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. FATF Recommendation 16
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.
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.
2% - 5% ($590B - $1.5T)
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.


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

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3. Behaviour detection

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4. US law prohibhits Foriegn Shell Banks from ____?
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
Person who - for compensation - provides advice on securities and investments and manages client assets.
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.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)


5. Commodity Trading Advisor
Penny Stocks
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.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
Direct or indirect advisor on buying and selling futures or commodity options.


6. What is the FCPA primarily known for?
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).
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.


7. MENAFATF
Middle East and North Africa Financial Action Task Force
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.
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.
Placement - Layering - Integration.


8. FATF Recommendation 3
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
Countries should recognize money laundering as an extraditable offense.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.


9. Arrest Warrant
No.
Confiscation
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.
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.


10. What was the target of UN Security Council Resolution 1373?
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.
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
Terrorism and Terrorist Financing


11. 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...
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.
that appear to be linked
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
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.


12. In what country is the Egmont Group Secretariat now located?
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
Canada
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.


13. What does FIU do beyond what FIU does?

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14. Derivatives
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
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.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
Harmful or Preferrential Tax Regimes.


15. Dematerialization of Securities

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16. Structuring is a common technique in jurisdictions that...
have in place compulsory currency reporting requirements.
2% - 5% ($590B - $1.5T)
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.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.


17. USA Patriot Act Section 312 'Offshore Bank'
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.
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.


18. Operational risks in KYC context relate to...
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
Expatriates sending money back to their home country or by other individuals sending money abroad.
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.


19. 'Competent Authorities' refers to _____.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
www.artloss.com
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
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.


20. 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.

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21. FATF Recommendation 7

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22. FATF Sepcial Recommendation on Terrorist Financing -- SR Eight
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
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'
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.


23. Distribution Channels (Insurance Industry)
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]
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
Placement - Layering - Integration.
Countering the Financing of Terrorism (Counter Terrorist Financing).


24. Why is 'Know Your Customer's Customer' important?
Canada
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
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.


25. What is one of the Financial Service Authority's (UK) tasks?
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
To reduce financial crime - including money laundering and terrorit financing.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.


26. FCPA (US)
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.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.
Foreign Corrupt Practices Act


27. FATF Recommendation 17
2% - 5% ($590B - $1.5T)
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
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.
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.


28. Many jurisdictions have legislation to ensure that suspects are not ____?
tipped off that they are being investigated.
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.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
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.


29. When was the Offshore Group of Banking Supervisors established? What was the impetus behind its establishment?
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
a Sr Management level
A deliberate attempt to interfere with the free and fair operation of the market and create artificial - false or misleading appearances with respect to the price of - or market for a security - commodity or currency.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.


30. FATF Recommendation 38
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.
Combines funds from various members and users them to trade in futures or options contracts.
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.
Financial Action Task Force


31. Pink Sheets
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
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.
An electronic quotation system that displays quotes of many securities traded over the counter.
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.


32. What are the three main functions of a 'Transfer Agent'?
Competent authorities should have powers of subpoena - search and seizure.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
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.


33. Examples of VSP's
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.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
A US Federal Court


34. FATF Recommendation 2
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
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.


35. In Emerging Money Laundering Risks - what 3 areas are associated with 'Contractual Transactions'?
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
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'.
Impose AML requirements on alternative remittance systems.


36. What tend to be the markings of Private Banking transactions?
Expatriates sending money back to their home country or by other individuals sending money abroad.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
bear the mark 'APOSTILLE'


37. FATF Recommendation 27
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
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.
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.


38. Identification data
Reliable - independent source of documents - data or information.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
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.
The FIU of the UK


39. Why is it imperative to have a strong Know Your Employee program?
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.


40. FATF Recommendation 29
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.


41. As considered by UN and OECD - these are jurisdictions that have no or low tax rates - and do not attract real business or foreign investment
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
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.
Review customer files and conduct random sampling of accounts.
Harmful or Preferrential Tax Regimes.


42. What are included in the Wolfsberg AML Principles on Private Banking?
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
Harmful or Preferrential Tax Regimes.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
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.


43. (Stock) Warrants
a Sr Management level
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
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.
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.


44. GAFISUD
Financial Action Task Force on Money Laundering in South America
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
Intergovernmental Action Group against Money Laundering in Africa
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.


45. Margin
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
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.


46. Cash Letter
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
Banking services between merchant banks and other financial institutions.
disrupt or adversely afftect the business of the bank.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.


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

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48. Example of use of an Apostille
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.
Penny Stocks
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.


49. FATF Recommendation 23
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
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.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
Review customer files and conduct random sampling of accounts.


50. FATF Recommendation 11
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'.
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.
Freeze and confiscate terrorist assets.
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.