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. In what country is the Egmont Group Secretariat now located?
Canada
foreign correspondent banks
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
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.


2. The Joint Money Laundering Steering Group (UK) has published a series of AML Guidance Notes for different sectors of the financial community. But - As a group of trade associations - it has...
no regulatory power or function
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
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.
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.


3. Wholesale Banking
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].
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.
If provided for money laundering to be an internationally extraditable offense.
Banking services between merchant banks and other financial institutions.


4. FATF Recommendation 19
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
It was the first law in any country to make money laundering a crime.
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


5. FATF Recommendation 9
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]
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
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 prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.


6. What are the three main functions of a 'Transfer Agent'?
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
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.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
As a financial institution service that is very vulnerable to money laundering.


7. (Credit card) Acquiring Bank
Typical mass-market banking where individual customers use local branches of larger commercial banks.
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
Processes transactions for merchants who accept credit cards.
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.


8. FATF Recommendation 23
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.
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
A market is which securities are bought and sold outside of establisehd securities markets.


9. Free Look Period
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
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
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.


10. Corporate Bank

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11. Penny Stocks
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.
no regulatory power or function
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.
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.


12. Examples of White-collar crime
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
Stored Value Cards - Mobile Payments - Internet Payments.
The FIU of the UK


13. Why is a 'money order' attractive to a money launderer?
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
foreign correspondent banks


14. FCPA (US)
Foreign Corrupt Practices Act
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.
Countries should recognize money laundering as an extraditable offense.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)


15. USA Patriot Act Section 312 'Offshore Bank'
As a financial institution service that is very vulnerable to money laundering.
Expatriates sending money back to their home country or by other individuals sending money abroad.
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.
Penny Stocks


16. A pyramid scheme is also called...
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
Futures contracts - forwards - swaps or options.
a chain-referral scheme.


17. Open System Stored Value Card
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
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.
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.


18. Underwriting
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
The International Monetary Fund (IMF) and the world bank conduct the joint program.
As 'felonies' or 'all offenses in the criminal code'.
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.


19. How does the Egmont group help its members?
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
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.
The possibility that lawsuits adverse judgements or contracts that turn out to be unenforceable can disrupt or adversely affect the operatinos or condition of a financial siutation.
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.


20. FATF Recommendation 1
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
a Sr Management level
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.


21. Who appoints a 'Federal Receiver' (US)?
FATF principles should apply to all branches and subsidiaries of a financial institution - even those abroad. Inability to do should re reported to parent institution's regulatory/supervisory authority.
As 'felonies' or 'all offenses in the criminal code'.
A US Federal Court
No.


22. A 'panzi' scheme is named for whom?
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.
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
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.
2% - 5% ($590B - $1.5T)


23. Who issues the Internationa Narcotics Control Strategy Report (INCSR) and how often?
The US State Dept issues the report annually.
To reduce financial crime - including money laundering and terrorit financing.
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
The FIU of the UK


24. Cash Log

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

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26. FATF Recommendation 17
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.


27. FATF Sepcial Recommendation on Terrorist Financing -- SR Six
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
Impose AML requirements on alternative remittance systems.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
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. What is a 'NCCT'?
Processes transactions for merchants who accept credit cards.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
Countries should recognize money laundering as an extraditable offense.
As 'felonies' or 'all offenses in the criminal code'.


29. Abusive Squeezes

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30. GIABA
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
Intergovernmental Action Group against Money Laundering in Africa
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.
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].


31. Distribution Channels (Insurance Industry)
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.
Strengthen customer identification measures in iternational and domestic wire transfers.
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.
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]


32. Mutual Fund
Absolutely NOT. If the decision is based purely on profile - then you are discriminating. you need to file such reports on the ACTIVITY especially if it differs from the 'normal and expected' as reflected in the customer profile.
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 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.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.


33. In general terms - EDD requires what of a financial institution?

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34. What is the Serious Organised Crime Agency (SOCA)?
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
that appear to be linked
The FIU of the UK
bear the mark 'APOSTILLE'


35. Options/Options Contract
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 Corrupt Practices Act
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
The right - but not the obligation - to buy or sell a set amount of something - such as a share or commodity - at a set price after a set expiration date.


36. Commodity Trading Advisor
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.
tipped off that they are being investigated.
Direct or indirect advisor on buying and selling futures or commodity options.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.


37. 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.
It was the first law in any country to make money laundering a crime.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.


38. FATF Recommendation 39
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.
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 recognize money laundering as an extraditable offense.
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.


39. The 'Art Loss Register'

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40. Characteristics of an 'Open System Stored Value Card'
Futures contracts - forwards - swaps or options.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
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.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.


41. FATF Recommendation 7

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42. What are some of the AML dangers of casino junkets?
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
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.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
Banking services between merchant banks and other financial institutions.


43. 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...
Middle East and North Africa Financial Action Task Force
foreign correspondent banks
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
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.


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


45. Operational risks in KYC context relate to...
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 grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.


46. What are the two types of Stored Value Cards?
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
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
Open and Closed system
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.


47. Examples of VSP's
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.
Money Laundering and Tax Evasion
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].


48. What does a 'Commission Rogatoire' normally specify?
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.
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 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).
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.


49. A public perception that a bank is not able to manage its operational risk effectively can...
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
disrupt or adversely afftect the business of the bank.
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
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.


50. What is private investment company also known as?
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.
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.
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.
Countries should recognize money laundering as an extraditable offense.