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 the primary use of a 'Mutual Legal Assistance Treaty'?
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
The US State Dept issues the report annually.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.


2. How is 'Legal Risk' defined by the 2001 Basel Due Diligence Principles?
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.
Account established by a domestic banking institution to receive deposits from - make payments on behalf of - or handle other financial transactions for a foreign financial institution - usually in the foreign financial institutions's cureency.
The 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.
Penny Stocks


3. FATF Recommendation 13
Money Laundering and Tax Evasion
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.


4. FATF Recommendation 24
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.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.


5. FATF
Funds transfers - Shell Corporations - Contractual Transactions.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
Financial Action Task Force
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).


6. Transparency International
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.


7. Why do convertible bonds oftern have lower interest rates than non-convertible bonds?
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
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.
Pouch activity.
They can accrue value as the price of the underlying stock rises.


8. UK courts view on 'Suspicion'
Financial Action Task Force on Money Laundering in South America
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.
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
a Sr Management level


9. Three stages of money laundering
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.
Strengthen customer identification measures in iternational and domestic wire transfers.
Placement - Layering - Integration.
Countries should recognize money laundering as an extraditable offense.


10. FATF Recommendation 4
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
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.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.


11. What does Financial Sector AssessmentProgram (FSAP) do?
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
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
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.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.


12. MENAFATF
Middle East and North Africa Financial Action Task Force
no regulatory power or function
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
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]


13. Derivatives
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.


14. FATF Recommendation 9
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
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.
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
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.


15. Penny Stocks
A US Federal Court
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
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.
Middle East and North Africa Financial Action Task Force


16. What is the Serious Organised Crime Agency (SOCA)?
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
The FIU of the UK
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
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.


17. The IMF estimates that laundered funds compromise ______ of the world's GDP
foreign correspondent banks
2% - 5% ($590B - $1.5T)
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
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.


18. FATF Recommendations examples of non-financial businesses and professions
Expatriates sending money back to their home country or by other individuals sending money abroad.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
Freeze and confiscate terrorist assets.
Countries should recognize money laundering as an extraditable offense.


19. May a shell bank maintain a correspondent account with a US bank?
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
No.
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.


20. 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...
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.
Letters Rogatory
Confiscation
that appear to be linked


21. Distribution Channels (Insurance Industry)
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.
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]
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.


22. (Credit Card) Issuing Bank
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
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).
Solicits potential customers and issues the credit cards.
Person who - for compensation - provides advice on securities and investments and manages client assets.


23. Where is the Art Loss Register found?
www.artloss.com
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
As a financial institution service that is very vulnerable to money laundering.


24. Open System Stored Value Card
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
Strengthen customer identification measures in iternational and domestic wire transfers.
Stored Value Cards - Mobile Payments - Internet Payments.


25. What is a Financial Intelligence Unit?
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.


26. Why is a 'money order' attractive to a money launderer?
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
Expatriates sending money back to their home country or by other individuals sending money abroad.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.


27. Apostille

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28. 'Kiting' via credit card
Intergovernmental Action Group against Money Laundering in Africa
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
Harmful or Preferrential Tax Regimes.


29. What is the goal of the Egmont group?

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30. Who issues the Internationa Narcotics Control Strategy Report (INCSR) and how often?
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
The US State Dept issues the report annually.
Expatriates sending money back to their home country or by other individuals sending money abroad.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.


31. Bust-out
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
A market is which securities are bought and sold outside of establisehd securities markets.
www.artloss.com
Penny Stocks


32. Short Sale

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33. Commodity Pool
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.
Combines funds from various members and users them to trade in futures or options contracts.
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
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.


34. What is meant by 'Know Your Customer's customer'?
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
Countering the Financing of Terrorism (Counter Terrorist Financing).
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.


35. 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.
Placement - Layering - Integration.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
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.


36. Investigative Log
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.


37. When is a jurisdiction considered to be 'ring-fenced'?
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
Confiscation
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.


38. What does an Extradition Treaty specify?
Banking services between merchant banks and other financial institutions.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.


39. What are included in the Wolfsberg AML Principles on Private Banking?
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
Direct or indirect advisor on buying and selling futures or commodity options.


40. Reverse Flip

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41. Legal Arrangements (Insurance Industry)
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.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
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]
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.


42. FATF Recommendation 14
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
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.


43. FATF Recommendation 35
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
Impose AML requirements on alternative remittance systems.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.


44. 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
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.
Harmful or Preferrential Tax Regimes.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
If provided for money laundering to be an internationally extraditable offense.


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

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46. What does the 'SEC' (US Securities and Exchange Commission) do?
bear the mark 'APOSTILLE'
People who help move the billions of dollars drug traffickers earn around the world.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
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 was the target of UN Security Council Resolution 1373?
Terrorism and Terrorist 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.
a Sr Management level
Countries should recognize money laundering as an extraditable offense.


48. What is the goal of FSAP?
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
Banking services between merchant banks and other financial institutions.
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.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)


49. OTC markets Over-The-Counter
It conducts investigations in support of a government's confiscation or seizure efforts.
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
A market is which securities are bought and sold outside of establisehd securities markets.


50. Dormant Account
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
An account that does not show activity other than the posting of interest or account maintenance fees.
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
Solicits potential customers and issues the credit cards.