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. Agent (Insurance Industry)
Report suspicious transactions linked to terrorism.
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
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
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.


2. What is important about the US Money Laundering Control Act (MCLA)?
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
It was the first law in any country to make money laundering a crime.


3. Cash Equivalent

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4. Why is a 'money order' attractive to a money launderer?
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.


5. FATF Recommendation 33
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
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.
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.


6. What was the effect of the 1988 Vienna Convention as it relates to extradtition?
If provided for money laundering to be an internationally extraditable offense.
Combines funds from various members and users them to trade in futures or options contracts.
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
It conducts investigations in support of a government's confiscation or seizure efforts.


7. 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.
Countering the Financing of Terrorism (Counter Terrorist Financing).
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.


8. Corporate Bank

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9. What tend to be the markings of Private Banking transactions?
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
People who help move the billions of dollars drug traffickers earn around the world.
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.


10. FATF Sepcial Recommendation on Terrorist Financing -- SR Nine
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
The US State Dept issues the report annually.


11. Pink Sheets
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
An electronic quotation system that displays quotes of many securities traded over the counter.
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]
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.


12. OTC markets Over-The-Counter
Pouch activity.
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
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
A market is which securities are bought and sold outside of establisehd securities markets.


13. FATF Sepcial Recommendation on Terrorist Financing -- SR One
www.artloss.com
The US State Dept issues the report annually.
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 immediate steps to ratify and implement the UN instruments.


14. What does FIU do beyond what FIU does?

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15. Futures Commission Merchant (FCM)
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
tipped off that they are being investigated.
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.


16. Common types of 'Derivatives'
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.
a chain-referral scheme.
Futures contracts - forwards - swaps or options.


17. Who conducts the Financial Sector Assessment Program (FSAP)?
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
The International Monetary Fund (IMF) and the world bank conduct the joint program.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
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.


18. FATF Recommendation 1
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.
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.


19. What is one of the cental stragetic tools required for effective action against money laundering?
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.
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]
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
Confiscation


20. What does a 'Commission Rogatoire' normally specify?
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
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.
Court order directing a law enforcement officer to seize and detain a particular person and require them to provide an answer to a compliant or otherqise appear in court.
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.


21. Free Look Period
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
Stored Value Cards - Mobile Payments - Internet Payments.
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.


22. Three stages of money laundering
Direct money of Criminal A is sent to foreign bank account of company B. Investment company C is formed as A's country. A is appointed as director of C. C borrows money from B and buys building which is rented to 3rd parties. with rent - C pays off B
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.
Placement - Layering - Integration.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).


23. FATF Recommendation 31
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
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.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.


24. Nostro

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

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26. Downstream Correspondent Clearer
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
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.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
As 'felonies' or 'all offenses in the criminal code'.


27. FATF Recommendation 28
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
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.
Competent authorities should have powers of subpoena - search and seizure.
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'.


28. Counter Party
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
The opposing part of a transaction or trade.
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism


29. FATF's designated transactional threshold for Delaers is Precious metals and / or Precious Stones is _____.
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.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
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.
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.


30. Structuring is a common technique in jurisdictions that...
have in place compulsory currency reporting requirements.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
Futures contracts - forwards - swaps or options.


31. What does Financial Sector AssessmentProgram (FSAP) do?
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
no regulatory power or function
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.


32. UK courts view on 'Suspicion'
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.
Review customer files and conduct random sampling of accounts.
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
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.


33. Why is 'Know Your Customer's Customer' important?
foreign correspondent banks
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.


34. FATF Recommendation 15
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.
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.


35. What does theInternationa Narcotics Control Strategy Report (INCSR) entail?
The US State Dept issues the report annually.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
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.
foreign correspondent banks


36. Convertible Preferred
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.
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.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.


37. Open System Stored Value Card
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
Provide mutual legal assistance.
The US State Dept issues the report annually.
Funds transfers - Shell Corporations - Contractual Transactions.


38. Variable Annuity
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.
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.
www.artloss.com
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.


39. What the primary objectives of Offshore Group of Banking Supervisors?
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.
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.


40. FATF Recommendation 18
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.
Banking services between merchant banks and other financial institutions.
An account that does not show activity other than the posting of interest or account maintenance fees.
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.


41. 'Coucil of Europe Convention on Laundering - Search - Seizure and Confiscation of the Proceeds from Crime' is known for what?
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
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).


42. How is 'Legal Risk' defined by the 2001 Basel Due Diligence Principles?
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
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.
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.


43. What is the primary use of a 'Mutual Legal Assistance Treaty'?
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.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
Stored Value Cards - Mobile Payments - Internet Payments.


44. What normal business practise makes 'Product Division' possible?
Terrorism and Terrorist Financing
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.


45. The USA Patriot Act enacted a number of statutory provisions that bear directly on the procedures US financial institutions must follow in connection with their...
foreign correspondent banks
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
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.


46. Respondent Bank

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47. Dematerialization of Securities

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48. 'Commission Rogatoire' known in English as?
that appear to be linked
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Letters Rogatory


49. FATF Recommendation 9
Open and Closed system
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.
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.


50. Example of use of an Apostille
Harmful or Preferrential Tax Regimes.
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.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.