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. MENAFATF
Middle East and North Africa Financial Action Task Force
It was the first law in any country to make money laundering a crime.
As a financial institution service that is very vulnerable to money laundering.
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.


2. FATF Sepcial Recommendation on Terrorist Financing -- SR Three
Freeze and confiscate terrorist assets.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.


3. How is 'Legal Risk' defined by the 2001 Basel Due Diligence Principles?
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.
Financial Action Task Force on Money Laundering in South America
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.


4. FATF Recommendation 19
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.
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.


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

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6. FATF Recommendation 7

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7. How does the Egmont group help its members?
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.
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
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.
Review customer files and conduct random sampling of accounts.


8. Portfolio Manager
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.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
As 'felonies' or 'all offenses in the criminal code'.
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.


9. What does an Extradition Treaty specify?
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.
No.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.


10. Why does a launderer try to run transactions through a concentration account of a financial institution?
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
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]


11. OTC markets Over-The-Counter
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
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]
Combines funds from various members and users them to trade in futures or options contracts.
A market is which securities are bought and sold outside of establisehd securities markets.


12. FATF Sepcial Recommendation on Terrorist Financing -- SR Seven
Strengthen customer identification measures in iternational and domestic wire transfers.
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
It was the first law in any country to make money laundering a crime.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.


13. The IMF estimates that laundered funds compromise ______ of the world's GDP
It was the first law in any country to make money laundering a crime.
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
Canada
2% - 5% ($590B - $1.5T)


14. FATF Recommendation 35
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
Expatriates sending money back to their home country or by other individuals sending money abroad.
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
Freeze and confiscate terrorist assets.


15. What is the Federal Service for Financial Monitoring?
have in place compulsory currency reporting requirements.
Stored Value Cards - Mobile Payments - Internet Payments.
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.
The FIU of Russia


16. Derivatives
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
Money Laundering and Tax Evasion
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.


17. What does FIU do beyond what FIU does?

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18. What can result from on institution's disregard for the Basel Due Diligence Principle?
Canada
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
Futures contracts - forwards - swaps or options.


19. FATF Recommendation 6
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
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'
Financial Action Task Force on Money Laundering in South America


20. FATF's designated transactional threshold for Financial Insitutions is _____.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
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.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.


21. SRO (Self-Regulatory Organizations)
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
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.


22. Commodity Trading Advisor
An account that does not show activity other than the posting of interest or account maintenance fees.
No.
Direct or indirect advisor on buying and selling futures or commodity options.
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.


23. What are the three main functions of a 'Transfer Agent'?
Issue and cancel securities certificates to reflect chagnes in ownership - act as an intermediary for the issuing company - and hanlde lost - stolen or destroyed certificates.
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.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
As 'felonies' or 'all offenses in the criminal code'.


24. Common types of 'Derivatives'
To reduce financial crime - including money laundering and terrorit financing.
Foreign Corrupt Practices Act
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.
Futures contracts - forwards - swaps or options.


25. Cash Log

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26. FATF's designated transactional threshold for Delaers is Precious metals and / or Precious Stones is _____.
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
The US State Dept issues the report annually.
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).


27. Dormant Account
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
An account that does not show activity other than the posting of interest or account maintenance fees.


28. 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.
EurAsian Group
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 US Federal Court


29. FATF Recommendation 27
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
It conducts investigations in support of a government's confiscation or seizure efforts.
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.
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.


30. FATF Recommendation 5
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Freeze and confiscate terrorist assets.
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.
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.


31. Abusive Squeezes

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32. FATF Recommendation 2
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.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
The opposing part of a transaction or trade.
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]


33. What was the target of UN Security Council Resolution 1267?
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.
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.


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

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35. Why is it imperative to have a strong Know Your Employee program?
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
bear the mark 'APOSTILLE'
foreign correspondent banks
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.


36. FATF Recommendation 30
Futures contracts - forwards - swaps or options.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
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.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.


37. Investment Adviser
Person who - for compensation - provides advice on securities and investments and manages client assets.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
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.
The FIU of Russia


38. What is the Serious Organised Crime Agency (SOCA)?
Take immediate steps to ratify and implement the UN instruments.
A co-operative property seller agrees to sell home at a well-below market reported price - then accepts the difference 'under the table'. When launderer later sells house - he recognizes 'gain' and all funds appear legitimate as it sold at market.
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.
The FIU of the UK


39. Mutual Fund
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.


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

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41. Basel's 'CDD for Banks' states that the decision to open an account for a PEP should be taken at...
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
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.
a Sr Management level
Processes transactions for merchants who accept credit cards.


42. CFT
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
Countering the Financing of Terrorism (Counter Terrorist Financing).
Countries should recognize money laundering as an extraditable offense.
foreign correspondent banks


43. Express Trust
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
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'.


44. When is a jurisdiction considered to be 'ring-fenced'?
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.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.


45. Commodity Pool
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
Expatriates sending money back to their home country or by other individuals sending money abroad.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
Combines funds from various members and users them to trade in futures or options contracts.


46. FATF Recommendation 20
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
An electronic quotation system that displays quotes of many securities traded over the counter.


47. Guaranteed Introducing Broker

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48. FATF Recommendation 34
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.
Provide mutual legal assistance.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
Strengthen customer identification measures in iternational and domestic wire transfers.


49. Free Look Period
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.
Impose AML requirements on alternative remittance systems.
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism


50. A 'panzi' scheme is named for whom?
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
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.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.