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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. Counter Party
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 US Federal Court
It conducts investigations in support of a government's confiscation or seizure efforts.
The opposing part of a transaction or trade.

2. CFT
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
An electronic quotation system that displays quotes of many securities traded over the counter.
Countering the Financing of Terrorism (Counter Terrorist Financing).

3. Cash Log

4. Operational risks in KYC context relate to...
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
FATF principles should apply to all branches and subsidiaries of a financial institution - even those abroad. Inability to do should re reported to parent institution's regulatory/supervisory authority.

5. What must a financial institution do if they have 'Exempt Accounts'?
To reduce financial crime - including money laundering and terrorit financing.
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
The FIU of Russia
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.

6. FATF's designated transactional threshold for Delaers is Precious metals and / or Precious Stones is _____.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
Terrorism and Terrorist Financing
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.

7. Derivatives
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].

8. FATF Sepcial Recommendation on Terrorist Financing -- SR Four
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
Placement - Layering - Integration.
Report suspicious transactions linked to terrorism.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.

9. FATF Recommendation 28
They can accrue value as the price of the underlying stock rises.
Funds transfers - Shell Corporations - Contractual Transactions.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
Competent authorities should have powers of subpoena - search and seizure.

10. What do 'Hedge Funds' attempt to do?
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
Person who - for compensation - provides advice on securities and investments and manages client assets.
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.

11. Wholesale Banking
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
Banking services between merchant banks and other financial institutions.
a Sr Management level
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.

12. A notary can issue a Apostille but it must be in a country that signed The Hague Convention (1961) and it must ___________. If the notary doesn't understand - find another one.

13. FATF Sepcial Recommendation on Terrorist Financing -- SR Two
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.

14. FATF Recommendation 12
EurAsian Group
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.

15. Mutual Fund
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.

16. FATF Recommendation 23
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.
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
The right - but not the obligation - to buy or sell a set amount of something - such as a share or commodity - at a set price after a set expiration date.

17. Pink Sheets
Product is purchsed with terms that it is going to foreign country A. While in transit - the product is diverted back to originating country or to another foreign market where the greatly discounted price provides for extreme profits.
FATF principles should apply to all branches and subsidiaries of a financial institution - even those abroad. Inability to do should re reported to parent institution's regulatory/supervisory authority.
a chain-referral scheme.
An electronic quotation system that displays quotes of many securities traded over the counter.

18. FATF Recommendation 1
It conducts investigations in support of a government's confiscation or seizure efforts.
They can accrue value as the price of the underlying stock rises.
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.

19. The Vienns Convention
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).
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
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.
www.artloss.com

20. 'Loan Back' method. Give example of how it works.

21. Who issues the Internationa Narcotics Control Strategy Report (INCSR) and how often?
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]
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 US State Dept issues the report annually.
Provide mutual legal assistance.

22. FATF Recommendation 4
The FIU of Russia
To reduce financial crime - including money laundering and terrorit financing.
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
Direct or indirect advisor on buying and selling futures or commodity options.

23. UK courts view on 'Suspicion'
disrupt or adversely afftect the business of the bank.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
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.

24. FATF Recommendation 15
To reduce financial crime - including money laundering and terrorit financing.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.

25. Who appear to be predominant users of hawalas and other alternative remittance systems?
Expatriates sending money back to their home country or by other individuals sending money abroad.
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
It was the first law in any country to make money laundering a crime.

26. Dematerialization of Securities

27. Boiler Room
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.
a Sr Management level
Foreign Corrupt Practices Act
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.

28. Common types of 'Derivatives'
The opposing part of a transaction or trade.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
Futures contracts - forwards - swaps or options.
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization

29. Why does a launderer try to run transactions through a concentration account of a financial institution?
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
disrupt or adversely afftect the business of the bank.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.

30. FATF Recommendation 14
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.

31. In Emerging Money Laundering Risks - what 3 areas are associated with 'Contractual Transactions'?
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
No.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
www.artloss.com

32. 'Closed-end Mutual Fund' (Or Comany)

33. GAFISUD
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
Reliable - independent source of documents - data or information.
Financial Action Task Force on Money Laundering in South America
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.

34. Moneyval
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.
The opposing part of a transaction or trade.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.

35. What does the 'SEC' (US Securities and Exchange Commission) do?
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.

36. FATF Recommendation 11
FATF principles should apply to all branches and subsidiaries of a financial institution - even those abroad. Inability to do should re reported to parent institution's regulatory/supervisory authority.
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.
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.
Countering the Financing of Terrorism (Counter Terrorist Financing).

37. Nostro

38. FATF Recommendation 19
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
The FIU of the UK
Review customer files and conduct random sampling of accounts.
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.

39. FATF Recommendation 16
tipped off that they are being investigated.
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 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.
Placement - Layering - Integration.

40. Arrest Warrant
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.
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.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
It was the first law in any country to make money laundering a crime.

41. Why is 'Know Your Correspondent Bank' important?
Provide mutual legal assistance.
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.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
The opposing part of a transaction or trade.

42. What does FIU do beyond what FIU does?

43. Who are the parties involved in a trust?
A market is which securities are bought and sold outside of establisehd securities markets.
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.
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.

44. What does the principal US money laundering law look for before implementing its 'Extraterritorial Reach'?
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.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
Provide mutual legal assistance.
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

45. A public perception that a bank is not able to manage its operational risk effectively can...
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
Money Laundering and Tax Evasion
disrupt or adversely afftect the business of the bank.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.

46. The Joint Money Laundering Steering Group (UK) has published a series of AML Guidance Notes for different sectors of the financial community. But - As a group of trade associations - it has...
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
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.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
no regulatory power or function

47. May a shell bank maintain a correspondent account with a US bank?
No.
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.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
Harmful or Preferrential Tax Regimes.

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

49. Wire Transfers
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization

50. FATF Recommendation 32
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
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.
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.
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.