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. Market Manipulation
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
a Sr Management level
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
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.


2. Wholesale Banking
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
Banking services between merchant banks and other financial institutions.
disrupt or adversely afftect the business of the bank.
Provide mutual legal assistance.


3. Variable Annuity
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
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.
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
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.


4. Basel's 'CDD for Banks' states that the decision to open an account for a PEP should be taken at...
A US Federal Court
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.
Financial Action Task Force
a Sr Management level


5. Dormant Account
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 UN Convention against Transnational Organized Crime [Adopted 12/2000].
An account that does not show activity other than the posting of interest or account maintenance fees.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.


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.
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
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.
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. Cash Equivalent

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8. FATF Sepcial Recommendation on Terrorist Financing -- SR Six
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.
Impose AML requirements on alternative remittance systems.
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.
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.


9. FATF Recommendation 8
Banking services between merchant banks and other financial institutions.
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
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.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.


10. Who appoints a 'Federal Receiver' (US)?
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 US Federal Court
foreign correspondent banks
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.


11. Why is 'Know Your Customer's Customer' important?
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
No.


12. How are 'Predicate Crimes' sometimes identified?

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13. FATF Recommendation 24
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.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
The opposing part of a transaction or trade.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.


14. Credit Card Associations
They can accrue value as the price of the underlying stock rises.
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
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.


15. FATF Recommendation 6
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
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.
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.


16. 'Commission Rogatoire' known in English as?
Letters Rogatory
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].


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

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18. FATF Recommendation 40
that appear to be linked
Money Laundering and Tax Evasion
disrupt or adversely afftect the business of the bank.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.


19. Operational risks in KYC context relate to...
Report suspicious transactions linked to terrorism.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
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.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.


20. What is the aim of Joint Money Laundering Steering Group? (UK)
As 'felonies' or 'all offenses in the criminal code'.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
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.


21. Convertible Preferred
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
Banking services between merchant banks and other financial institutions.
Solicits potential customers and issues the credit cards.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.


22. Counter Party
Harmful or Preferrential Tax Regimes.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
The opposing part of a transaction or trade.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.


23. FATF Recommendation 29
An account that does not show activity other than the posting of interest or account maintenance fees.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
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.
A US Federal Court


24. Cash Letter
As a financial institution service that is very vulnerable to money laundering.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.


25. The IMF estimates that laundered funds compromise ______ of the world's GDP
2% - 5% ($590B - $1.5T)
Competent authorities should have powers of subpoena - search and seizure.
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.
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.


26. How is 'Identity theft' often accomplished?
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.
a chain-referral scheme.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.


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

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28. Abusive Squeezes

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29. Legal Arrangements (Insurance Industry)
As 'felonies' or 'all offenses in the criminal code'.
Reliable - independent source of documents - data or information.
foreign correspondent banks
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]


30. Why is a 'money order' attractive to a money launderer?
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.
Person who - for compensation - provides advice on securities and investments and manages client assets.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.


31. FATF Recommendation 30
If provided for money laundering to be an internationally extraditable offense.
Processes transactions for merchants who accept credit cards.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.


32. Characteristics of an 'Open System Stored Value Card'
People who help move the billions of dollars drug traffickers earn around the world.
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.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
foreign correspondent banks


33. Why is 'Know Your Correspondent Bank' important?
As a key tool in detecting suspicious or money laundering activity - it is important because correspondent accounts are often used as conduits to launder criminal proceeds in international settings.
They can accrue value as the price of the underlying stock rises.
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.
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.


34. White-Collar crime

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35. Penny Stocks
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.
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.
Financial Action Task Force
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.


36. FATF Recommendation 4
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
Take immediate steps to ratify and implement the UN instruments.
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.


37. Respondent Bank

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38. What does the 'SEC' (US Securities and Exchange Commission) do?
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).
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).
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
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.


39. FATF Recommendations examples of non-financial businesses and professions
The FIU of Russia
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
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.
Harmful or Preferrential Tax Regimes.


40. Vital Service Providers (VSPs)
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.
People who help move the billions of dollars drug traffickers earn around the world.
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
Freeze and confiscate terrorist assets.


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

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42. Agent (Insurance Industry)
Direct or indirect advisor on buying and selling futures or commodity options.
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
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
Provide mutual legal assistance.


43. Convertible Bond
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.
Processes transactions for merchants who accept credit cards.
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.
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.


44. FATF Sepcial Recommendation on Terrorist Financing -- SR Eight
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.
An electronic quotation system that displays quotes of many securities traded over the counter.


45. What is the Federal Service for Financial Monitoring?
No.
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
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.
The FIU of Russia


46. Money Mules
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
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.
As 'felonies' or 'all offenses in the criminal code'.
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.


47. 'Competent Authorities' refers to _____.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.


48. 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?
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
Review customer files and conduct random sampling of accounts.
Provide mutual legal assistance.
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.


49. What is meant by 'Know Your Customer's customer'?
As 'felonies' or 'all offenses in the criminal code'.
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.
As a key tool in detecting suspicious or money laundering activity - it is important because correspondent accounts are often used as conduits to launder criminal proceeds in international settings.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.


50. 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.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.