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. FATF Recommendation 2
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
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.
Direct or indirect advisor on buying and selling futures or commodity options.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.


2. Why do convertible bonds oftern have lower interest rates than non-convertible bonds?
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.
They can accrue value as the price of the underlying stock rises.
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
Impose AML requirements on alternative remittance systems.


3. 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...
Strengthen customer identification measures in iternational and domestic wire transfers.
no regulatory power or function
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.
Penny Stocks


4. FATF Recommendation 8
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.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
Financial Action Task Force


5. 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
Placement - Layering - Integration.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
Harmful or Preferrential Tax Regimes.


6. FATF Sepcial Recommendation on Terrorist Financing -- SR Eight
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.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
foreign correspondent banks
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.


7. When was the Offshore Group of Banking Supervisors established? What was the impetus behind its establishment?
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
Open and Closed system
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.


8. Why is understanding 'Product Diversion' important to the AML investigator?
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.
As a financial institution service that is very vulnerable to money laundering.
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.
tipped off that they are being investigated.


9. Wholesale Banking
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
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.
Letters Rogatory


10. Who issues the Internationa Narcotics Control Strategy Report (INCSR) and how often?
The US State Dept issues the report annually.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
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.
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'


11. What is one of the Financial Service Authority's (UK) tasks?
Financial Action Task Force on Money Laundering in South America
To reduce financial crime - including money laundering and terrorit financing.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.


12. How are 'Predicate Crimes' sometimes identified?

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13. SRO (Self-Regulatory Organizations)
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.
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
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.
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.


14. Why is it imperative to have a strong Know Your Employee program?
Financial Action Task Force
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.


15. FATF's designated transactional threshold for Delaers is Precious metals and / or Precious Stones is _____.
They can accrue value as the price of the underlying stock rises.
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.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
a chain-referral scheme.


16. Money Mules
As a financial institution service that is very vulnerable to money laundering.
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 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.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.


17. FATF Recommendation 21
Financial Action Task Force on Money Laundering in South America
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
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.
No.


18. Basel's 'CDD for Banks' states that the decision to open an account for a PEP should be taken at...
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.
Terrorism and Terrorist Financing
Harmful or Preferrential Tax Regimes.
a Sr Management level


19. What is the aim of Joint Money Laundering Steering Group? (UK)
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.


20. Variable Annuity
Expatriates sending money back to their home country or by other individuals sending money abroad.
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.
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 International Monetary Fund (IMF) and the world bank conduct the joint program.


21. In what country is the Egmont Group Secretariat now located?
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.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
Canada


22. What does FIU do beyond what FIU does?

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23. What can result from on institution's disregard for the Basel Due Diligence Principle?
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
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.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
Terrorism and Terrorist Financing


24. When is a jurisdiction considered to be 'ring-fenced'?
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
Person who - for compensation - provides advice on securities and investments and manages client assets.
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]


25. 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...
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).
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
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.
that appear to be linked


26. FATF Recommendation 15
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
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).
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.


27. Corporate Bank

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28. Who appear to be predominant users of hawalas and other alternative remittance systems?
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
Banking services between merchant banks and other financial institutions.
Expatriates sending money back to their home country or by other individuals sending money abroad.
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.


29. FATF Sepcial Recommendation on Terrorist Financing -- SR Seven
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
It conducts investigations in support of a government's confiscation or seizure efforts.
Expatriates sending money back to their home country or by other individuals sending money abroad.
Strengthen customer identification measures in iternational and domestic wire transfers.


30. Three stages of money laundering
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
Placement - Layering - Integration.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.


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

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32. MENAFATF
It conducts investigations in support of a government's confiscation or seizure efforts.
Middle East and North Africa Financial Action Task Force
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.


33. Nostro

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34. Investment Adviser
Person who - for compensation - provides advice on securities and investments and manages client assets.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
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.
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.


35. FATF Recommendation 28
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
Letters Rogatory
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.
Competent authorities should have powers of subpoena - search and seizure.


36. CFT
Countries should recognize money laundering as an extraditable offense.
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Expatriates sending money back to their home country or by other individuals sending money abroad.
Countering the Financing of Terrorism (Counter Terrorist Financing).


37. FATF Sepcial Recommendation on Terrorist Financing -- SR Six
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
Impose AML requirements on alternative remittance systems.
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.
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.


38. What the primary objectives of Offshore Group of Banking Supervisors?
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
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.
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
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.


39. Vital Service Providers (VSPs)
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
have in place compulsory currency reporting requirements.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
People who help move the billions of dollars drug traffickers earn around the world.


40. What is the goal of the Egmont group?

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41. What is a 'Trust'?
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.
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.
Middle East and North Africa 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.


42. Abusive Squeezes

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43. 'Coucil of Europe Convention on Laundering - Search - Seizure and Confiscation of the Proceeds from Crime' is known for what?
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
Middle East and North Africa Financial Action Task Force
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].


44. Moneyval
The possibility that lawsuits adverse judgements or contracts that turn out to be unenforceable can disrupt or adversely affect the operatinos or condition of a financial siutation.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
The world's largest private DB of stolen art.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism


45. FATF Recommendation 17
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
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.
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.
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).


46. The Palemo Convention
Terrorism and Terrorist Financing
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
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.


47. Underwriting
Open and Closed system
A co-operative property seller agrees to sell home at a well-below market reported price - then accepts the difference 'under the table'. When launderer later sells house - he recognizes 'gain' and all funds appear legitimate as it sold at market.
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.
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.


48. What was the target of UN Security Council Resolution 1373?
As 'felonies' or 'all offenses in the criminal code'.
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.
If provided for money laundering to be an internationally extraditable offense.
Terrorism and Terrorist Financing


49. What does the principal US money laundering law look for before implementing its 'Extraterritorial Reach'?
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
no regulatory power or function
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
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.


50. FATF Recommendation 33
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.
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
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.
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.