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Certified Anti Money Laundering Specialist Cams

Instructions:

Answer 50 questions in 15 minutes.
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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 do 'Hedge Funds' attempt to do?
Direct or indirect advisor on buying and selling futures or commodity options.
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
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.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.

2. (Credit card) Acquiring Bank
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
Processes transactions for merchants who accept credit cards.
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.
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.

3. Behaviour detection
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
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.
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.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.

4. What does the 'SEC' (US Securities and Exchange Commission) do?
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
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.

5. What is the primary use of a 'Mutual Legal Assistance Treaty'?
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.
Dealers in precious metals/stones - trust and company services providers - lawyers - notaries and accountants should all be required to report suspicious activity - but legal privilege cannot be violated.
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.

6. FATF Recommendation 34
no regulatory power or function
Countering the Financing of Terrorism (Counter Terrorist Financing).
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.

7. 'Competent Authorities' refers to _____.
It conducts investigations in support of a government's confiscation or seizure efforts.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.

8. Express Trust
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
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 trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
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.

9. Under the US Bank Secrecy Act - SAR filings are confidential and the institutions employees cannot ____?
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.
The FIU of Russia
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.
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.

10. FATF Recommendation 23
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.
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 have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.

11. What is a Financial Intelligence Unit?
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).
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
Provide mutual legal assistance.

12. Counter Party
It conducts investigations in support of a government's confiscation or seizure efforts.
Combines funds from various members and users them to trade in futures or options contracts.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
The opposing part of a transaction or trade.

13. A 'panzi' scheme is named for whom?
Provide mutual legal assistance.
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.
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
The world's largest private DB of stolen art.

14. What does FIU do?
It conducts investigations in support of a government's confiscation or seizure efforts.
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).
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
The FIU of the UK

15. What was the target of UN Security Council Resolution 1267?
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].

16. Convertible Preferred
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
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.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.

17. Open System Stored Value Card
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
Open and Closed system

18. SRO (Self-Regulatory Organizations)
have in place compulsory currency reporting requirements.
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.
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.
Countries should recognize money laundering as an extraditable offense.

19. Underwriting
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
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.
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.
Financial institutions should pay special attention to (and examine & document) complex - unusual large transactions - and all transactions which have no apparent economic or lawful purpose.

20. Money Mules
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.
To provide a forum for FIU's (Financial Intelligence Unit) to improve support to their respective national AML progrmans and development protocols for the sharing of information.
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.
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.

21. When is a jurisdiction considered to be 'ring-fenced'?
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
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.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
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.

22. 'Kiting' via credit card
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.
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.

23. What are the two types of Stored Value Cards?
An account that does not show activity other than the posting of interest or account maintenance fees.
www.artloss.com
Open and Closed system
Middle East and North Africa Financial Action Task Force

24. FATF Recommendation 38
The FIU of Russia
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.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.

25. FATF Recommendation 28
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.
2% - 5% ($590B - $1.5T)
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
Competent authorities should have powers of subpoena - search and seizure.

26. Convertible Bond
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.
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.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.

27. Market Manipulation
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
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.

28. Account Monitoring Order (UK and several other countries)
Open and Closed system
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
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.

29. In Emerging Money Laundering Risks - what 3 methods are identified as 'Funds Transfers'?
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
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.
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
Stored Value Cards - Mobile Payments - Internet Payments.

30. What is one of the cental stragetic tools required for effective action against money laundering?
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.
Middle East and North Africa Financial Action Task Force
Confiscation
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.

31. (Credit Card) Third-Party processor
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.
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.

32. What does FIU do beyond what FIU does?
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
The US State Dept issues the report annually.
It conducts investigations in support of a government's confiscation or seizure efforts.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.

33. FATF
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.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
that appear to be linked
Financial Action Task Force

34. According to FATF - financial transactions above a designated threshold may include situations where the transaction takes place in a single operation or in several operations...
that appear to be linked
Competent authorities should have powers of subpoena - search and seizure.
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]
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

35. Foriegn Shell Banks are vehicles for ______ & ______?
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
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.
Money Laundering and Tax Evasion

36. FATF Recommendation 24
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.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.

37. In what country is the Egmont Group Secretariat now located?
Canada
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.
A fund setup by an investment trust in which the number of shares can fluctuate as investors' move in and out the fund. Share prices moves in direct proportion of the net asset value of the underlying investments (no premium or discount).
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.

38. GAFISUD
An account that does not show activity other than the posting of interest or account maintenance fees.
Financial Action Task Force on Money Laundering in South America
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.

39. Characteristics of an 'Open System Stored Value Card'
a Sr Management level
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
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.
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.

40. Boiler Room
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.
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
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 fund setup by an investment trust in which the number of shares can fluctuate as investors' move in and out the fund. Share prices moves in direct proportion of the net asset value of the underlying investments (no premium or discount).

41. Abusive Squeezes
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
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.
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
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'.

42. FATF Recommendation 16
no regulatory power or function
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.
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
Dealers in precious metals/stones - trust and company services providers - lawyers - notaries and accountants should all be required to report suspicious activity - but legal privilege cannot be violated.

43. What must a financial institution do if they have 'Exempt Accounts'?
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
An electronic quotation system that displays quotes of many securities traded over the counter.
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.
Processes transactions for merchants who accept credit cards.

44. Mutual Fund
Take immediate steps to ratify and implement the UN instruments.
To provide a forum for FIU's (Financial Intelligence Unit) to improve support to their respective national AML progrmans and development protocols for the sharing of information.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.

45. Affidavit
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
www.artloss.com
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
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.

46. MENAFATF
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.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
Middle East and North Africa Financial Action Task Force
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.

47. How does the Egmont group help its members?
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.
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.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
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.

48. UK courts view on 'Suspicion'
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.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.

49. Moneyval
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
People who help move the billions of dollars drug traffickers earn around the world.
Review customer files and conduct random sampling of accounts.

50. Investment Adviser
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.
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.
Middle East and North Africa Financial Action Task Force

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