scheme that defrauded 40 -000 people out of $15 million.


34. What is the Wolfsberg group?
tipped off that they are being investigated.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
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.


35. FATF Recommendation 23
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.
Foreign Corrupt Practices Act
Letters Rogatory


36. (Stock) Warrants
that appear to be linked
a Sr Management level
A market is which securities are bought and sold outside of establisehd securities markets.
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.


37. FATF Sepcial Recommendation on Terrorist Financing -- SR Four
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.
Take immediate steps to ratify and implement the UN instruments.
Report suspicious transactions linked to terrorism.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.


38. What are some of the AML dangers of casino junkets?
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.
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.
Reliable - independent source of documents - data or information.
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.


39. Credit Card Associations
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
To reduce financial crime - including money laundering and terrorit financing.
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.


40. FATF Recommendation 3
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
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'
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.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.


41. What is one of the Financial Service Authority's (UK) tasks?
To reduce financial crime - including money laundering and terrorit financing.
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Reliable - independent source of documents - data or information.


42. What the primary objectives of Offshore Group of Banking Supervisors?
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.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
Direct or indirect advisor on buying and selling futures or commodity options.
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.


43. Mutual Fund
The FIU of the UK
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
Countries should recognize money laundering as an extraditable offense.


44. EAG
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
EurAsian Group
Banking services between merchant banks and other financial institutions.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.


45. A pyramid scheme is also called...
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 principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.
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.
a chain-referral scheme.


46. Why do convertible bonds oftern have lower interest rates than non-convertible bonds?
Contract issued by an insurance company under which an investor provides the insurer with funds (a lump-sum or series of payments). The insurer then agrees to make periodic payments to the investor starting the immediately or in the future.
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
They can accrue value as the price of the underlying stock rises.
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.


47. Dormant Account
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.
An account that does not show activity other than the posting of interest or account maintenance fees.
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.


48. Why is 'Know Your Customer's Customer' important?
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
Letters Rogatory
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
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.


49. What is a 'Trust'?
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].
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.
have in place compulsory currency reporting requirements.
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.


50. Many jurisdictions have legislation to ensure that suspects are not ____?
Applied by an authority - it is a special seal which certifies that a document is a true copy of an original. However - it does not and cannot speak to the validity of the document's content.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
tipped off that they are being investigated.
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.