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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. What does the 'SEC' (US Securities and Exchange Commission) do?
disrupt or adversely afftect the business of the bank.
The FIU of Russia
To reduce financial crime - including money laundering and terrorit financing.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.

2. How does the Egmont group help its members?
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.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.

3. What is private investment company also known as?
Countering the Financing of Terrorism (Counter Terrorist Financing).
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.
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.
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.

4. FATF Recommendation 30
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
Intergovernmental Action Group against Money Laundering in Africa
Direct or indirect advisor on buying and selling futures or commodity options.

5. What do boiler room salespeople typically sell?
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
Penny Stocks
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.

6. Options/Options Contract
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
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.
Confiscation
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.

7. What are some of the AML dangers of casino junkets?
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
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.
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.
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.

8. Fraud
The US State Dept issues the report annually.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.

9. A 'panzi' scheme is named for whom?
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.
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.
Pouch activity.
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].

10. What is the primary use of a 'Mutual Legal Assistance Treaty'?
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
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
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).

11. FATF Recommendation 21
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 transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.

12. Where is the Art Loss Register found?
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).
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
www.artloss.com

13. FATF Recommendation 37
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
As 'felonies' or 'all offenses in the criminal code'.
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.

14. FATF Recommendation 27
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
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.
As 'felonies' or 'all offenses in the criminal code'.
Banking services between merchant banks and other financial institutions.

15. What are included in the Wolfsberg AML Principles on Private Banking?
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
It was the first law in any country to make money laundering a crime.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.

16. What is a 'NCCT'?
Person who - for compensation - provides advice on securities and investments and manages client assets.
An account that does not show activity other than the posting of interest or account maintenance fees.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.

17. Variable Annuity
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
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.
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.

18. Commodity Trading Advisor
Direct or indirect advisor on buying and selling futures or commodity options.
that appear to be linked
A fund setup by an investment trust in which the number of shares can fluctuate as investors' move in and out the fund. Share prices moves in direct proportion of the net asset value of the underlying investments (no premium or discount).
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).

19. How do most governments view Private Banking?
that appear to be linked
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
As a financial institution service that is very vulnerable to money laundering.
Financial Action Task Force

20. Cash Equivalent

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21. FATF Recommendation 18
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.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
As a financial institution service that is very vulnerable to money laundering.
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.

22. FATF Recommendation 1
An electronic quotation system that displays quotes of many securities traded over the counter.
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
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.

23. FATF Recommendation 3
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
If provided for money laundering to be an internationally extraditable offense.

24. FATF Recommendation 11
Pouch activity.
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.
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.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.

25. FATF's designated transactional threshold for Delaers is Precious metals and / or Precious Stones is _____.
Countries should recognize money laundering as an extraditable offense.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
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.
If provided for money laundering to be an internationally extraditable offense.

26. A pyramid scheme is also called...
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
Penny Stocks
a chain-referral scheme.

27. Vital Service Providers (VSPs)
The US State Dept issues the report annually.
People who help move the billions of dollars drug traffickers earn around the world.
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
The FIU of Russia

28. FATF Recommendation 36
Provide mutual legal assistance.
It was the first law in any country to make money laundering a crime.
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.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.

29. US law prohibhits Foriegn Shell Banks from ____?
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
a Sr Management level
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.

30. FATF Recommendation 20
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
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'
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
It conducts investigations in support of a government's confiscation or seizure efforts.

31. What normal business practise makes 'Product Division' possible?
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
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.
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.

32. Identification data
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.
Reliable - independent source of documents - data or information.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.

33. Transparency International
Canada
Typical mass-market banking where individual customers use local branches of larger commercial banks.
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.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.

34. OCC Office of the Comptroller of the Currency
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.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
An electronic quotation system that displays quotes of many securities traded over the counter.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.

35. FATF Recommendation 39
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
Countries should recognize money laundering as an extraditable offense.

36. (Credit Card) Third-Party processor
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
no regulatory power or function
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.

37. Respondent Bank

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38. The Joint Money Laundering Steering Group (UK) has published a series of AML Guidance Notes for different sectors of the financial community. But - As a group of trade associations - it has...
no regulatory power or function
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
Competent authorities should have powers of subpoena - search and seizure.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.

39. Arrest Warrant
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
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.
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.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.

40. In what country is the Egmont Group Secretariat now located?
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
Canada
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.

41. What is the Serious Organised Crime Agency (SOCA)?
Take immediate steps to ratify and implement the UN instruments.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
The FIU of the UK
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)

42. Derivatives
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.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
Money Laundering and Tax Evasion
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.

43. The IMF estimates that laundered funds compromise ______ of the world's GDP
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
2% - 5% ($590B - $1.5T)
have in place compulsory currency reporting requirements.
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.

44. OTC markets Over-The-Counter
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 ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
A market is which securities are bought and sold outside of establisehd securities markets.

45. FATF Recommendation 15
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
Penny Stocks
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.

46. What does the principal US money laundering law look for before implementing its 'Extraterritorial Reach'?
Transportation/transfer of funds (even clean) to/from the US - if done to promote unlawful activity - or with knowledge that the funds are illicit - or to conceal/disguise the nature - location - source - ownership - etc. of funds - or to avoid feder
Impose AML requirements on alternative remittance systems.
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.
www.artloss.com

47. Margin
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.
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
that appear to be linked

48. FATF Recommendation 40
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
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.
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.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.

49. How is 'Legal Risk' defined by the 2001 Basel Due Diligence Principles?
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 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.
a chain-referral scheme.
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.

50. What was the effect of the 1988 Vienna Convention as it relates to extradtition?
Middle East and North Africa Financial Action Task Force
If provided for money laundering to be an internationally extraditable offense.
Futures contracts - forwards - swaps or options.
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.