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)
Impose AML requirements on alternative remittance systems.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
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


2. Cash Log

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3. What is the primary use of a 'Mutual Legal Assistance Treaty'?
It conducts investigations in support of a government's confiscation or seizure efforts.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.


4. FATF Recommendation 31
Letters Rogatory
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).


5. The Vienns Convention
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
Combines funds from various members and users them to trade in futures or options contracts.
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 CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.


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

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7. How are 'Predicate Crimes' sometimes identified?

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8. SRO (Self-Regulatory Organizations)
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.
Review customer files and conduct random sampling of accounts.
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'
The FIU of Russia


9. Foriegn Shell Banks are vehicles for ______ & ______?
Money Laundering and Tax Evasion
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
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.
Terrorism and Terrorist Financing


10. FATF Recommendation 32
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
Countering the Financing of Terrorism (Counter Terrorist Financing).
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization


11. What can result from on institution's disregard for the Basel Due Diligence Principle?
EurAsian Group
tipped off that they are being investigated.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
Firm or person that solicits and accepts commodity futures orders from customers but does not accept funds. Two types of IB_C's: Guaranteed and Independent.


12. What is the Serious Organised Crime Agency (SOCA)?
that appear to be linked
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
The FIU of the UK
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.


13. OCC Office of the Comptroller of the Currency
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.
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.
Expatriates sending money back to their home country or by other individuals sending money abroad.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.


14. What is the goal of FSAP?
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
Futures contracts - forwards - swaps or options.


15. FATF Recommendation 24
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.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
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.
Impose AML requirements on alternative remittance systems.


16. What do 'Hedge Funds' attempt to do?
Firm or person that solicits and accepts commodity futures orders from customers but does not accept funds. Two types of IB_C's: Guaranteed and Independent.
Foreign Corrupt Practices Act
Money Laundering and Tax Evasion
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.


17. Commodity Pool
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.
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.
Combines funds from various members and users them to trade in futures or options contracts.
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).


18. The IMF estimates that laundered funds compromise ______ of the world's GDP
2% - 5% ($590B - $1.5T)
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.


19. Many jurisdictions have legislation to ensure that suspects are not ____?
Terrorism and Terrorist Financing
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.
tipped off that they are being investigated.
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.


20. Why do convertible bonds oftern have lower interest rates than non-convertible bonds?
No.
They can accrue value as the price of the underlying stock rises.
Financial Action Task Force on Money Laundering in South America
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.


21. FATF Recommendation 38
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.
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.
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.
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


22. 'Kiting' via credit card
Terrorism and Terrorist Financing
EurAsian Group
The FIU of the UK
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.


23. FATF's designated transactional threshold for Financial Insitutions is _____.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
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).
The FIU of the UK
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.


24. Open System Stored Value Card
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Person who - for compensation - provides advice on securities and investments and manages client assets.
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.


25. How does the Egmont group help its members?
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
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.
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
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.


26. FATF Recommendation 33
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
Direct or indirect advisor on buying and selling futures or commodity options.


27. A 'panzi' scheme is named for whom?
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 prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
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.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.


28. FATF Recommendation 8
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
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 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]


29. A public perception that a bank is not able to manage its operational risk effectively can...
The International Monetary Fund (IMF) and the world bank conduct the joint program.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
Impose AML requirements on alternative remittance systems.
disrupt or adversely afftect the business of the bank.


30. Why is it imperative to have a strong Know Your Employee program?
People who help move the billions of dollars drug traffickers earn around the world.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.


31. Commodity
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
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.
Take immediate steps to ratify and implement the UN instruments.


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

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33. What does the principal US money laundering law look for before implementing its 'Extraterritorial Reach'?
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
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'
Stored Value Cards - Mobile Payments - Internet Payments.
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.


34. (Credit card) Acquiring Bank
The FIU of the UK
Processes transactions for merchants who accept credit cards.
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
Report suspicious transactions linked to terrorism.


35. UK courts view on 'Suspicion'
no regulatory power or function
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
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.
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.


36. FATF Recommendation 7

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37. Cash Letter
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.
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
The UN Convention against Transnational Organized Crime [Adopted 12/2000].


38. GIABA
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.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
If provided for money laundering to be an internationally extraditable offense.
Intergovernmental Action Group against Money Laundering in Africa


39. What is meant by 'Know Your Customer's customer'?
Confiscation
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
Competent authorities should have powers of subpoena - search and seizure.


40. Free Look Period
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
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.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.


41. Why is 'refining' critical to a money launderer's efforts?
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.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.


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

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43. Express Trust
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
A written statement given under oath before an officer of the court - notary public - or other authorized person. Commonly used as the factual basis for an application for a search - arrest or seizure warrant.
Financial institutions should pay special attention to (and examine & document) complex - unusual large transactions - and all transactions which have no apparent economic or lawful purpose.


44. When was the Offshore Group of Banking Supervisors established? What was the impetus behind its establishment?
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).
Expatriates sending money back to their home country or by other individuals sending money abroad.
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).


45. Transparency International
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
Canada


46. When is a jurisdiction considered to be 'ring-fenced'?
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
Canada


47. According to FATF - financial transactions above a designated threshold may include situations where the transaction takes place in a single operation or in several operations...
that appear to be linked
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.
No.
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.


48. Investment Adviser
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Harmful or Preferrential Tax Regimes.
Person who - for compensation - provides advice on securities and investments and manages client assets.


49. FATF Recommendation 14
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
Processes transactions for merchants who accept credit cards.


50. What is private investment company also known as?
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
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.
foreign correspondent banks
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.