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. Retail Banking
Typical mass-market banking where individual customers use local branches of larger commercial banks.
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.
2% - 5% ($590B - $1.5T)
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.


2. When was the Offshore Group of Banking Supervisors established? What was the impetus behind its establishment?
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
www.artloss.com
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.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).


3. Why is 'refining' critical to a money launderer's efforts?
An electronic quotation system that displays quotes of many securities traded over the counter.
Financial Action Task Force
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.


4. How are 'Predicate Crimes' sometimes identified?

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5. FATF Sepcial Recommendation on Terrorist Financing -- SR Six
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
Impose AML requirements on alternative remittance systems.
The opposing part of a transaction or trade.


6. MENAFATF
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
Middle East and North Africa Financial Action Task Force
Harmful or Preferrential Tax Regimes.
Placement - Layering - Integration.


7. Who appoints a 'Federal Receiver' (US)?
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
A US Federal Court
a Sr Management level
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.


8. Derivatives
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
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
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
The UN Convention against Transnational Organized Crime [Adopted 12/2000].


9. FATF Recommendation 37
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
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.
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.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.


10. Why is 'Know Your Customer's Customer' important?
Typical mass-market banking where individual customers use local branches of larger commercial banks.
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.


11. What was the target of UN Security Council Resolution 1267?
2% - 5% ($590B - $1.5T)
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
bear the mark 'APOSTILLE'
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization


12. Legal Arrangements (Insurance Industry)
Person who - for compensation - provides advice on securities and investments and manages client assets.
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]
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
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]


13. How do 'Hedge Funds' operate?

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14. White-Collar crime

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15. Wholesale Banking
Banking services between merchant banks and other financial institutions.
Confiscation
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]
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'


16. In general terms - EDD requires what of a financial institution?

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17. Variable Annuity
Solicits potential customers and issues the credit cards.
Banking services between merchant banks and other financial institutions.
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
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.


18. FATF Sepcial Recommendation on Terrorist Financing -- SR One
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].
Take immediate steps to ratify and implement the UN instruments.
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
Harmful or Preferrential Tax Regimes.


19. Convertible Bond
Provide mutual legal assistance.
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.
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
have in place compulsory currency reporting requirements.


20. What can result from on institution's disregard for the Basel Due Diligence Principle?
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
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.
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.
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.


21. CFT
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
Countering the Financing of Terrorism (Counter Terrorist Financing).
Financial Action Task Force on Money Laundering in South America
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.


22. Who conducts the Financial Sector Assessment Program (FSAP)?
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
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
Combines funds from various members and users them to trade in futures or options contracts.
The International Monetary Fund (IMF) and the world bank conduct the joint program.


23. FATF Recommendation 6
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
Stored Value Cards - Mobile Payments - Internet Payments.
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.


24. What does Financial Sector AssessmentProgram (FSAP) do?
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.
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.
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.


25. FATF
that appear to be linked
Financial Action Task Force
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.
They can accrue value as the price of the underlying stock rises.


26. Express Trust
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
The International Monetary Fund (IMF) and the world bank conduct the joint program.
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.


27. Structuring is a common technique in jurisdictions that...
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
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.
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
have in place compulsory currency reporting requirements.


28. A 'panzi' scheme is named for whom?
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.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.


29. FATF Recommendation 20
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
disrupt or adversely afftect the business of the bank.
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.


30. Why do companies export their goods at prices far below those in their home country?
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.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
Report suspicious transactions linked to terrorism.


31. In Emerging Money Laundering Risks - what 3 methods are identified as 'Funds Transfers'?
Intergovernmental Action Group against Money Laundering in Africa
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
Stored Value Cards - Mobile Payments - Internet Payments.
Harmful or Preferrential Tax Regimes.


32. 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...
foreign correspondent banks
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
An account that does not show activity other than the posting of interest or account maintenance fees.
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.


33. FATF Sepcial Recommendation on Terrorist Financing -- SR Two
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
Typical mass-market banking where individual customers use local branches of larger commercial banks.
2% - 5% ($590B - $1.5T)
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.


34. FATF Recommendation 17
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
disrupt or adversely afftect the business of the bank.
May involve movement or large sums of money going cross-border and often through multiple casinos - all by a third party (the operator). Sometime operator does not identify funds owners.
Countries should recognize money laundering as an extraditable offense.


35. What are some of the AML dangers of casino junkets?
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).
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.
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 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).


36. Commodity
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws


37. 'Kiting' via credit card
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.
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
Confiscation
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.


38. Guaranteed Introducing Broker

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39. Dematerialization of Securities

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40. 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
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.


41. Cash Equivalent

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42. Automated Sale
Harmful or Preferrential Tax Regimes.
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.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
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.


43. What do boiler room salespeople typically do?

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44. Wire Transfers
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
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.


45. Why is it imperative to have a strong Know Your Employee program?
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
foreign correspondent banks
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
2% - 5% ($590B - $1.5T)


46. (Credit Card) Third-Party processor
Strengthen customer identification measures in iternational and domestic wire transfers.
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.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
Financial Action Task Force


47. What is the FCPA primarily known for?
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.
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.
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 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).


48. (Credit Card) Issuing Bank
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Solicits potential customers and issues the credit cards.
Pouch activity.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.


49. Free Look Period
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.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.


50. FATF Recommendation 34
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.