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 Recommendation 23
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.
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.
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.


2. Agent (Insurance Industry)
have in place compulsory currency reporting requirements.
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
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.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.


3. FATF Sepcial Recommendation on Terrorist Financing -- SR Three
Freeze and confiscate terrorist assets.
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.


4. Why is it imperative to have a strong Know Your Employee program?
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
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.
EurAsian Group
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.


5. Retail Banking
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.
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
Typical mass-market banking where individual customers use local branches of larger commercial banks.
An electronic quotation system that displays quotes of many securities traded over the counter.


6. What the primary objectives of Offshore Group of Banking Supervisors?
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
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.


7. Distribution Channels (Insurance Industry)
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
have in place compulsory currency reporting requirements.
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]


8. Many jurisdictions have legislation to ensure that suspects are not ____?
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
tipped off that they are being investigated.


9. How is 'Legal Risk' defined by the 2001 Basel Due Diligence Principles?
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.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
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.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.


10. Portfolio Manager
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.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
Stored Value Cards - Mobile Payments - Internet Payments.
The FIU of the UK


11. FATF Recommendation 36
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
As a financial institution service that is very vulnerable to money laundering.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
Provide mutual legal assistance.


12. Derivatives
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
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 instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
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.


13. What must a financial institution do if they have 'Exempt Accounts'?
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.


14. Where is the Art Loss Register found?
It was the first law in any country to make money laundering a crime.
www.artloss.com
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.
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.


15. Counter Party
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.
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
The opposing part of a transaction or trade.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism


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

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17. GIABA
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.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
Intergovernmental Action Group against Money Laundering in Africa
A contractual arrangement whereby the trustee manages the property for the benefit of the beneficiary in accordance with the contractual terms set by the grantor.


18. FATF Recommendation 16
The US State Dept issues the report annually.
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.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
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.


19. What does FIU do beyond what FIU does?

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20. What can result from on institution's disregard for the Basel Due Diligence Principle?
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
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.
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.


21. Legal Arrangements (Insurance Industry)
Direct or indirect advisor on buying and selling futures or commodity options.
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]
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
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.


22. What is the aim of Joint Money Laundering Steering Group? (UK)
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
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
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).
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.


23. The IMF estimates that laundered funds compromise ______ of the world's GDP
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.
Open and Closed system
2% - 5% ($590B - $1.5T)
Stored Value Cards - Mobile Payments - Internet Payments.


24. FATF Recommendation 20
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
A US Federal Court
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.
Countries should recognize money laundering as an extraditable offense.


25. 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
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.
no regulatory power or function
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
Harmful or Preferrential Tax Regimes.


26. How is 'Identity theft' often accomplished?
Review customer files and conduct random sampling of accounts.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
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.
Typical mass-market banking where individual customers use local branches of larger commercial banks.


27. CFT
Countering the Financing of Terrorism (Counter Terrorist Financing).
Person who - for compensation - provides advice on securities and investments and manages client assets.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.


28. Cash Log

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29. FATF Recommendation 35
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
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 take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
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.


30. Moneyval
tipped off that they are being investigated.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of 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.
The FIU of Russia


31. FATF Recommendation 40
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
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.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.


32. Examples of White-collar crime
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
It was the first law in any country to make money laundering a crime.
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.


33. Margin
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
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.
The US State Dept issues the report annually.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.


34. Corporate Bank

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35. Respondent Bank

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36. FATF Sepcial Recommendation on Terrorist Financing -- SR Six
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.
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.
Impose AML requirements on alternative remittance systems.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.


37. FATF Recommendation 4
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
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.


38. (Credit Card) Third-Party processor
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
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.
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.


39. Credit Card Associations
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.
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.
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.
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.


40. FATF Sepcial Recommendation on Terrorist Financing -- SR Seven
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 have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
Strengthen customer identification measures in iternational and domestic wire transfers.
A US Federal Court


41. What is the primary use of a 'Mutual Legal Assistance Treaty'?
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
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.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.


42. White-Collar crime

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43. Operational risks in KYC context relate to...
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
Review customer files and conduct random sampling of accounts.
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.
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.


44. (Stock) Warrants
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.
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.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws


45. FATF Recommendation 1
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 contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
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.


46. GAFISUD
Financial Action Task Force on Money Laundering in South America
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
Pouch activity.
A US Federal Court


47. Three stages of money laundering
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
The FIU of Russia
Placement - Layering - Integration.
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].


48. What is a Private Investment company (PIC)?
The opposing part of a transaction or trade.
disrupt or adversely afftect the business of the bank.
As a financial institution service that is very vulnerable to money laundering.
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.


49. Variable Annuity
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.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
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 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.


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

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