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. What does an Extradition Treaty specify?
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.


2. Cash Letter
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
A market is which securities are bought and sold outside of establisehd securities markets.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].


3. What is a 'Trust'?
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.
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.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
Processes transactions for merchants who accept credit cards.


4. FATF Recommendation 3
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or 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.
no regulatory power or function
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.


5. FATF Recommendation 31
An electronic quotation system that displays quotes of many securities traded over the counter.
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
Solicits potential customers and issues the credit cards.


6. FATF Recommendation 10
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
While it is normally known as a Personal Investment Company (PIC) - in some jurisdictions - the international business company or exempt company is also the same.
Report suspicious transactions linked to terrorism.


7. FATF Recommendation 6
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
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 one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
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


8. Why is 'Know Your Customer's Customer' important?
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
Foreign Corrupt Practices Act
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.


9. 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.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
www.artloss.com
Letters Rogatory


10. Who appoints a 'Federal Receiver' (US)?
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.
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
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.


11. Where is the Art Loss Register found?
If provided for money laundering to be an internationally extraditable offense.
As a financial institution service that is very vulnerable to money laundering.
The FIU of the UK
www.artloss.com


12. Why does a launderer try to run transactions through a concentration account of a financial institution?
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.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.


13. FATF Recommendation 22

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14. Why do convertible bonds oftern have lower interest rates than non-convertible bonds?
They can accrue value as the price of the underlying stock rises.
Intergovernmental Action Group against Money Laundering in Africa
Terrorism and Terrorist Financing
If provided for money laundering to be an internationally extraditable offense.


15. FATF Recommendation 2
As a financial institution service that is very vulnerable to money laundering.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.


16. Nostro

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17. Vital Service Providers (VSPs)
People who help move the billions of dollars drug traffickers earn around the world.
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.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].


18. Should one ever file a Suspicious Transaction Report (STR/SAR) based on a person's profile?

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19. FATF Recommendation 34
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 express trusts - including information on the settlor - trustee and beneficiaries.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.


20. Characteristics of an 'Open System Stored Value Card'
Review customer files and conduct random sampling of accounts.
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.
2% - 5% ($590B - $1.5T)
no regulatory power or function


21. Mutual Fund
Futures contracts - forwards - swaps or options.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
Stored Value Cards - Mobile Payments - Internet Payments.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.


22. 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.
Terrorism and Terrorist Financing
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.
Report suspicious transactions linked to terrorism.


23. FATF Recommendation 1
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).
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).


24. Cash Equivalent

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25. Operational risks in KYC context relate to...
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
weakness in the implementation of bank programs - ineffective control procedures and failure to practice 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.
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.


26. Who appear to be predominant users of hawalas and other alternative remittance systems?
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).
Expatriates sending money back to their home country or by other individuals sending money abroad.
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.
Money Laundering and Tax Evasion


27. What was the target of UN Security Council Resolution 1267?
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
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.
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
Combines funds from various members and users them to trade in futures or options contracts.


28. FATF Recommendation 24
Financial Action Task Force on Money Laundering in South America
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
Processes transactions for merchants who accept credit cards.


29. 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.
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.
It was the first law in any country to make money laundering a crime.
Financial Action Task Force on Money Laundering in South America


30. Credit Card Associations
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.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.


31. FATF
Financial Action Task Force
They can accrue value as the price of the underlying stock rises.
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.


32. FATF Recommendation 16
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.
No.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.


33. How does the Egmont group help its members?
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.
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.
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.


34. FATF Recommendation 8
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
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'
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
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


35. What were recently identified as Emerging Money Laundering risks?
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
Funds transfers - Shell Corporations - Contractual Transactions.
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. FATF's designated transactional threshold for Delaers is Precious metals and / or Precious Stones is _____.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
The right - but not the obligation - to buy or sell a set amount of something - such as a share or commodity - at a set price after a set expiration date.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.


37. FATF Sepcial Recommendation on Terrorist Financing -- SR Two
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.


38. GIABA
Intergovernmental Action Group against Money Laundering in Africa
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
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.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.


39. 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...
foreign correspondent banks
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.


40. 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.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
Canada
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.


41. What is a Private Investment company (PIC)?
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Financial Action Task Force on Money Laundering in South America
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.


42. Futures Commission Merchant (FCM)
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.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
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.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.


43. What tend to be the markings of Private Banking transactions?
Combines funds from various members and users them to trade in futures or options contracts.
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.


44. Free Look Period
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.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.


45. Bust-out
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
2% - 5% ($590B - $1.5T)
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.


46. Penny Stocks
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.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
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.
Review customer files and conduct random sampling of accounts.


47. What is the FCPA primarily known for?
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
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).
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. FATF Recommendation 25
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.
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
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.


49. Short Sale

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50. What is a 'NCCT'?
bear the mark 'APOSTILLE'
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
Solicits potential customers and issues the credit cards.