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. Why do companies export their goods at prices far below those in their home country?
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.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
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 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.


2. 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 fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
Penny Stocks
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.


3. How does the Egmont group help its members?
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
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.
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.


4. Convertible Preferred
Harmful or Preferrential Tax Regimes.
No.
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.


5. (Credit Card) Issuing Bank
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.
Harmful or Preferrential Tax Regimes.
Solicits potential customers and issues the credit cards.
2% - 5% ($590B - $1.5T)


6. Why do convertible bonds oftern have lower interest rates than non-convertible bonds?
They can accrue value as the price of the underlying stock rises.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
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.
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.


7. Nostro

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8. What is meant by 'Know Your Correspondent Bank'?

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9. Corporate Bank

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10. In Emerging Money Laundering Risks - what 3 methods are identified as 'Funds Transfers'?
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.
Penny Stocks
Stored Value Cards - Mobile Payments - Internet Payments.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.


11. Penny Stocks
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
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.
Expatriates sending money back to their home country or by other individuals sending money abroad.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.


12. Respondent Bank

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13. How do 'Hedge Funds' operate?

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14. What is one of the Financial Service Authority's (UK) tasks?
To reduce financial crime - including money laundering and terrorit financing.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
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.
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.


15. Counter Party
An electronic quotation system that displays quotes of many securities traded over the counter.
The opposing part of a transaction or trade.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
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.


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

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17. What does FIU do beyond what FIU does?

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18. Retail Banking
Typical mass-market banking where individual customers use local branches of larger commercial banks.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
Impose AML requirements on alternative remittance systems.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.


19. FATF Recommendation 8
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.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
2% - 5% ($590B - $1.5T)


20. Cash Letter
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.


21. Who issues the Internationa Narcotics Control Strategy Report (INCSR) and how often?
A market is which securities are bought and sold outside of establisehd securities markets.
Strengthen customer identification measures in iternational and domestic wire transfers.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
The US State Dept issues the report annually.


22. Why is it imperative to have a strong Know Your Employee program?
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
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.
Pouch activity.


23. A 'panzi' scheme is named for whom?
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
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.
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.
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.


24. Open System Stored Value Card
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
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 prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
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.


25. FATF Sepcial Recommendation on Terrorist Financing -- SR Eight
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
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.


26. What is the aim of Joint Money Laundering Steering Group? (UK)
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws


27. FATF Recommendation 17
The US State Dept issues the report annually.
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
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).
Competent authorities should have powers of subpoena - search and seizure.


28. What is the Serious Organised Crime Agency (SOCA)?
Provide mutual legal assistance.
The FIU of the UK
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.
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.


29. Dematerialization of Securities

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30. Agent (Insurance Industry)
Countering the Financing of Terrorism (Counter Terrorist Financing).
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
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.


31. In what country is the Egmont Group Secretariat now located?
Solicits potential customers and issues the credit cards.
Canada
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
Penny Stocks


32. A notary can issue a Apostille but it must be in a country that signed The Hague Convention (1961) and it must ___________. If the notary doesn't understand - find another one.

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33. 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.
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.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
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.


34. FATF Recommendation 26
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
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.
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.


35. FCPA (US)
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
Foreign Corrupt Practices Act
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.


36. GIABA
a Sr Management level
Intergovernmental Action Group against Money Laundering in Africa
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.
a chain-referral scheme.


37. FATF Recommendation 16
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.
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.
Terrorism and Terrorist Financing
An account that does not show activity other than the posting of interest or account maintenance fees.


38. Automated Sale
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
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.
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
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.


39. FATF Recommendation 28
have in place compulsory currency reporting requirements.
Competent authorities should have powers of subpoena - search and seizure.
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).
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.


40. Scheme
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
Expatriates sending money back to their home country or by other individuals sending money abroad.
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.
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.


41. Who appear to be predominant users of hawalas and other alternative remittance systems?
As a financial institution service that is very vulnerable to money laundering.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
Expatriates sending money back to their home country or by other individuals sending money abroad.


42. FATF Recommendation 20
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
An electronic quotation system that displays quotes of many securities traded over the counter.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
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]


43. What are included in the Wolfsberg AML Principles on Private Banking?
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.
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.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.


44. Why is a 'money order' attractive to a money launderer?
Take immediate steps to ratify and implement the UN instruments.
Terrorism and Terrorist Financing
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].


45. Dormant Account
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.
Provide mutual legal assistance.
An account that does not show activity other than the posting of interest or account maintenance fees.
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.


46. The Vienns Convention
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
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.
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.


47. Free Look Period
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
Strengthen customer identification measures in iternational and domestic wire transfers.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.


48. Guaranteed Introducing Broker

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49. What the primary objectives of Offshore Group of Banking Supervisors?
Freeze and confiscate terrorist assets.
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.
disrupt or adversely afftect the business of the bank.
An electronic quotation system that displays quotes of many securities traded over the counter.


50. What do boiler room salespeople typically sell?
Stored Value Cards - Mobile Payments - Internet Payments.
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
Penny Stocks
Pouch activity.