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. SRO (Self-Regulatory Organizations)
Penny Stocks
Report suspicious transactions linked to terrorism.
To reduce financial crime - including money laundering and terrorit financing.
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.


2. What does the 'SEC' (US Securities and Exchange Commission) do?
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
Provide mutual legal assistance.
Terrorism and Terrorist Financing
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.


3. FATF Recommendation 35
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
EurAsian Group
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.


4. FATF Recommendation 33
An electronic quotation system that displays quotes of many securities traded over the counter.
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.


5. Portfolio Manager
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
Stored Value Cards - Mobile Payments - Internet Payments.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
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.


6. FATF Recommendation 8
An electronic quotation system that displays quotes of many securities traded over the counter.
Financial Action Task Force on Money Laundering in South America
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
bear the mark 'APOSTILLE'


7. Dormant Account
It conducts investigations in support of a government's confiscation or seizure efforts.
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
An account that does not show activity other than the posting of interest or account maintenance fees.
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.


8. OCC Office of the Comptroller of the Currency
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.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.


9. FATF Recommendation 14
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.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)


10. FATF Recommendation 39
A market is which securities are bought and sold outside of establisehd securities markets.
Countries should recognize money laundering as an extraditable offense.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
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.


11. How do 'Hedge Funds' operate?

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12. 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.
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
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.
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


13. Arrest Warrant
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
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.
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.


14. Behaviour detection

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15. MENAFATF
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
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.
Middle East and North Africa Financial Action Task Force
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.


16. Boiler Room
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
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.
Combines funds from various members and users them to trade in futures or options contracts.
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.


17. FATF Sepcial Recommendation on Terrorist Financing -- SR One
that appear to be linked
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
Take immediate steps to ratify and implement the UN instruments.
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.


18. Many jurisdictions have legislation to ensure that suspects are not ____?
tipped off that they are being investigated.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
The US State Dept issues the report annually.
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data


19. A 'panzi' scheme is named for whom?
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
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.


20. What is private investment company also known as?
As a financial institution service that is very vulnerable to money laundering.
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.
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
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.


21. FATF Recommendation 27
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
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]
Processes transactions for merchants who accept credit cards.


22. Money Mules
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
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.
Intergovernmental Action Group against Money Laundering in Africa
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].


23. Commodity
Typical mass-market banking where individual customers use local branches of larger commercial banks.
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
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.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.


24. FATF Recommendation 22

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25. Guaranteed Introducing Broker

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26. Margin
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.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
Impose AML requirements on alternative remittance systems.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.


27. FATF Recommendation 15
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.


28. Open System Stored Value Card
EurAsian Group
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.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.


29. Automated Sale
Freeze and confiscate terrorist assets.
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.
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
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.


30. Apostille

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31. FATF Recommendation 10
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.
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).
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
a chain-referral scheme.


32. FATF Recommendation 23
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
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.
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 have adequate supervision and regulation. Ensure no criminal element in position on control. Money transfer/exchangers should be registered and subjected to monitoring.


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

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34. The 'Art Loss Register'

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35. (Credit card) Acquiring Bank
As a financial institution service that is very vulnerable to money laundering.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
Reliable - independent source of documents - data or information.
Processes transactions for merchants who accept credit cards.


36. FATF Recommendation 4
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
As 'felonies' or 'all offenses in the criminal code'.


37. Investment Adviser
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
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.
Person who - for compensation - provides advice on securities and investments and manages client assets.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism


38. Why is it imperative to have a strong Know Your Employee program?
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.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.


39. 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.
The FIU of the UK
Funds transfers - Shell Corporations - Contractual Transactions.
a chain-referral scheme.


40. FATF Recommendation 12
The opposing part of a transaction or trade.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
Take immediate steps to ratify and implement the UN instruments.
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.


41. FATF Recommendation 29
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
Strengthen customer identification measures in iternational and domestic wire transfers.


42. Derivatives
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
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.
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
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.


43. US law prohibhits Foriegn Shell Banks from ____?
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
tipped off that they are being investigated.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)


44. Fraud
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
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


45. In what country is the Egmont Group Secretariat now located?
Canada
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
No.


46. FATF's designated transactional threshold for Delaers is Precious metals and / or Precious Stones is _____.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
The US State Dept issues the report annually.
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.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)


47. 'Competent Authorities' refers to _____.
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
Canada
It was the first law in any country to make money laundering a crime.


48. What is a Financial Intelligence Unit?
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
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.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.


49. A public perception that a bank is not able to manage its operational risk effectively can...
disrupt or adversely afftect the business of the bank.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
Funds transfers - Shell Corporations - Contractual Transactions.
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]


50. 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 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
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.