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. FATF Recommendation 9
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 take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
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.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.


2. (Credit Card) Issuing Bank
that appear to be linked
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.
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.
Solicits potential customers and issues the credit cards.


3. Why is a 'money order' attractive to a money launderer?
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
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.
Solicits potential customers and issues the credit cards.


4. Abusive Squeezes

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5. FATF Recommendation 5
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
Review customer files and conduct random sampling of accounts.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
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.


6. Derivatives
The US State Dept issues the report annually.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
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.


7. 'Introducing Broker-Dealers in Commodities' (IB-C)

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8. USA Patriot Act Section 312 'Offshore Bank'
The opposing part of a transaction or trade.
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.
Intergovernmental Action Group against Money Laundering in Africa
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.


9. Guaranteed Introducing Broker

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10. FATF Recommendation 15
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 US Federal 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.


11. 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.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.


12. In what country is the Egmont Group Secretariat now located?
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.
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).
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.


13. What are some of the AML dangers of casino junkets?
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
It was the first law in any country to make money laundering a crime.
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.
Provide mutual legal assistance.


14. EAG
EurAsian Group
Foreign Corrupt Practices 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.
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data


15. GAFISUD
Financial Action Task Force on Money Laundering in South America
Intergovernmental Action Group against Money Laundering in Africa
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.


16. FATF Recommendation 19
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
have in place compulsory currency reporting requirements.
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.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.


17. FATF Recommendation 20
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.


18. Cash Log

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19. FATF Recommendation 10
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.


20. FATF Sepcial Recommendation on Terrorist Financing -- SR Seven
It was the first law in any country to make money laundering a crime.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
Strengthen customer identification measures in iternational and domestic wire transfers.


21. What do boiler room salespeople typically do?

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22. What is a Private Investment company (PIC)?
They can accrue value as the price of the underlying stock rises.
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.
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.


23. What is meant by 'Know Your Customer's customer'?
Harmful or Preferrential Tax Regimes.
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
Intergovernmental Action Group against Money Laundering in Africa
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.


24. FATF Recommendation 30
Pouch activity.
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.
A market is which securities are bought and sold outside of establisehd securities markets.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.


25. 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 arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
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.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)


26. Why is understanding 'Product Diversion' important to the AML investigator?
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
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.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
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.


27. What is the Serious Organised Crime Agency (SOCA)?
The FIU of the UK
that appear to be linked
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
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.


28. The 'Art Loss Register'

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29. FATF Sepcial Recommendation on Terrorist Financing -- SR One
The FIU of Russia
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
Take immediate steps to ratify and implement the UN instruments.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.


30. Nostro

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31. FATF Recommendation 38
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
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.
It one wants to open a bank account overseas - but do it through the mail - the bank may need to be assured that the copy of the passport is correct. The Apostille mark can assure this.
Financial institutions may rely upon intermediaries to perform certain CDD elements provided the intermediary is supervised and regulated. However - ultimate responsibility remains with the financial institution.


32. Three stages of money laundering
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
Placement - Layering - Integration.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism


33. Common types of 'Derivatives'
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.
Futures contracts - forwards - swaps or options.
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.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)


34. Dormant Account
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
An account that does not show activity other than the posting of interest or account maintenance fees.
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.
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.


35. FATF Recommendation 34
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 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.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
Stored Value Cards - Mobile Payments - Internet Payments.


36. Downstream Correspondent Clearer
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 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.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
Person who - for compensation - provides advice on securities and investments and manages client assets.


37. Dematerialization of Securities

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38. Convertible Preferred
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.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.


39. How do most governments view Private Banking?
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).
As a financial institution service that is very vulnerable to money laundering.
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.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.


40. FATF Sepcial Recommendation on Terrorist Financing -- SR Nine
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
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]


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

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42. Automated Sale
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
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.
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.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism


43. Penny Stocks
Futures contracts - forwards - swaps or options.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
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]
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.


44. FATF Recommendation 33
If provided for money laundering to be an internationally extraditable offense.
Typical mass-market banking where individual customers use local branches of larger commercial banks.
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.


45. FATF Recommendation 35
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
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.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.


46. FATF Recommendation 21
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
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.
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.


47. What is the goal of the Egmont group?

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48. What must a financial institution do if they have 'Exempt Accounts'?
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
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.
Countering the Financing of Terrorism (Counter Terrorist Financing).
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.


49. FATF Recommendation 16
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.
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.
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
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.


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

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