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Certified Anti Money Laundering Specialist Cams

Instructions:

Answer 50 questions in 15 minutes.
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Match each statement with the correct term.
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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 18
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
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.
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.

2. Moneyval
Middle East and North Africa Financial Action Task Force
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
It was the first law in any country to make money laundering a crime.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.

3. In Emerging Money Laundering Risks - what 3 methods are identified as 'Funds Transfers'?
Stored Value Cards - Mobile Payments - Internet Payments.
A market is which securities are bought and sold outside of establisehd securities markets.
Confiscation
Placement - Layering - Integration.

4. What normal business practise makes 'Product Division' possible?
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
Charles Ponzi - an Italian immigrant to the US who spent 10 years in jail for a scheme that defrauded 40 -000 people out of $15 million.

5. Commodity
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.

6. Underwriting
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
tipped off that they are being investigated.
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.
EurAsian Group

7. What does the principal US money laundering law look for before implementing its 'Extraterritorial Reach'?
People who help move the billions of dollars drug traffickers earn around the world.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
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
The FIU of the UK

8. Who issues the Internationa Narcotics Control Strategy Report (INCSR) and how often?
Countering the Financing of Terrorism (Counter Terrorist Financing).
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.
The US State Dept issues the report annually.
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.

9. FATF Recommendation 1
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
Banking services between merchant banks and other financial institutions.
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.
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.

10. What is a 'Trust'?
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.
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.

11. Apostille
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 firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
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.
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.

12. GIABA
Competent authorities should have powers of subpoena - search and seizure.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
Intergovernmental Action Group against Money Laundering in Africa
Pouch activity.

13. FCPA (US)
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
As a financial institution service that is very vulnerable to money laundering.
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'
Foreign Corrupt Practices Act

14. What are the two types of Stored Value Cards?
The FIU of the UK
Direct or indirect advisor on buying and selling futures or commodity options.
Open and Closed system
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.

15. What tend to be the markings of Private Banking transactions?
Contract issued by an insurance company under which an investor provides the insurer with funds (a lump-sum or series of payments). The insurer then agrees to make periodic payments to the investor starting the immediately or in the future.
The opposing part of a transaction or trade.
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)

16. FATF Sepcial Recommendation on Terrorist Financing -- SR Four
Report suspicious transactions linked to terrorism.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
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.

17. OCC Office of the Comptroller of the Currency
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
Financial Action Task Force on Money Laundering in South America
An electronic quotation system that displays quotes of many securities traded over the counter.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.

18. 'Introducing Broker-Dealers in Commodities' (IB-C)
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.
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.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
a Sr Management level

19. The Palemo Convention
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.
Letters Rogatory

20. FATF Recommendation 3
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.

21. FATF Recommendation 35
Competent authorities should have powers of subpoena - search and seizure.
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
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.
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.

22. Wholesale Banking
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.
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
Banking services between merchant banks and other financial institutions.

23. Arrest Warrant
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.
foreign correspondent banks
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'.
have in place compulsory currency reporting requirements.

24. FATF Recommendation 28
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
Competent authorities should have powers of subpoena - search and seizure.
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

25. What is meant by 'Know Your Customer's customer'?
foreign correspondent banks
Direct or indirect advisor on buying and selling futures or commodity options.
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.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.

26. White-Collar crime
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
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.

27. Legal Arrangements (Insurance Industry)
Freeze and confiscate terrorist assets.
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.
Refers to express trusts or other similar legal arrangements - such as fiducie - treuhand and fideicomiso [FATF Risk-Based approach - Guidance for the Life Insurance Sector - Oct 09]
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.

28. 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).
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
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.

29. Short Sale
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
that appear to be linked
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.
Countries should recognize money laundering as an extraditable offense.

30. Automated Sale
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
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.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
As 'felonies' or 'all offenses in the criminal code'.

31. In Emerging Money Laundering Risks - what 3 areas are associated with 'Contractual Transactions'?
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.
2% - 5% ($590B - $1.5T)
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
Pouch activity.

32. Boiler Room
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.
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
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.
An account that does not show activity other than the posting of interest or account maintenance fees.

33. FATF Recommendation 36
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
Provide mutual legal assistance.
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).
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.

34. Many jurisdictions have legislation to ensure that suspects are not ____?
tipped off that they are being investigated.
It was the first law in any country to make money laundering a crime.
Pouch activity.
a chain-referral scheme.

35. EAG
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.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
EurAsian Group

36. FATF Recommendation 32
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.
People who help move the billions of dollars drug traffickers earn around the world.
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
EurAsian Group

37. Fraud
Combines funds from various members and users them to trade in futures or options contracts.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
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]
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.

38. 'Loan Back' method. Give example of how it works.
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
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
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.
Pouch activity.

39. Pink Sheets
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.
An electronic quotation system that displays quotes of many securities traded over the counter.
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.

40. 'Coucil of Europe Convention on Laundering - Search - Seizure and Confiscation of the Proceeds from Crime' is known for what?
Futures contracts - forwards - swaps or options.
Penny Stocks
Funds transfers - Shell Corporations - Contractual Transactions.
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].

41. 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.
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.
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.
Impose AML requirements on alternative remittance systems.

42. 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
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
Harmful or Preferrential Tax Regimes.
disrupt or adversely afftect the business of the bank.
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.

43. Basel's 'CDD for Banks' states that the decision to open an account for a PEP should be taken at...
Foreign Corrupt Practices Act
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
a Sr Management level

44. Cash Letter
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
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.
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.

45. Transparency International
Foreign Corrupt Practices Act
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.

46. FATF Recommendation 12
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.
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
Charles Ponzi - an Italian immigrant to the US who spent 10 years in jail for a scheme that defrauded 40 -000 people out of $15 million.
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.

47. What is a 'NCCT'?
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
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
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.

48. (Credit Card) Third-Party processor
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.
Refers to express trusts or other similar legal arrangements - such as fiducie - treuhand and fideicomiso [FATF Risk-Based approach - Guidance for the Life Insurance Sector - Oct 09]
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.

49. FATF Recommendation 4
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
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.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
Direct or indirect advisor on buying and selling futures or commodity options.

50. Express Trust
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.

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