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Certified Anti Money Laundering Specialist Cams

Instructions:

Answer 50 questions in 15 minutes.
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Match each statement with the correct term.
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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 34
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
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.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data

2. (Credit Card) Issuing Bank
Absolutely NOT. If the decision is based purely on profile - then you are discriminating. you need to file such reports on the ACTIVITY especially if it differs from the 'normal and expected' as reflected in the customer profile.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
Solicits potential customers and issues the credit cards.
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'

3. Market Manipulation
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.
Canada
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
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.

4. FATF Recommendation 26
It conducts investigations in support of a government's confiscation or seizure efforts.
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
An electronic quotation system that displays quotes of many securities traded over the counter.
Countries should recognize money laundering as an extraditable offense.

5. How do most governments view Private Banking?
Expatriates sending money back to their home country or by other individuals sending money abroad.
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
As a financial institution service that is very vulnerable to money laundering.
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.

6. Identification data
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
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
Reliable - independent source of documents - data or information.

7. Vital Service Providers (VSPs)
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.
People who help move the billions of dollars drug traffickers earn around the world.
Penny Stocks
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.

8. 'Loan Back' method. Give example of how it works.
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.
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
no regulatory power or function
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.

9. 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?
The FIU of Russia
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.
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.
Review customer files and conduct random sampling of accounts.

10. FATF Sepcial Recommendation on Terrorist Financing -- SR One
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
Take immediate steps to ratify and implement the UN instruments.
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.
Impose AML requirements on alternative remittance systems.

11. What is a Private Investment company (PIC)?
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.
Strengthen customer identification measures in iternational and domestic wire transfers.
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
foreign correspondent banks

12. Who appoints a 'Federal Receiver' (US)?
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.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
The nature of the request - the relevant criminal charges in the requesting country - the legal provision under which the request is made - and the information that is sought.
A US Federal Court

13. Respondent Bank
Money Laundering and Tax Evasion
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'
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.
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.

14. A 'Cash Letter' can also be referred to as _____.
Countries should recognize money laundering as an extraditable offense.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
Pouch activity.

15. Why is 'Know Your Correspondent Bank' important?
As a key tool in detecting suspicious or money laundering activity - it is important because correspondent accounts are often used as conduits to launder criminal proceeds in international settings.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
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.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.

16. FATF Recommendation 39
Impose AML requirements on alternative remittance systems.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
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.
Countries should recognize money laundering as an extraditable offense.

17. What does a 'Commission Rogatoire' normally specify?
a Sr Management level
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
Their financial institution may - wittingly or unwittingly - handle the proceeds of this crime while believing it is serving a legitimate client with major account balances.
The 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.

18. OCC Office of the Comptroller of the Currency
Direct or indirect advisor on buying and selling futures or commodity options.
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.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.

19. 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...
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 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.
no regulatory power or function
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.

20. Why does a launderer try to run transactions through a concentration account of a financial institution?
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
Absolutely NOT. If the decision is based purely on profile - then you are discriminating. you need to file such reports on the ACTIVITY especially if it differs from the 'normal and expected' as reflected in the customer profile.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.

21. When was the Offshore Group of Banking Supervisors established? What was the impetus behind its establishment?
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
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.
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.

22. What does theInternationa Narcotics Control Strategy Report (INCSR) entail?
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]
EurAsian Group
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).

23. Futures Commission Merchant (FCM)
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
Money Laundering and Tax Evasion

24. Commodity Pool Operator
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
The US State Dept issues the report annually.
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.

25. GIABA
Intergovernmental Action Group against Money Laundering in Africa
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.

26. White-Collar crime
tipped off that they are being investigated.
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Placement - Layering - Integration.

27. Dematerialization of Securities
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.
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
As 'felonies' or 'all offenses in the criminal code'.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.

28. FATF's designated transactional threshold for Casinos (including Internet Casinos) is _____.
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.
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.

29. How is 'Legal Risk' defined by the 2001 Basel Due Diligence Principles?
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
The FIU of the UK
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.
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.

30. 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)
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
Banking services between merchant banks and other financial institutions.

31. What is the aim of Joint Money Laundering Steering Group? (UK)
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
Middle East and North Africa Financial Action Task Force
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.
Competent authorities should have powers of subpoena - search and seizure.

32. FATF Recommendation 30
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
Intergovernmental Action Group against Money Laundering in Africa
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.

33. 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.
Person who - for compensation - provides advice on securities and investments and manages client assets.
Terrorism and Terrorist Financing
FATF principles should apply to all branches and subsidiaries of a financial institution - even those abroad. Inability to do should re reported to parent institution's regulatory/supervisory authority.

34. What does an Extradition Treaty specify?
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
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.
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.

35. Investment Adviser
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.
Person who - for compensation - provides advice on securities and investments and manages client assets.
Placement - Layering - Integration.
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.

36. Express Trust
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.

37. Structuring is a common technique in jurisdictions that...
have in place compulsory currency reporting requirements.
Countries should recognize money laundering as an extraditable offense.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
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.

38. FATF Recommendation 6
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
The FIU of the UK
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
Absolutely NOT. If the decision is based purely on profile - then you are discriminating. you need to file such reports on the ACTIVITY especially if it differs from the 'normal and expected' as reflected in the customer profile.

39. How does the Egmont group help its members?
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.
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.
They can accrue value as the price of the underlying stock rises.
Financial Action Task Force on Money Laundering in South America

40. What is private investment company also known as?
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
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.
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.

41. What is a 'NCCT'?
Canada
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 prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
bear the mark 'APOSTILLE'

42. FATF Recommendation 23
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
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 fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.

43. Who appear to be predominant users of hawalas and other alternative remittance systems?
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.
Expatriates sending money back to their home country or by other individuals sending money abroad.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.

44. FCPA (US)
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.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
Foreign Corrupt Practices Act
People who help move the billions of dollars drug traffickers earn around the world.

45. Behaviour detection
An electronic quotation system that displays quotes of many securities traded over the counter.
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.

46. FATF Recommendation 2
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.
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
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.

47. FATF Recommendation 25
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
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.
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.

48. A pyramid scheme is also called...
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
a chain-referral scheme.

49. A public perception that a bank is not able to manage its operational risk effectively can...
disrupt or adversely afftect the business of the bank.
Take immediate steps to ratify and implement the UN instruments.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
Person who - for compensation - provides advice on securities and investments and manages client assets.

50. Fraud
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
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]
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 fund setup by an investment trust in which the number of shares can fluctuate as investors' move in and out the fund. Share prices moves in direct proportion of the net asset value of the underlying investments (no premium or discount).

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