Certified Anti Money Laundering Specialist Cams

Instructions:

• Answer 50 questions in 15 minutes.
• If you are not ready to take this test, you can study here.
• Match each statement with the correct term.
• Don't refresh. All questions and answers are randomly picked and ordered every time you load a test.

This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.

1. (Credit Card) Third-Party processor
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.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
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.


2. Transparency International
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.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.


3. How are 'Predicate Crimes' sometimes identified?

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4. Convertible Preferred
Take immediate steps to ratify and implement the UN instruments.
Impose AML requirements on alternative remittance systems.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws


5. What is a 'Trust'?
Reliable - independent source of documents - data or information.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
Impose AML requirements on alternative remittance systems.
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.


6. Investment Adviser
An electronic quotation system that displays quotes of many securities traded over the counter.
Person who - for compensation - provides advice on securities and investments and manages client assets.
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
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.


7. What must a financial institution do if they have 'Exempt Accounts'?
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.


8. Vital Service Providers (VSPs)
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
EurAsian Group
People who help move the billions of dollars drug traffickers earn around the world.
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).


9. Commodity Pool Operator
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
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.
disrupt or adversely afftect the business of the bank.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).


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


11. FATF Recommendation 20
EurAsian Group
Solicits potential customers and issues the credit cards.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.


12. Why is a 'money order' attractive to a money launderer?
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
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.
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.


13. What do boiler room salespeople typically do?

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14. What does the 'SEC' (US Securities and Exchange Commission) do?
a Sr Management level
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
The International Monetary Fund (IMF) and the world bank conduct the joint program.
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.


15. What are the three main functions of a 'Transfer Agent'?
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 exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
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.
Competent authorities should have powers of subpoena - search and seizure.


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

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17. How do most governments view Private Banking?
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
As a financial institution service that is very vulnerable to money laundering.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.


18. Cash Equivalent

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19. Boiler Room
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
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.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.


20. What is the aim of Joint Money Laundering Steering Group? (UK)
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.
disrupt or adversely afftect the business of the bank.
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 promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws


21. How does the Egmont group help its members?
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
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.
Penny Stocks
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)


22. Futures Commission Merchant (FCM)
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).
Typical mass-market banking where individual customers use local branches of larger commercial banks.
a chain-referral scheme.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.


23. Foriegn Shell Banks are vehicles for ______ & ______?
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
Money Laundering and Tax Evasion
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.


24. Many jurisdictions have legislation to ensure that suspects are not ____?
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
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.
tipped off that they are being investigated.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.


25. FATF Recommendation 23
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.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
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.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.


26. Scheme
If provided for money laundering to be an internationally extraditable offense.
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.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.


27. What is private investment company also known as?
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.
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.
Financial Action Task Force on Money Laundering in South America
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.


28. What is meant by 'Know Your Customer's customer'?
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.
People who help move the billions of dollars drug traffickers earn around the world.
Harmful or Preferrential Tax Regimes.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.


29. What do 'Hedge Funds' attempt to do?
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
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'.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
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.


30. FATF Recommendation 10
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
Confiscation
They can accrue value as the price of the underlying stock rises.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.


31. 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.
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 terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.


32. The Vienns Convention
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
Expatriates sending money back to their home country or by other individuals sending money abroad.
Freeze and confiscate terrorist assets.
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].


33. Why is 'Know Your Correspondent Bank' important?
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.
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.
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.
Stored Value Cards - Mobile Payments - Internet Payments.


34. Who conducts the Financial Sector Assessment Program (FSAP)?
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.
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
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.
The International Monetary Fund (IMF) and the world bank conduct the joint program.


35. Underwriting
Report suspicious transactions linked to terrorism.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
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.


36. Should one ever file a Suspicious Transaction Report (STR/SAR) based on a person's profile?

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37. 'Competent Authorities' refers to _____.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.


38. What was the effect of the 1988 Vienna Convention as it relates to extradtition?
foreign correspondent banks
If provided for money laundering to be an internationally extraditable offense.
tipped off that they are being investigated.
The world's largest private DB of stolen art.


39. FATF Recommendation 14
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.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
Confiscation


40. 'Open-end Mutual Fund' (or Company)

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41. What are included in the Wolfsberg AML Principles on Private Banking?
It was the first law in any country to make money laundering a crime.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
Freeze and confiscate terrorist assets.


42. Margin
Canada
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
Harmful or Preferrential Tax Regimes.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.


43. (Credit Card) Issuing Bank
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
Solicits potential customers and issues the credit cards.
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.
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.


44. GAFISUD
Financial Action Task Force on Money Laundering in South America
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
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]


45. Example of use of an Apostille
Confiscation
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.
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
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.


46. SRO (Self-Regulatory Organizations)
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
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.
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.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.


47. Open System Stored Value Card
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
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.
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
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.


48. What are some of the AML dangers of casino junkets?
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.
Countering the Financing of Terrorism (Counter Terrorist Financing).
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.


49. Examples of White-collar crime
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.


50. MENAFATF
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.
Middle East and North Africa Financial Action Task Force
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.
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.