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. GIABA
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
Futures contracts - forwards - swaps or options.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
Intergovernmental Action Group against Money Laundering in Africa


2. 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.
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.
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.
It conducts investigations in support of a government's confiscation or seizure efforts.


3. (Credit card) Acquiring Bank
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
Processes transactions for merchants who accept credit cards.


4. Automated Sale
Strengthen customer identification measures in iternational and domestic wire transfers.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
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.


5. Market Manipulation
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
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.
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.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.


6. FATF Recommendation 19
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
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.


7. FATF's designated transactional threshold for Delaers is Precious metals and / or Precious Stones is _____.
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.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
As a financial institution service that is very vulnerable to money laundering.
Person who - for compensation - provides advice on securities and investments and manages client assets.


8. FATF Recommendation 1
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
Competent authorities should have powers of subpoena - search and seizure.
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.
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.


9. FATF's designated transactional threshold for Financial Insitutions is _____.
Strengthen customer identification measures in iternational and domestic wire transfers.
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
Countering the Financing of Terrorism (Counter Terrorist Financing).
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)


10. When is a jurisdiction considered to be 'ring-fenced'?
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
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).


11. FATF Sepcial Recommendation on Terrorist Financing -- SR Nine
Competent authorities should have powers of subpoena - search and seizure.
It was the first law in any country to make money laundering a crime.
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.


12. What is the primary use of a 'Mutual Legal Assistance Treaty'?
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
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.


13. FATF Recommendation 24
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.
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.


14. Underwriting
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.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
The opposing part of a transaction or trade.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.


15. A pyramid scheme is also called...
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.
EurAsian Group
To reduce financial crime - including money laundering and terrorit financing.
a chain-referral scheme.


16. What is private investment company also known as?
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
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]
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.


17. FATF Sepcial Recommendation on Terrorist Financing -- SR Seven
Strengthen customer identification measures in iternational and domestic wire transfers.
Person who - for compensation - provides advice on securities and investments and manages client assets.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.


18. Under the US Bank Secrecy Act - SAR filings are confidential and the institutions employees cannot ____?

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19. Open System Stored Value Card
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)


20. FATF Recommendation 36
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
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.
Provide mutual legal assistance.


21. Apostille

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22. FATF Recommendation 37
Letters Rogatory
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
Penny Stocks
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.


23. What does the principal US money laundering law look for before implementing its 'Extraterritorial Reach'?
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.
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.
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


24. Nostro

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25. Free Look Period
An account that does not show activity other than the posting of interest or account maintenance fees.
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
Open and Closed system
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.


26. FATF Recommendation 31
a chain-referral scheme.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
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.
Futures contracts - forwards - swaps or options.


27. What was the target of UN Security Council Resolution 1373?
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
Direct or indirect advisor on buying and selling futures or commodity options.
Terrorism and Terrorist Financing
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).


28. Why is it imperative to have a strong Know Your Employee program?
EurAsian Group
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.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)


29. Agent (Insurance Industry)
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]
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
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
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.


30. FATF Recommendation 22

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31. FATF Recommendation 8
Canada
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
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. What are included in the Wolfsberg AML Principles on Private Banking?
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.
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.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
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.


33. What normal business practise makes 'Product Division' possible?
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
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).
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.


34. Affidavit
no regulatory power or function
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.
Harmful or Preferrential Tax Regimes.
Combines funds from various members and users them to trade in futures or options contracts.


35. Behaviour detection

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36. US law prohibhits Foriegn Shell Banks from ____?
Terrorism and Terrorist Financing
Freeze and confiscate terrorist assets.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)


37. Operational risks in KYC context relate to...
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'
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
Typical mass-market banking where individual customers use local branches of larger commercial banks.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.


38. How does the Egmont group help its members?
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].
bear the mark 'APOSTILLE'
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.
2% - 5% ($590B - $1.5T)


39. What does an Extradition Treaty specify?
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].


40. 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.
Money Laundering and Tax Evasion
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.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.


41. Convertible Bond
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
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.
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.
disrupt or adversely afftect the business of the bank.


42. How do most governments view Private Banking?
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
As a financial institution service that is very vulnerable to money laundering.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
Countries should recognize money laundering as an extraditable offense.


43. What is the significance of 'Non-Financial Trades and Businesses' in realtion to Money Laundering?
Financial Action Task Force
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
Absolutely NOT. If the decision is based purely on profile - then you are discriminating. you need to file such reports on the ACTIVITY especially if it differs from the 'normal and expected' as reflected in the customer profile.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.


44. FATF Recommendation 26
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
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 contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.


45. Dematerialization of Securities

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46. Wire Transfers
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
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.


47. How do 'Hedge Funds' operate?

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48. FATF Recommendation 38
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.
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.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.


49. FCPA (US)
Banking services between merchant banks and other financial institutions.
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 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.
Foreign Corrupt Practices Act


50. Who appoints a 'Federal Receiver' (US)?
A US Federal Court
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
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 fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.