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 20
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
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.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.


2. (Stock) Warrants
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
If provided for money laundering to be an internationally extraditable offense.
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
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.


3. Account Monitoring Order (UK and several other countries)
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
Combines funds from various members and users them to trade in futures or options contracts.
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.


4. FATF's designated transactional threshold for Financial Insitutions is _____.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
As a financial institution service that is very vulnerable to money laundering.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)


5. FATF Recommendation 25
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.
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.
The world's largest private DB of stolen art.
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.


6. Transparency International
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.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
The International Monetary Fund (IMF) and the world bank conduct the joint program.
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.


7. Derivatives
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
The FIU of Russia
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.


8. FATF Recommendation 8
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
foreign correspondent banks
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.


9. What is the primary use of a 'Mutual Legal Assistance Treaty'?
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.


10. 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.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
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.


11. Who appoints a 'Federal Receiver' (US)?
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
Typical mass-market banking where individual customers use local branches of larger commercial banks.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
A US Federal Court


12. Foriegn Shell Banks are vehicles for ______ & ______?
No.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
Money Laundering and Tax Evasion


13. Dormant Account
An account that does not show activity other than the posting of interest or account maintenance fees.
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.
A US Federal Court
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.


14. What was the target of UN Security Council Resolution 1267?
tipped off that they are being investigated.
Funds transfers - Shell Corporations - Contractual Transactions.
A market is which securities are bought and sold outside of establisehd securities markets.
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization


15. Scheme
Processes transactions for merchants who accept credit cards.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
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.
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.


16. Money Mules
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.
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.
A person who tranfers stolen money (or merchandise) from one country to another - often as a result of online scams. Transfers - can be done electronically - via mail or courier service or in person.
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]


17. Who issues the Internationa Narcotics Control Strategy Report (INCSR) and how often?
The US State Dept issues the report annually.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
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).
Open and Closed system


18. USA Patriot Act Section 312 'Offshore Bank'
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.
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
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.
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.


19. Open System Stored Value Card
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.
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
Report suspicious transactions linked to terrorism.


20. Why is 'refining' critical to a money launderer's efforts?
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.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
www.artloss.com


21. What must a financial institution do if they have 'Exempt Accounts'?
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.
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.
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
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.


22. Convertible Bond
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.
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
As a financial institution service that is very vulnerable to money laundering.


23. Bust-out
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
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


24. 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
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
To reduce financial crime - including money laundering and terrorit financing.
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.


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

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26. What is the Wolfsberg group?
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
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'.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism


27. FATF Recommendation 21
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
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.
Terrorism and Terrorist Financing


28. Dematerialization of Securities

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29. FATF Recommendation 1
Freeze and confiscate terrorist assets.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.


30. OTC markets Over-The-Counter
no regulatory power or function
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
A market is which securities are bought and sold outside of establisehd securities markets.
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.


31. Respondent Bank

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32. Many jurisdictions have legislation to ensure that suspects are not ____?
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
tipped off that they are being investigated.
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.


33. FATF Recommendation 13
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
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.
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.


34. FATF Recommendation 14
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
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.
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data


35. (Credit Card) Issuing Bank
Solicits potential customers and issues the credit cards.
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.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
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.


36. 'Competent Authorities' refers to _____.
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
Freeze and confiscate terrorist assets.


37. FATF Recommendation 16
If provided for money laundering to be an internationally extraditable offense.
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.
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.


38. FATF Sepcial Recommendation on Terrorist Financing -- SR Eight
Take immediate steps to ratify and implement the UN instruments.
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).
As a financial institution service that is very vulnerable to money laundering.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.


39. What is important about the US Money Laundering Control Act (MCLA)?
People who help move the billions of dollars drug traffickers earn around the world.
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
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).
It was the first law in any country to make money laundering a crime.


40. Counter Party
Banking services between merchant banks and other financial institutions.
The opposing part of a transaction or trade.
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
As 'felonies' or 'all offenses in the criminal code'.


41. Express Trust
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
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
Open and Closed system


42. FATF Recommendation 26
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.


43. FATF Sepcial Recommendation on Terrorist Financing -- SR Four
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
disrupt or adversely afftect the business of the bank.
Report suspicious transactions linked to terrorism.


44. White-Collar crime

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45. GIABA
Expatriates sending money back to their home country or by other individuals sending money abroad.
Intergovernmental Action Group against Money Laundering in Africa
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
Strengthen customer identification measures in iternational and domestic wire transfers.


46. A 'Cash Letter' can also be referred to as _____.
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.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
Pouch activity.


47. When was the Offshore Group of Banking Supervisors established? What was the impetus behind its establishment?
Freeze and confiscate terrorist assets.
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).


48. What is the Federal Service for Financial Monitoring?
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.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
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.
The FIU of Russia


49. 'Closed-end Mutual Fund' (Or Comany)

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50. Three stages of money laundering
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
Placement - Layering - Integration.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)