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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. Apostille

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2. 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.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
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'.
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.

3. FATF Sepcial Recommendation on Terrorist Financing -- SR One
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.
Take immediate steps to ratify and implement the UN instruments.

4. OTC markets Over-The-Counter
No.
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
Funds transfers - Shell Corporations - Contractual Transactions.
A market is which securities are bought and sold outside of establisehd securities markets.

5. Underwriting
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
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.
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 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.

6. Futures Commission Merchant (FCM)
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.

7. Characteristics of an 'Open System Stored Value Card'
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.
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].
Funds transfers - Shell Corporations - Contractual Transactions.
If provided for money laundering to be an internationally extraditable offense.

8. FATF Recommendation 4
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
Stored Value Cards - Mobile Payments - Internet Payments.
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.

9. The Palemo Convention
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.
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
have in place compulsory currency reporting requirements.
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.

10. (Credit Card) Third-Party processor
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.

11. What does an Extradition Treaty specify?
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.

12. FATF Sepcial Recommendation on Terrorist Financing -- SR Three
Report suspicious transactions linked to terrorism.
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
Freeze and confiscate terrorist assets.

13. The 'Art Loss Register'

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14. What is the Serious Organised Crime Agency (SOCA)?
Combines funds from various members and users them to trade in futures or options contracts.
a chain-referral scheme.
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).
The FIU of the UK

15. FATF Recommendation 21
foreign correspondent banks
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.
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
Terrorism and Terrorist Financing

16. 'Introducing Broker-Dealers in Commodities' (IB-C)

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17. Wire Transfers
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.

18. FATF Recommendation 23
Use of electronic clearing houses to facilitate electronic transfers of money that complete transactions between two parties where the buyer receives securities - goods - services etc. in exchange for the money.
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.
They can accrue value as the price of the underlying stock rises.
Freeze and confiscate terrorist assets.

19. What was the effect of the 1988 Vienna Convention as it relates to extradtition?
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.
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.
If provided for money laundering to be an internationally extraditable offense.
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.

20. Moneyval
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
Report suspicious transactions linked to terrorism.

21. Foriegn Shell Banks are vehicles for ______ & ______?
Money Laundering and Tax Evasion
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.
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.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.

22. FATF Recommendation 7

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23. (Credit card) Acquiring Bank
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
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
Take immediate steps to ratify and implement the UN instruments.
Processes transactions for merchants who accept credit cards.

24. 'Kiting' via credit card
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.
Middle East and North Africa Financial Action Task Force
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
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).

25. Bust-out
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.
Funds transfers - Shell Corporations - Contractual Transactions.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
Expatriates sending money back to their home country or by other individuals sending money abroad.

26. FATF Sepcial Recommendation on Terrorist Financing -- SR Six
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.
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
have in place compulsory currency reporting requirements.
Impose AML requirements on alternative remittance systems.

27. Legal Arrangements (Insurance Industry)
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'
Open and Closed system
Refers to express trusts or other similar legal arrangements - such as fiducie - treuhand and fideicomiso [FATF Risk-Based approach - Guidance for the Life Insurance Sector - Oct 09]
The 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.

28. Wholesale Banking
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.
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.
Banking services between merchant banks and other financial institutions.
Person who - for compensation - provides advice on securities and investments and manages client assets.

29. MENAFATF
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.
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.
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
Middle East and North Africa Financial Action Task Force

30. FATF Recommendation 35
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
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.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.

31. FATF Recommendation 9
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.
a Sr Management level
Financial institutions may rely upon intermediaries to perform certain CDD elements provided the intermediary is supervised and regulated. However - ultimate responsibility remains with the financial institution.
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.

32. OCC Office of the Comptroller of the Currency
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
Strengthen customer identification measures in iternational and domestic wire transfers.
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.

33. Options/Options Contract
a Sr Management level
It was the first law in any country to make money laundering a crime.
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.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism

34. Who appear to be predominant users of hawalas and other alternative remittance systems?
Financial Action Task Force on Money Laundering in South America
Expatriates sending money back to their home country or by other individuals sending money abroad.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.

35. Convertible Bond
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
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.
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.

36. Free Look Period
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.

37. FATF Recommendation 12
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
To reduce financial crime - including money laundering and terrorit financing.
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
It conducts investigations in support of a government's confiscation or seizure efforts.

38. What must a financial institution do if they have 'Exempt Accounts'?
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.
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
People who help move the billions of dollars drug traffickers earn around the world.

39. FATF Recommendation 40
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].
Countering the Financing of Terrorism (Counter Terrorist Financing).
Person who - for compensation - provides advice on securities and investments and manages client assets.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.

40. What are some of the AML dangers of casino junkets?
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
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.
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.

41. Boiler Room
The US State Dept issues the report annually.
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
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.

42. How does the Egmont group help its members?
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
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.

43. What is a Private Investment company (PIC)?
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
To promote the effective supervision of banks in their jurisdictions; to further international cooperation in the supervision between the Offshore Banking Supervisors - and with Basel committee member nations and other banking supervisors.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.

44. FATF Recommendation 36
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
Provide mutual legal assistance.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
A US Federal Court

45. A pyramid scheme is also called...
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
a chain-referral scheme.
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.

46. What is the aim of Joint Money Laundering Steering Group? (UK)
Canada
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism

47. Three stages of money laundering
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
Placement - Layering - Integration.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.

48. What is important about the US Money Laundering Control Act (MCLA)?
It was the first law in any country to make money laundering a crime.
Stored Value Cards - Mobile Payments - Internet Payments.
A US Federal Court
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.

49. What are included in the Wolfsberg AML Principles on Private Banking?
Stored Value Cards - Mobile Payments - Internet Payments.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
Financial Action Task Force
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.

50. What is private investment company also known as?
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.
Funds transfers - Shell Corporations - Contractual Transactions.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
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.