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. Downstream Correspondent Clearer
It conducts investigations in support of a government's confiscation or seizure efforts.
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
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.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.


2. Basel committee's 'Customer Due Diligence for Banks' when verifying a unit's compliance with KYC policies and procedures - the home country supervisors or auditors should do what?
To reduce financial crime - including money laundering and terrorit financing.
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
Review customer files and conduct random sampling of accounts.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.


3. What is private investment company also known as?
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.
Type of foreign bank that is incorporated in the host country but is considered to be owned by a foreign parent bank. It only needs to operarted under the host country's regulations.
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.
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.


4. How does the Egmont group help its members?
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.
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.
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.


5. Affidavit
The US State Dept issues the report annually.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
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.
tipped off that they are being investigated.


6. GIABA
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
Typical mass-market banking where individual customers use local branches of larger commercial banks.
Intergovernmental Action Group against Money Laundering in Africa
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.


7. Commodity Pool Operator
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
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 corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.


8. FATF Sepcial Recommendation on Terrorist Financing -- SR Seven
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
If provided for money laundering to be an internationally extraditable offense.
It conducts investigations in support of a government's confiscation or seizure efforts.
Strengthen customer identification measures in iternational and domestic wire transfers.


9. FATF Recommendation 30
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
foreign correspondent banks
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.


10. What is the goal of FSAP?
People who help move the billions of dollars drug traffickers earn around the world.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
The International Monetary Fund (IMF) and the world bank conduct the joint program.
Provide mutual legal assistance.


11. What does the principal US money laundering law look for before implementing its 'Extraterritorial Reach'?
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
A professional responsible for the securities portfolio of an individual or institutional investor. In return for a fee - the manager has the responsibility of choosing and managing assets.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
Transportation/transfer of funds (even clean) to/from the US - if done to promote unlawful activity - or with knowledge that the funds are illicit - or to conceal/disguise the nature - location - source - ownership - etc. of funds - or to avoid feder


12. Foriegn Shell Banks are vehicles for ______ & ______?
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
Money Laundering and Tax Evasion
Type of foreign bank that is incorporated in the host country but is considered to be owned by a foreign parent bank. It only needs to operarted under the host country's regulations.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.


13. Agent (Insurance Industry)
An electronic quotation system that displays quotes of many securities traded over the counter.
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
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
Type of foreign bank that is incorporated in the host country but is considered to be owned by a foreign parent bank. It only needs to operarted under the host country's regulations.


14. Who conducts the Financial Sector Assessment Program (FSAP)?
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.
The International Monetary Fund (IMF) and the world bank conduct the joint program.
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.


15. A 'Cash Letter' can also be referred to as _____.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
Take immediate steps to ratify and implement the UN instruments.
Pouch activity.
Often co-branded by financial institution; may have VISA or MasterCard logos; can be reloadable; usually can access ATMs for withdrawls globally; non-customers can buy them.


16. What do boiler room salespeople typically sell?
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
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.
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
Penny Stocks


17. Moneyval
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.
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
bear the mark 'APOSTILLE'
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism


18. What are included in the Wolfsberg AML Principles on Private Banking?
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.
Pouch activity.
Stored Value Cards - Mobile Payments - Internet Payments.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.


19. Wholesale Banking
Banking services between merchant banks and other financial institutions.
Impose AML requirements on alternative remittance systems.
The FIU of the UK
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


20. Who issues the Internationa Narcotics Control Strategy Report (INCSR) and how often?
The US State Dept issues the report annually.
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
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.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.


21. Investment Adviser
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.
Person who - for compensation - provides advice on securities and investments and manages client assets.
Financial Action Task Force on Money Laundering in South America
Open and Closed system


22. Derivatives
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.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
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.
As 'felonies' or 'all offenses in the criminal code'.


23. Legal Arrangements (Insurance Industry)
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.
Financial Action Task Force on Money Laundering in South America
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.
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]


24. FATF Recommendation 13
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
EurAsian Group
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.


25. FATF Recommendation 31
a chain-referral scheme.
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.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
Countries should not allow shell banks. Financial institutions should not have correspondent banking relationships with shell banks or banks that allow shell banks to do business through their accounts.


26. Investigative Log
It conducts investigations in support of a government's confiscation or seizure efforts.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.


27. How is 'Legal Risk' defined by the 2001 Basel Due Diligence Principles?
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.
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
Confiscation


28. According to FATF - financial transactions above a designated threshold may include situations where the transaction takes place in a single operation or in several operations...
that appear to be linked
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
Impose AML requirements on alternative remittance systems.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)


29. Automated Sale
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
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.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.


30. Money Mules
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
Pouch activity.
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.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.


31. Examples of White-collar crime
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.
Provide mutual legal assistance.
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.


32. Examples of VSP's
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
Reliable - independent source of documents - data or information.


33. FATF Recommendation 20
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
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.
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.
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.


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

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35. CFT
foreign correspondent banks
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.
Countering the Financing of Terrorism (Counter Terrorist Financing).
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.


36. What do boiler room salespeople typically do?

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37. FATF Recommendation 22

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38. FATF Recommendation 18
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.
Countries should not allow shell banks. Financial institutions should not have correspondent banking relationships with shell banks or banks that allow shell banks to do business through their accounts.
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.


39. FATF Recommendation 11
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
An electronic quotation system that displays quotes of many securities traded over the counter.
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.
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.


40. Cash Equivalent

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41. Why is a 'money order' attractive to a money launderer?
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.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
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.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.


42. Scheme
Type of foreign bank that is incorporated in the host country but is considered to be owned by a foreign parent bank. It only needs to operarted under the host country's regulations.
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'
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.
As a financial institution service that is very vulnerable to money laundering.


43. What does FIU do beyond what FIU does?

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44. FATF Recommendation 40
Strengthen customer identification measures in iternational and domestic wire transfers.
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
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.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.


45. What can result from on institution's disregard for the Basel Due Diligence Principle?
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'.
Financial Action Task Force on Money Laundering in South America
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.


46. EAG
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
EurAsian Group
have in place compulsory currency reporting requirements.


47. FATF Recommendation 9
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
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.
Combines funds from various members and users them to trade in futures or options contracts.


48. FATF Sepcial Recommendation on Terrorist Financing -- SR Eight
Provide mutual legal assistance.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.


49. How do most governments view Private Banking?
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
Transportation/transfer of funds (even clean) to/from the US - if done to promote unlawful activity - or with knowledge that the funds are illicit - or to conceal/disguise the nature - location - source - ownership - etc. of funds - or to avoid feder
As a financial institution service that is very vulnerable to money laundering.


50. Fraud
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
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.
Combines funds from various members and users them to trade in futures or options contracts.