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. FATF Sepcial Recommendation on Terrorist Financing -- SR Nine
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
disrupt or adversely afftect the business of the bank.


2. Mutual Fund
foreign correspondent banks
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
Countering the Financing of Terrorism (Counter Terrorist Financing).


3. How do most governments view Private Banking?
As a financial institution service that is very vulnerable to money laundering.
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.
Banking services between merchant banks and other financial institutions.
Typical mass-market banking where individual customers use local branches of larger commercial banks.


4. Commodity Trading Advisor
Direct or indirect advisor on buying and selling futures or commodity options.
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
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
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].


5. What is the FCPA primarily known for?
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
Passed in 1977 - the US law is primarily known for its anti-bribery provisions (it also applies to foreign companies with stocks covered by the Securities and Exchange Act of 1934).
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
Funds transfers - Shell Corporations - Contractual Transactions.


6. Retail Banking
Typical mass-market banking where individual customers use local branches of larger commercial banks.
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.
Banking services between merchant banks and other financial institutions.
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.


7. FATF Recommendation 9
Money Laundering and Tax Evasion
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
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.
have in place compulsory currency reporting requirements.


8. What is a Private Investment company (PIC)?
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
EurAsian Group
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.


9. FATF Recommendation 7

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10. FATF Recommendation 35
Futures contracts - forwards - swaps or options.
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.
Canada
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.


11. FATF Sepcial Recommendation on Terrorist Financing -- SR Five

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12. Why is it imperative to have a strong Know Your Employee program?
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.


13. SRO (Self-Regulatory Organizations)
Countries should recognize money laundering as an extraditable offense.
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 have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
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.


14. How are 'Predicate Crimes' sometimes identified?

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15. What is the goal of FSAP?
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
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.
It was the first law in any country to make money laundering a crime.
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


16. Why is 'refining' critical to a money launderer's efforts?
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.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
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 recognize money laundering as an extraditable offense.


17. Free Look Period
Canada
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.
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
tipped off that they are being investigated.


18. What do boiler room salespeople typically do?

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19. What does FIU do beyond what FIU does?

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20. FATF's designated transactional threshold for Financial Insitutions is _____.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
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.
Impose AML requirements on alternative remittance systems.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.


21. As considered by UN and OECD - these are jurisdictions that have no or low tax rates - and do not attract real business or foreign investment
Harmful or Preferrential Tax Regimes.
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
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]
To reduce financial crime - including money laundering and terrorit financing.


22. Options/Options Contract
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.
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.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
Penny Stocks


23. Basel committee's 'Customer Due Diligence for Banks' when verifying a unit's compliance with KYC policies and procedures - the home country supervisors or auditors should do what?
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
Terrorism and Terrorist Financing
EurAsian Group
Review customer files and conduct random sampling of accounts.


24. When was the Offshore Group of Banking Supervisors established? What was the impetus behind its establishment?
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
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.


25. Cash Equivalent

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26. Who issues the Internationa Narcotics Control Strategy Report (INCSR) and how often?
The US State Dept issues the report annually.
Direct or indirect advisor on buying and selling futures or commodity options.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
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.


27. FATF Recommendation 30
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.


28. FATF Recommendation 38
As a financial institution service that is very vulnerable to money laundering.
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.
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.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.


29. 'Coucil of Europe Convention on Laundering - Search - Seizure and Confiscation of the Proceeds from Crime' is known for what?
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
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.
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.


30. What is a Financial Intelligence Unit?
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.
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.


31. When is a jurisdiction considered to be 'ring-fenced'?
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.


32. (Credit Card) Issuing Bank
Solicits potential customers and issues the credit cards.
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.
Processes transactions for merchants who accept credit cards.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.


33. How does the Egmont group help its members?
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.
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.
No.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)


34. Why is 'Know Your Correspondent Bank' important?
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 create new overseas markets - dispose of excess goods - or otherwise recover their costs.
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.
Penny Stocks


35. Many jurisdictions have legislation to ensure that suspects are not ____?
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
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.
tipped off that they are being investigated.
Impose AML requirements on alternative remittance systems.


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

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37. Why is 'Know Your Customer's Customer' important?
Funds transfers - Shell Corporations - Contractual Transactions.
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
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.
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.


38. OTC markets Over-The-Counter
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
Open and Closed system
A market is which securities are bought and sold outside of establisehd securities markets.
The opposing part of a transaction or trade.


39. EAG
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
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.
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
EurAsian Group


40. Affidavit
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.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].


41. What was the target of UN Security Council Resolution 1373?
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
Terrorism and Terrorist Financing


42. FATF Recommendation 31
Countries should recognize money laundering as an extraditable offense.
Person who - for compensation - provides advice on securities and investments and manages client assets.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
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.


43. FATF Recommendation 36
Provide mutual legal assistance.
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.
The opposing part of a transaction or trade.
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.


44. Reverse Flip

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45. FATF Recommendations examples of non-financial businesses and professions
Combines funds from various members and users them to trade in futures or options contracts.
Penny Stocks
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.


46. Who are the parties involved in a trust?
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.
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).


47. Pink Sheets
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
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 electronic quotation system that displays quotes of many securities traded over the counter.
Terrorism and Terrorist Financing


48. What does the 'SEC' (US Securities and Exchange Commission) do?
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
www.artloss.com
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).


49. Apostille

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50. FATF Recommendation 28
Competent authorities should have powers of subpoena - search and seizure.
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.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.