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. Who are the parties involved in a trust?
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
A bank which uses the services of another bank - such as check clearing - wire transfers - etc. The bank providing the service is the 'Correspondent Bank'
Intergovernmental Action Group against Money Laundering in Africa


2. FATF Recommendation 33
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
The FIU of Russia
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
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.


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

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4. May a shell bank maintain a correspondent account with a US bank?
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
No.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
A US Federal Court


5. Arrest Warrant
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.
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.
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 corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.


6. What criterion does the US need to enforce its 'Extraterritorial Reach'?

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7. FATF Recommendation 15
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
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.
Impose AML requirements on alternative remittance systems.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.


8. 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.
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.
Procedures used to determine the beneficial owners of a correspondent bank and the type of activity that wil be 'normal and expected' for the bank.
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.


9. In Emerging Money Laundering Risks - what 3 methods are identified as 'Funds Transfers'?
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
Stored Value Cards - Mobile Payments - Internet Payments.
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.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.


10. FATF
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 Action Task Force
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.
Freeze and confiscate terrorist assets.


11. Why is 'Know Your Customer's Customer' important?
Terrorism and Terrorist Financing
A US Federal Court
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.


12. Moneyval
Futures contracts - forwards - swaps or options.
Freeze and confiscate terrorist assets.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
Terrorism and Terrorist Financing


13. FATF Recommendation 4
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.
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
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.


14. Commodity Trading Advisor
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.
Take immediate steps to ratify and implement the UN instruments.
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.
Direct or indirect advisor on buying and selling futures or commodity options.


15. What is the significance of 'Non-Financial Trades and Businesses' in realtion to Money Laundering?
EurAsian Group
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.


16. What does Financial Sector AssessmentProgram (FSAP) do?
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
A market is which securities are bought and sold outside of establisehd securities markets.


17. A 'Cash Letter' can also be referred to as _____.
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.
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.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
Pouch activity.


18. Example of use of an Apostille
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
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 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.
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.


19. Downstream Correspondent Clearer
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.
Financial Action Task Force
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
Person who - for compensation - provides advice on securities and investments and manages client assets.


20. Why is it imperative to have a strong Know Your Employee program?
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.
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
Type of foreign bank that is incorporated in the host country but is considered to be owned by a foreign parent bank. It only needs to operarted under the host country's regulations.


21. What can result from on institution's disregard for the Basel Due Diligence Principle?
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.


22. FATF Sepcial Recommendation on Terrorist Financing -- SR Seven
People who help move the billions of dollars drug traffickers earn around the world.
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.
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.
Strengthen customer identification measures in iternational and domestic wire transfers.


23. Scheme
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
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.
Typical mass-market banking where individual customers use local branches of larger commercial banks.


24. What does a 'Commission Rogatoire' normally specify?
Harmful or Preferrential Tax Regimes.
Provide mutual legal assistance.
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.
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.


25. FATF Recommendation 18
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.
Direct or indirect advisor on buying and selling futures or commodity options.
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.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.


26. Why do companies export their goods at prices far below those in their home country?
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
The opposing part of a transaction or trade.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
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.


27. Why does a launderer try to run transactions through a concentration account of a financial institution?
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
Pouch activity.
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.


28. How do most governments view Private Banking?
As a financial institution service that is very vulnerable to money laundering.
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.
www.artloss.com
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.


29. Commodity
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
The FIU of Russia
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
have in place compulsory currency reporting requirements.


30. What is the goal of FSAP?
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.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
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.
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.


31. FATF's designated transactional threshold for Casinos (including Internet Casinos) is _____.
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.
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.


32. The 'Art Loss Register'

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33. FCPA (US)
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
Funds transfers - Shell Corporations - Contractual Transactions.
Foreign Corrupt Practices Act
have in place compulsory currency reporting requirements.


34. Cash Log

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35. Operational risks in KYC context relate to...
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
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 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.


36. Distribution Channels (Insurance Industry)
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
EurAsian Group
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.
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]


37. FATF Recommendation 1
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
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.


38. 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.
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.
Middle East and North Africa Financial Action Task Force
2% - 5% ($590B - $1.5T)


39. Vital Service Providers (VSPs)
People who help move the billions of dollars drug traffickers earn around the world.
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.
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.
a Sr Management level


40. FATF Recommendations examples of non-financial businesses and professions
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
As 'felonies' or 'all offenses in the criminal code'.


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

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42. Account Monitoring Order (UK and several other countries)
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.


43. What do 'Hedge Funds' attempt to do?
It conducts investigations in support of a government's confiscation or seizure efforts.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
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.
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.


44. Examples of VSP's
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.


45. Common types of 'Derivatives'
Strengthen customer identification measures in iternational and domestic wire transfers.
Futures contracts - forwards - swaps or options.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.


46. What is important about the US Money Laundering Control Act (MCLA)?
It was the first law in any country to make money laundering a crime.
They can accrue value as the price of the underlying stock rises.
that appear to be linked
Competent authorities should have powers of subpoena - search and seizure.


47. FATF Recommendation 30
Pouch activity.
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.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
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.


48. How does 'Product Diversion' work?
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
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.
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.
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.


49. Foriegn Shell Banks are vehicles for ______ & ______?
The US State Dept issues the report annually.
Money Laundering and Tax Evasion
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 exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.


50. In what country is the Egmont Group Secretariat now located?
A bank which uses the services of another bank - such as check clearing - wire transfers - etc. The bank providing the service is the 'Correspondent Bank'
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
Canada
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.