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Certified Anti Money Laundering Specialist Cams

Instructions:

Answer 50 questions in 15 minutes.
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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. 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...
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
foreign correspondent banks
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).

2. Futures Commission Merchant (FCM)
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.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
As 'felonies' or 'all offenses in the criminal code'.
An electronic quotation system that displays quotes of many securities traded over the counter.

3. 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...
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
that appear to be linked
The opposing part of a transaction or trade.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.

4. What are included in the Wolfsberg AML Principles on Private Banking?
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
A US Federal Court
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.

5. Examples of VSP's
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
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.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
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.

6. How does 'Product Diversion' work?
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.
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
Foreign Corrupt Practices Act
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.

7. In what country is the Egmont Group Secretariat now located?
Terrorism and Terrorist Financing
Placement - Layering - Integration.
Canada
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.

8. Respondent Bank
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
Money Laundering and Tax Evasion
Take immediate steps to ratify and implement the UN instruments.
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'

9. Why is 'Know Your Correspondent Bank' important?
As a key tool in detecting suspicious or money laundering activity - it is important because correspondent accounts are often used as conduits to launder criminal proceeds in international settings.
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.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.

10. FATF Recommendation 6
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
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.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.

11. 'Kiting' via credit card
As 'felonies' or 'all offenses in the criminal code'.
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.

12. Why is understanding 'Product Diversion' important to the AML investigator?
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
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.
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.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.

13. FATF Recommendation 16
no regulatory power or function
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 firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
An account that does not show activity other than the posting of interest or account maintenance fees.

14. Commodity
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.
Placement - Layering - Integration.
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.

15. Vital Service Providers (VSPs)
A US Federal Court
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
The International Monetary Fund (IMF) and the world bank conduct the joint program.
People who help move the billions of dollars drug traffickers earn around the world.

16. The Palemo Convention
tipped off that they are being investigated.
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
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.
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.

17. Money Mules
Banking services between merchant banks and other financial institutions.
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.
Financial Action Task Force
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.

18. EAG
EurAsian Group
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
Penny Stocks

19. What is a Private Investment company (PIC)?
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.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
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 corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.

20. FATF Recommendation 19
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.

21. What are the three main functions of a 'Transfer Agent'?
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.
Take immediate steps to ratify and implement the UN instruments.
Reliable - independent source of documents - data or information.
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.

22. Derivatives
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
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.
The US State Dept issues the report annually.

23. FATF Sepcial Recommendation on Terrorist Financing -- SR Eight
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.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
The opposing part of a transaction or trade.
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.

24. FATF Recommendation 2
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.

25. 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.
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
disrupt or adversely afftect the business of the bank.
To reduce financial crime - including money laundering and terrorit financing.

26. Why is it imperative to have a strong Know Your Employee program?
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
A security that offers the owner the right to subscribe for ordinary shares of a company at a fixed date - usually at a fixed price. Equivalent to stock options.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.

27. What is meant by 'Know Your Correspondent Bank'?
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]
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
Countries should recognize money laundering as an extraditable offense.
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.

28. What is the Serious Organised Crime Agency (SOCA)?
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.
The FIU of the UK
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.
that appear to be linked

29. FATF Recommendation 26
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.
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.
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
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.

30. What does FIU do?
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
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.
bear the mark 'APOSTILLE'
Reliable - independent source of documents - data or information.

31. What does Financial Sector AssessmentProgram (FSAP) do?
Provide mutual legal assistance.
If provided for money laundering to be an internationally extraditable offense.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.
Typical mass-market banking where individual customers use local branches of larger commercial banks.

32. Commodity Trading Advisor
Direct or indirect advisor on buying and selling futures or commodity options.
Urge investors to buy 'house stocks' - stocks that the firm buys and sells as a market maker or has in its inventory. Oftentimes - they are running a 'pump-and-dumo' scheme.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.

33. Commodity Pool Operator
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
People who help move the billions of dollars drug traffickers earn around the world.
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.

34. FATF Recommendation 31
The FIU of Russia
Pouch activity.
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.

35. What is the FCPA primarily known for?
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
Provide mutual legal assistance.
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).
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.

36. FATF Recommendation 7
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)

37. What was the target of UN Security Council Resolution 1373?
Canada
A market is which securities are bought and sold outside of establisehd securities markets.
No.
Terrorism and Terrorist Financing

38. How do 'Hedge Funds' operate?
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.
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
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.

39. What do 'Hedge Funds' attempt to do?
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
Stored Value Cards - Mobile Payments - Internet Payments.
A security that offers the owner the right to subscribe for ordinary shares of a company at a fixed date - usually at a fixed price. Equivalent to stock options.
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.

40. May a shell bank maintain a correspondent account with a US bank?
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
No.
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.

41. How are 'Predicate Crimes' sometimes identified?
Combines funds from various members and users them to trade in futures or options contracts.
An account that does not show activity other than the posting of interest or account maintenance fees.
Take immediate steps to ratify and implement the UN instruments.
As 'felonies' or 'all offenses in the criminal code'.

42. What is the Federal Service for Financial Monitoring?
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
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.
The FIU of Russia

43. 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.
Solicits potential customers and issues the credit cards.
A US Federal Court
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
bear the mark 'APOSTILLE'

44. Portfolio Manager
Foreign Corrupt Practices Act
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.
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
Money Laundering and Tax Evasion

45. Agent (Insurance Industry)
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
It conducts investigations in support of a government's confiscation or seizure efforts.
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
Direct or indirect advisor on buying and selling futures or commodity options.

46. Under the US Bank Secrecy Act - SAR filings are confidential and the institutions employees cannot ____?
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'.
Provide mutual legal assistance.
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.

47. 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.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities 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]
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.

48. Transparency International
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
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.
Urge investors to buy 'house stocks' - stocks that the firm buys and sells as a market maker or has in its inventory. Oftentimes - they are running a 'pump-and-dumo' scheme.

49. Account Monitoring Order (UK and several other countries)
Pouch activity.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
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.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.

50. What were recently identified as Emerging Money Laundering risks?
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
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.
Funds transfers - Shell Corporations - Contractual Transactions.

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