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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 20
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.

2. FATF Recommendation 33
An electronic quotation system that displays quotes of many securities traded over the counter.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
Banking services between merchant banks and other financial institutions.

3. FATF Recommendation 12
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
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).

4. Agent (Insurance Industry)
2% - 5% ($590B - $1.5T)
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
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
The world's largest private DB of stolen art.

5. GIABA
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
It was the first law in any country to make money laundering a crime.
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
Intergovernmental Action Group against Money Laundering in Africa

6. FATF Recommendation 25
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
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.
Processes transactions for merchants who accept credit cards.
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.

7. How do most governments view Private Banking?
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'
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
As a financial institution service that is very vulnerable to money laundering.

8. May a shell bank maintain a correspondent account with a US bank?
No.
Terrorism and Terrorist Financing
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
Expatriates sending money back to their home country or by other individuals sending money abroad.

9. What the primary objectives of Offshore Group of Banking Supervisors?
A US Federal Court
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
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).
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.

10. Distribution Channels (Insurance Industry)
Processes transactions for merchants who accept credit cards.
If provided for money laundering to be an internationally extraditable offense.
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]
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)

11. The Palemo Convention
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'
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
disrupt or adversely afftect the business of the bank.
Countering the Financing of Terrorism (Counter Terrorist Financing).

12. What is a 'NCCT'?
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
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.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.

13. 'Competent Authorities' refers to _____.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
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.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.

14. Wire Transfers
Impose AML requirements on alternative remittance systems.
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
EurAsian Group

15. In Emerging Money Laundering Risks - what 3 areas are associated with 'Contractual Transactions'?
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
To provide a forum for FIU's (Financial Intelligence Unit) to improve support to their respective national AML progrmans and development protocols for the sharing of information.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.

16. OCC Office of the Comptroller of the Currency
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.

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

18. In Emerging Money Laundering Risks - what 3 methods are identified as 'Funds Transfers'?
The FIU of the UK
Stored Value Cards - Mobile Payments - Internet Payments.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.

19. Identification data
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
Reliable - independent source of documents - data or information.
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.

20. Abusive Squeezes
Confiscation
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
Market participants intentionally restrict a security's liquidity. May lead to increased profits when the security's price rises due to the lack of 'supply'.
Banking services between merchant banks and other financial institutions.

21. Cash Letter
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
Review customer files and conduct random sampling of accounts.
Open and Closed system
The world's largest private DB of stolen art.

22. Respondent Bank
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
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.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
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'

23. Examples of White-collar crime
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
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 chain-referral scheme.
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.

24. Why is 'refining' critical to a money launderer's efforts?
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.
Penny Stocks
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.

25. 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).
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
Harmful or Preferrential Tax Regimes.
Letters Rogatory

26. What is private investment company also known as?
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
Countering the Financing of Terrorism (Counter Terrorist Financing).
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
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.

27. 'Closed-end Mutual Fund' (Or Comany)
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.
Typical mass-market banking where individual customers use local branches of larger commercial banks.
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).
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.

28. Foriegn Shell Banks are vehicles for ______ & ______?
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.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
Money Laundering and Tax Evasion
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.

29. What do 'Hedge Funds' attempt to do?
a chain-referral scheme.
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
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.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.

30. What normal business practise makes 'Product Division' possible?
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
Take immediate steps to ratify and implement the UN instruments.
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.
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.

31. Affidavit
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.
As a financial institution service that is very vulnerable to money laundering.
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.
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.

32. FATF Recommendation 8
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
The FIU of Russia

33. Legal Arrangements (Insurance Industry)
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
A market is which securities are bought and sold outside of establisehd securities markets.
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]

34. Cash Equivalent
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.
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
Foreign Corrupt Practices Act

35. Retail Banking
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.
Typical mass-market banking where individual customers use local branches of larger commercial banks.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.

36. FATF Recommendation 21
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
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
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.

37. Dormant Account
An account that does not show activity other than the posting of interest or account maintenance fees.
a chain-referral scheme.
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).
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.

38. FATF Recommendation 30
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]
No.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
Typical mass-market banking where individual customers use local branches of larger commercial banks.

39. Bust-out
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
Harmful or Preferrential Tax Regimes.
An account that does not show activity other than the posting of interest or account maintenance fees.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.

40. In what country is the Egmont Group Secretariat now located?
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
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.
To reduce financial crime - including money laundering and terrorit financing.
Canada

41. FATF Recommendation 11
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
Pouch activity.
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.

42. Why do companies export their goods at prices far below those in their home country?
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.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
It was the first law in any country to make money laundering a crime.
Harmful or Preferrential Tax Regimes.

43. What is a Private Investment company (PIC)?
No.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
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.

44. A public perception that a bank is not able to manage its operational risk effectively can...
The FIU of the UK
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.
disrupt or adversely afftect the business of the bank.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.

45. Automated Sale
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.
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.
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.
no regulatory power or function

46. How are 'Predicate Crimes' sometimes identified?
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.
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.
As 'felonies' or 'all offenses in the criminal code'.
Open and Closed system

47. When is a jurisdiction considered to be 'ring-fenced'?
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
tipped off that they are being investigated.
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.

48. 'Commission Rogatoire' known in English as?
Letters Rogatory
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
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.
no regulatory power or function

49. FATF Sepcial Recommendation on Terrorist Financing -- SR Eight
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
Financial Action Task Force

50. What tend to be the markings of Private Banking transactions?
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.
An electronic quotation system that displays quotes of many securities traded over the counter.
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.
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.

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