Test your basic knowledge |

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. According to FATF - financial transactions above a designated threshold may include situations where the transaction takes place in a single operation or in several operations...
that appear to be linked
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.
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.

2. How does 'Product Diversion' work?
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.
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
Take immediate steps to ratify and implement the UN instruments.

3. What do 'Hedge Funds' attempt to do?
Typical mass-market banking where individual customers use local branches of larger commercial banks.
The opposing part of a transaction or trade.
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
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.

4. Moneyval
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 Sr Management level
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism

5. CFT
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.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
Countering the Financing of Terrorism (Counter Terrorist Financing).
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.

6. What is a Private Investment company (PIC)?
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
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 apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.

7. What does the 'SEC' (US Securities and Exchange Commission) do?
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
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.
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.
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.

8. How is 'Legal Risk' defined by the 2001 Basel Due Diligence Principles?
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
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.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
As 'felonies' or 'all offenses in the criminal code'.

9. OCC Office of the Comptroller of the Currency
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
It was the first law in any country to make money laundering a crime.
The opposing part of a transaction or trade.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.

10. Express Trust
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.
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.
The International Monetary Fund (IMF) and the world bank conduct the joint program.
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.

11. What does a 'Commission Rogatoire' normally specify?
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).
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.
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.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.

12. What are the three main functions of a 'Transfer Agent'?
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.
Canada
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 contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.

13. Agent (Insurance Industry)
Terrorism and Terrorist Financing
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
Reliable - independent source of documents - data or information.
Financial Action Task Force

14. In Emerging Money Laundering Risks - what 3 methods are identified as 'Funds Transfers'?
Stored Value Cards - Mobile Payments - Internet Payments.
disrupt or adversely afftect the business of the bank.
No.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.

15. FATF Recommendation 5
It conducts investigations in support of a government's confiscation or seizure efforts.
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
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.

16. Reverse Flip

Warning: Invalid argument supplied for foreach() in /var/www/html/basicversity.com/show_quiz.php on line 183

17. 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...
Countering the Financing of Terrorism (Counter Terrorist Financing).
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
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.
foreign correspondent banks

18. Many jurisdictions have legislation to ensure that suspects are not ____?
tipped off that they are being investigated.
Futures contracts - forwards - swaps or options.
Middle East and North Africa Financial Action Task Force
Expatriates sending money back to their home country or by other individuals sending money abroad.

19. FATF Sepcial Recommendation on Terrorist Financing -- SR Nine
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.
Combines funds from various members and users them to trade in futures or options contracts.
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
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.

20. MENAFATF
Middle East and North Africa Financial Action Task Force
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
A market is which securities are bought and sold outside of establisehd securities markets.

21. FATF Recommendation 13
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
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.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.

22. FATF Sepcial Recommendation on Terrorist Financing -- SR Three
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.
Freeze and confiscate terrorist assets.
Foreign Corrupt Practices Act
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.

23. Corporate Bank

Warning: Invalid argument supplied for foreach() in /var/www/html/basicversity.com/show_quiz.php on line 183

24. Why is it imperative to have a strong Know Your Employee program?
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
foreign correspondent banks
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.

25. Vital Service Providers (VSPs)
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
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.
It conducts investigations in support of a government's confiscation or seizure efforts.
People who help move the billions of dollars drug traffickers earn around the world.

26. FATF
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
www.artloss.com
Financial Action Task Force
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.

27. Why does a launderer try to run transactions through a concentration account of a financial institution?
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
Countering the Financing of Terrorism (Counter Terrorist Financing).
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.

28. FATF Recommendation 6
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
To reduce financial crime - including money laundering and terrorit financing.

29. FATF Recommendation 2
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.

30. What is important about the US Money Laundering Control Act (MCLA)?
It was the first law in any country to make money laundering a crime.
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Financial Action Task Force on Money Laundering in South America
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.

31. What is a 'NCCT'?
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
Intergovernmental Action Group against Money Laundering in Africa
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.

32. FATF Sepcial Recommendation on Terrorist Financing -- SR One
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
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
Take immediate steps to ratify and implement the UN instruments.
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.

33. What is the FCPA primarily known for?
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
have in place compulsory currency reporting requirements.
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).

34. What can result from on institution's disregard for the Basel Due Diligence Principle?
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
Report suspicious transactions linked to terrorism.

35. What does Financial Sector AssessmentProgram (FSAP) do?
Terrorism and Terrorist Financing
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.
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.

36. 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...
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.
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
no regulatory power or function
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.

37. 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.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.

38. FATF Recommendation 16
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
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.
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.
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.

39. Operational risks in KYC context relate to...
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.
disrupt or adversely afftect the business of the bank.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.

40. What is meant by 'Know Your Customer's customer'?
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.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
a Sr Management level
tipped off that they are being investigated.

41. What does the principal US money laundering law look for before implementing its 'Extraterritorial Reach'?
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
Canada
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

42. Dematerialization of Securities

Warning: Invalid argument supplied for foreach() in /var/www/html/basicversity.com/show_quiz.php on line 183

43. What is the aim of Joint Money Laundering Steering Group? (UK)
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
To reduce financial crime - including money laundering and terrorit financing.
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.

44. Foriegn Shell Banks are vehicles for ______ & ______?
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
Canada
Money Laundering and Tax Evasion

45. Why do convertible bonds oftern have lower interest rates than non-convertible bonds?
have in place compulsory currency reporting requirements.
They can accrue value as the price of the underlying stock rises.
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.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.

46. What does an Extradition Treaty specify?
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
Combines funds from various members and users them to trade in futures or options contracts.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.

47. (Credit Card) Issuing Bank
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
Solicits potential customers and issues the credit cards.
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.

48. Under the US Bank Secrecy Act - SAR filings are confidential and the institutions employees cannot ____?

Warning: Invalid argument supplied for foreach() in /var/www/html/basicversity.com/show_quiz.php on line 183

49. Who appoints a 'Federal Receiver' (US)?
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
A US Federal Court

50. Transparency International
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.
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.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.