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. (Credit card) Acquiring Bank
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
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.
Processes transactions for merchants who accept credit cards.


2. What normal business practise makes 'Product Division' possible?
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
Financial Action Task Force
If provided for money laundering to be an internationally extraditable offense.
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.


3. FATF Recommendation 18
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.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.
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.
Expatriates sending money back to their home country or by other individuals sending money abroad.


4. Express Trust
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
bear the mark 'APOSTILLE'
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.


5. 'Kiting' via credit card
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
As 'felonies' or 'all offenses in the criminal code'.
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
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.


6. Commodity Pool
Combines funds from various members and users them to trade in futures or options contracts.
Financial Action Task Force
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
Pouch activity.


7. FATF Recommendation 22

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8. Penny Stocks
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 apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
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.
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.


9. Legal Arrangements (Insurance Industry)
EurAsian Group
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
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]
An account that does not show activity other than the posting of interest or account maintenance fees.


10. What is a Private Investment company (PIC)?
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
Open and Closed system
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.


11. USA Patriot Act Section 312 'Offshore Bank'
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
no regulatory power or function
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
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.


12. Dematerialization of Securities

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13. FATF Recommendation 16
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.
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.
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 apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.


14. What does the principal US money laundering law look for before implementing its 'Extraterritorial Reach'?
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
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
Canada


15. What is the FCPA primarily known for?
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.
www.artloss.com
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
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).


16. What tend to be the markings of Private Banking transactions?
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
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.
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.


17. Convertible Preferred
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
a chain-referral scheme.
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.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.


18. How is 'Identity theft' often accomplished?
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
Countries should recognize money laundering as an extraditable offense.
Take immediate steps to ratify and implement the UN instruments.
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.


19. 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...
It was the first law in any country to make money laundering a crime.
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
that appear to be linked
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.


20. FATF's designated transactional threshold for Delaers is Precious metals and / or Precious Stones is _____.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
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.
Their financial institution may - wittingly or unwittingly - handle the proceeds of this crime while believing it is serving a legitimate client with major account balances.
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.


21. FATF Recommendation 29
Report suspicious transactions linked to terrorism.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
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.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.


22. A 'Cash Letter' can also be referred to as _____.
Intergovernmental Action Group against Money Laundering in Africa
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
Pouch activity.


23. What is a 'Trust'?
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.
Report suspicious transactions linked to terrorism.
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.
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.


24. Cash Equivalent

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25. Moneyval
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
The world's largest private DB of stolen art.
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism


26. Why is 'Know Your Customer's Customer' important?
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
Terrorism and Terrorist Financing
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.


27. May a shell bank maintain a correspondent account with a US bank?
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.
No.
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.


28. Underwriting
A co-operative property seller agrees to sell home at a well-below market reported price - then accepts the difference 'under the table'. When launderer later sells house - he recognizes 'gain' and all funds appear legitimate as it sold at market.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
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.


29. FATF Recommendation 26
Harmful or Preferrential Tax Regimes.
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
2% - 5% ($590B - $1.5T)


30. A notary can issue a Apostille but it must be in a country that signed The Hague Convention (1961) and it must ___________. If the notary doesn't understand - find another one.

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31. Who issues the Internationa Narcotics Control Strategy Report (INCSR) and how often?
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.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
The US State Dept issues the report annually.
The world's largest private DB of stolen art.


32. The 'Art Loss Register'

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33. 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.
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]
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.


34. How is 'Legal Risk' defined by the 2001 Basel Due Diligence Principles?
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
Terrorism and Terrorist Financing
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
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.


35. FATF Recommendation 6
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].
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
Freeze and confiscate terrorist assets.


36. 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...
As 'felonies' or 'all offenses in the criminal code'.
Intergovernmental Action Group against Money Laundering in Africa
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).
no regulatory power or function


37. What is a Financial Intelligence Unit?
Direct or indirect advisor on buying and selling futures or commodity options.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.


38. Commodity Pool Operator
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
To reduce financial crime - including money laundering and terrorit financing.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism


39. What is the significance of 'Non-Financial Trades and Businesses' in realtion to Money Laundering?
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.
www.artloss.com
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.


40. Characteristics of an 'Open System Stored Value Card'
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
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.
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.


41. FATF Recommendation 34
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
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.
Placement - Layering - Integration.


42. FATF Sepcial Recommendation on Terrorist Financing -- SR Four
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
Report suspicious transactions linked to terrorism.
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
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.


43. FATF Recommendation 19
Financial Action Task Force on Money Laundering in South America
Canada
Reliable - independent source of documents - data or information.
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.


44. Affidavit
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.
2% - 5% ($590B - $1.5T)
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.
If provided for money laundering to be an internationally extraditable offense.


45. Who appoints a 'Federal Receiver' (US)?
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
A US Federal Court
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.


46. Behaviour detection

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47. Money Mules
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.
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).
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
foreign correspondent banks


48. Basel's 'CDD for Banks' states that the decision to open an account for a PEP should be taken at...
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
a Sr Management level
Strengthen customer identification measures in iternational and domestic wire transfers.
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.


49. 'Loan Back' method. Give example of how it works.

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50. FATF Sepcial Recommendation on Terrorist Financing -- SR Eight
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
Placement - Layering - Integration.