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. Common types of 'Derivatives'
People who help move the billions of dollars drug traffickers earn around the world.
Futures contracts - forwards - swaps or options.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.


2. Why is 'refining' critical to a money launderer's efforts?
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
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.
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.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.


3. A pyramid scheme is also called...
Competent authorities should have powers of subpoena - search and seizure.
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.
a chain-referral scheme.
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.


4. What tend to be the markings of Private Banking transactions?
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
Direct money of Criminal A is sent to foreign bank account of company B. Investment company C is formed as A's country. A is appointed as director of C. C borrows money from B and buys building which is rented to 3rd parties. with rent - C pays off B
The nature of the request - the relevant criminal charges in the requesting country - the legal provision under which the request is made - and the information that is sought.
Typical mass-market banking where individual customers use local branches of larger commercial banks.


5. 'Loan Back' method. Give example of how it works.

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6. FATF Sepcial Recommendation on Terrorist Financing -- SR Two
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
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.
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.


7. Many jurisdictions have legislation to ensure that suspects are not ____?
tipped off that they are being investigated.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
A US Federal Court
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.


8. Investment Adviser
Person who - for compensation - provides advice on securities and investments and manages client assets.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
that appear to be linked
Letters Rogatory


9. What normal business practise makes 'Product Division' possible?
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.


10. Margin
Pouch activity.
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.
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.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.


11. Pink Sheets
Freeze and confiscate terrorist assets.
a chain-referral scheme.
An electronic quotation system that displays quotes of many securities traded over the counter.
People who help move the billions of dollars drug traffickers earn around the world.


12. Dematerialization of Securities

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13. FATF Sepcial Recommendation on Terrorist Financing -- SR Six
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Processes transactions for merchants who accept credit cards.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.
Impose AML requirements on alternative remittance systems.


14. 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...
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
foreign correspondent banks
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
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.


15. FATF Recommendation 32
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
Futures contracts - forwards - swaps or options.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.


16. What does a 'Commission Rogatoire' normally specify?
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.
The nature of the request - the relevant criminal charges in the requesting country - the legal provision under which the request is made - and the information that is sought.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
Placement - Layering - Integration.


17. 'Kiting' via credit card
It was the first law in any country to make money laundering a crime.
Provide mutual legal assistance.
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
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.


18. What is one of the cental stragetic tools required for effective action against money laundering?
A US Federal Court
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
Confiscation


19. A public perception that a bank is not able to manage its operational risk effectively can...
disrupt or adversely afftect the business of the bank.
Intergovernmental Action Group against Money Laundering in Africa
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
foreign correspondent banks


20. FATF Recommendation 24
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
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.
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.


21. Counter Party
The opposing part of a transaction or trade.
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
Expatriates sending money back to their home country or by other individuals sending money abroad.
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.


22. FATF Recommendation 7

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23. FATF Recommendation 28
Competent authorities should have powers of subpoena - search and seizure.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
Financial Action Task Force on Money Laundering in South America
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.


24. Cash Log

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25. Convertible Bond
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
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.
Pouch activity.
Direct money of Criminal A is sent to foreign bank account of company B. Investment company C is formed as A's country. A is appointed as director of C. C borrows money from B and buys building which is rented to 3rd parties. with rent - C pays off B


26. Operational risks in KYC context relate to...
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.
Funds transfers - Shell Corporations - Contractual Transactions.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
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.


27. FATF Recommendations examples of non-financial businesses and professions
Countering the Financing of Terrorism (Counter Terrorist Financing).
a chain-referral scheme.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.


28. (Credit Card) Third-Party processor
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
Letters Rogatory
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.


29. What is important about the US Money Laundering Control Act (MCLA)?
Report suspicious transactions linked to terrorism.
It was the first law in any country to make money laundering a crime.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
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.


30. Penny Stocks
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
They can accrue value as the price of the underlying stock rises.
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.
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.


31. FATF Recommendation 14
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.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
The nature of the request - the relevant criminal charges in the requesting country - the legal provision under which the request is made - and the information that is sought.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.


32. What is one of the Financial Service Authority's (UK) tasks?
Report suspicious transactions linked to terrorism.
To reduce financial crime - including money laundering and terrorit financing.
The International Monetary Fund (IMF) and the world bank conduct the joint program.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.


33. Why is understanding 'Product Diversion' important to the AML investigator?
Impose AML requirements on alternative remittance systems.
Processes transactions for merchants who accept credit cards.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
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.


34. FATF Recommendation 11
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.
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
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.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).


35. What is a 'NCCT'?
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
Harmful or Preferrential Tax Regimes.


36. FATF Recommendation 23
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
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.
Competent authorities should have powers of subpoena - search and seizure.
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.


37. 'Competent Authorities' refers to _____.
Harmful or Preferrential Tax Regimes.
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.
A market is which securities are bought and sold outside of establisehd securities markets.
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.


38. FATF Sepcial Recommendation on Terrorist Financing -- SR Four
Report suspicious transactions linked to terrorism.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
No.
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.


39. May a shell bank maintain a correspondent account with a US bank?
No.
Take immediate steps to ratify and implement the UN instruments.
It conducts investigations in support of a government's confiscation or seizure efforts.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.


40. Boiler Room
Pouch activity.
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.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.


41. How does the Egmont group help its members?
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.
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.
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
tipped off that they are being investigated.


42. What criterion does the US need to enforce its 'Extraterritorial Reach'?

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43. EAG
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.
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
EurAsian Group
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.


44. How is 'Identity theft' often accomplished?
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
Confiscation


45. The Palemo Convention
The International Monetary Fund (IMF) and the world bank conduct the joint program.
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
A contractual arrangement whereby the trustee manages the property for the benefit of the beneficiary in accordance with the contractual terms set by the grantor.


46. How do most governments view Private Banking?
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
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.
As a financial institution service that is very vulnerable to money laundering.


47. Identification data
Solicits potential customers and issues the credit cards.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
Reliable - independent source of documents - data or information.


48. FATF Recommendation 22

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49. What is the FCPA primarily known for?
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
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).
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.
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.


50. When is a jurisdiction considered to be 'ring-fenced'?
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
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
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.