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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 is private investment company also known as?
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 order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
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.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.

2. Why do convertible bonds oftern have lower interest rates than non-convertible bonds?
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.
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'
They can accrue value as the price of the underlying stock rises.
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.

3. FATF Recommendation 15
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
If provided for money laundering to be an internationally extraditable offense.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.

4. 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.
no regulatory power or function
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)

5. EAG
EurAsian Group
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.

6. What normal business practise makes 'Product Division' possible?
disrupt or adversely afftect the business of the bank.
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.

7. FATF Sepcial Recommendation on Terrorist Financing -- SR Four
Report suspicious transactions linked to terrorism.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
Solicits potential customers and issues the credit cards.
tipped off that they are being investigated.

8. FATF Recommendation 38
The International Monetary Fund (IMF) and the world bank conduct the joint program.
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.
People who help move the billions of dollars drug traffickers earn around the world.
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.

9. Vital Service Providers (VSPs)
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
People who help move the billions of dollars drug traffickers earn around the world.
Placement - Layering - Integration.
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.

10. FATF Recommendation 29
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
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.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.

11. Underwriting
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
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.
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.
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'

12. What are included in the Wolfsberg AML Principles on Private Banking?
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
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.
2% - 5% ($590B - $1.5T)

13. What was the target of UN Security Council Resolution 1373?
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
Terrorism and Terrorist Financing
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.

14. Penny Stocks
A professional responsible for the securities portfolio of an individual or institutional investor. In return for a fee - the manager has the responsibility of choosing and managing assets.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
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.
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.

15. In what country is the Egmont Group Secretariat now located?
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.
Canada
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.
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.

16. Many jurisdictions have legislation to ensure that suspects are not ____?
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'.
Person who - for compensation - provides advice on securities and investments and manages client assets.
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.
tipped off that they are being investigated.

17. Operational risks in KYC context relate to...
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
The International Monetary Fund (IMF) and the world bank conduct the joint program.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.

18. FATF Sepcial Recommendation on Terrorist Financing -- SR Three
Processes transactions for merchants who accept credit cards.
Report suspicious transactions linked to terrorism.
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.
Freeze and confiscate terrorist assets.

19. (Stock) Warrants
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.
Placement - Layering - Integration.
Direct or indirect advisor on buying and selling futures or commodity options.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.

20. FATF Recommendation 27
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
The International Monetary Fund (IMF) and the world bank conduct the joint program.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.

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

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22. What is the goal of FSAP?
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
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.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
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.

23. Why is 'Know Your Correspondent Bank' important?
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
foreign correspondent banks
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.

24. GAFISUD
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 contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
Financial Action Task Force on Money Laundering in South America

25. Where is the Art Loss Register found?
www.artloss.com
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.
A record that financial institutions must retain for each cash sale of bank checks - drafts - money orders - cashier's checks and traveller's checks between $3 -000 and $10 -000.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.

26. Portfolio Manager
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
A professional responsible for the securities portfolio of an individual or institutional investor. In return for a fee - the manager has the responsibility of choosing and managing assets.

27. Abusive Squeezes

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28. FATF Recommendation 21
Pouch activity.
Letters Rogatory
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.

29. Money Mules
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.
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.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.

30. In Emerging Money Laundering Risks - what 3 methods are identified as 'Funds Transfers'?
Stored Value Cards - Mobile Payments - Internet Payments.
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.
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
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.

31. Commodity Pool
Combines funds from various members and users them to trade in futures or options contracts.
The opposing part of a transaction or trade.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
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.

32. (Credit card) Acquiring Bank
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 ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
Processes transactions for merchants who accept credit cards.
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.

33. Reverse Flip

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34. Affidavit
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.
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.
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.
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.

35. GIABA
Open and Closed system
Intergovernmental Action Group against Money Laundering in Africa
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
2% - 5% ($590B - $1.5T)

36. When is a jurisdiction considered to be 'ring-fenced'?
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
Foreign Corrupt Practices Act
Processes transactions for merchants who accept credit cards.
A deliberate attempt to interfere with the free and fair operation of the market and create artificial - false or misleading appearances with respect to the price of - or market for a security - commodity or currency.

37. FATF Recommendation 24
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.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
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.

38. Wholesale Banking
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
A record that financial institutions must retain for each cash sale of bank checks - drafts - money orders - cashier's checks and traveller's checks between $3 -000 and $10 -000.
Banking services between merchant banks and other financial institutions.

39. Dormant Account
An account that does not show activity other than the posting of interest or account maintenance fees.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.

40. How is 'Identity theft' often accomplished?
Expatriates sending money back to their home country or by other individuals sending money abroad.
Competent authorities should have powers of subpoena - search and seizure.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.

41. What does FIU do?
Open and Closed system
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
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.
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.

42. What does Financial Sector AssessmentProgram (FSAP) do?
disrupt or adversely afftect the business of the bank.
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
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.
A deliberate attempt to interfere with the free and fair operation of the market and create artificial - false or misleading appearances with respect to the price of - or market for a security - commodity or currency.

43. Identification data
Countries should recognize money laundering as an extraditable offense.
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.
Reliable - independent source of documents - data or information.
a chain-referral scheme.

44. What is one of the Financial Service Authority's (UK) tasks?
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
Financial Action Task Force
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.
To reduce financial crime - including money laundering and terrorit financing.

45. Why is a 'money order' attractive to a money launderer?
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
Take immediate steps to ratify and implement the UN instruments.
www.artloss.com
As a financial institution service that is very vulnerable to money laundering.

46. A 'Cash Letter' can also be referred to as _____.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
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
Pouch activity.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.

47. What is the Serious Organised Crime Agency (SOCA)?
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.
Direct money of Criminal A is sent to foreign bank account of company B. Investment company C is formed as A's country. A is appointed as director of C. C borrows money from B and buys building which is rented to 3rd parties. with rent - C pays off B
The FIU of the UK
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.

48. What is the FCPA primarily known for?
Countering the Financing of Terrorism (Counter Terrorist Financing).
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
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]
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).

49. White-Collar crime

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50. Bust-out
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
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]
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.