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 a Private Investment company (PIC)?
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
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]
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.


2. FATF Recommendation 4
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
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.
Countries should recognize money laundering as an extraditable offense.
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.


3. 'Closed-end Mutual Fund' (Or Comany)

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4. FATF Recommendation 13
It was the first law in any country to make money laundering a crime.
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.
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.


5. The Palemo Convention
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.
The opposing part of a transaction or trade.
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].


6. Basel's 'CDD for Banks' states that the decision to open an account for a PEP should be taken at...
a Sr Management level
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.


7. Who issues the Internationa Narcotics Control Strategy Report (INCSR) and how often?
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.
The US State Dept issues the report annually.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.


8. Wire Transfers
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.
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
People who help move the billions of dollars drug traffickers earn around the world.


9. FATF Recommendation 1
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
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.
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.


10. What must a financial institution do if they have 'Exempt Accounts'?
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).
Confiscation
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
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.


11. FATF's designated transactional threshold for Casinos (including Internet Casinos) is _____.
An introducing broker-dealer with an exclusive written agreement with a Futures Commission Merchant (FCM) that obligates the FCM to assume responsibility for the introducing broker's performance.
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
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 financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.


12. 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.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
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.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.


13. In Emerging Money Laundering Risks - what 3 methods are identified as 'Funds Transfers'?
Stored Value Cards - Mobile Payments - Internet Payments.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
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'.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.


14. Retail Banking
Typical mass-market banking where individual customers use local branches of larger commercial banks.
Banking services between merchant banks and other financial institutions.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.


15. USA Patriot Act Section 312 'Offshore Bank'
A bank whose license has conditions that prohibhit the licensed entity from conducting banking activities with the citizens - or with the local currency - of the country that issued that license.
Expatriates sending money back to their home country or by other individuals sending money abroad.
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.


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

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17. Boiler Room
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
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.
Funds transfers - Shell Corporations - Contractual Transactions.
bear the mark 'APOSTILLE'


18. (Credit Card) Third-Party processor
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.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.


19. Money Mules
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
They can accrue value as the price of the underlying stock rises.
Confiscation
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.


20. FATF Recommendation 19
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.


21. Corporate Bank

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22. Examples of White-collar crime
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.


23. What is one of the cental stragetic tools required for effective action against money laundering?
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
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
Confiscation
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.


24. Counter Party
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
The opposing part of a transaction or trade.
Report suspicious transactions linked to terrorism.
Harmful or Preferrential Tax Regimes.


25. FATF Recommendation 21
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
People who help move the billions of dollars drug traffickers earn around the world.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
Processes transactions for merchants who accept credit cards.


26. Dematerialization of Securities

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27. FATF Recommendation 9
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
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.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.


28. A notary can issue a Apostille but it must be in a country that signed The Hague Convention (1961) and it must ___________. If the notary doesn't understand - find another one.

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29. 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.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
Strengthen customer identification measures in iternational and domestic wire transfers.
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.


30. Abusive Squeezes

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31. 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.
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 a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
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.


32. How is 'Identity theft' often accomplished?
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
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 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 trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.


33. A public perception that a bank is not able to manage its operational risk effectively can...
disrupt or adversely afftect the business of the bank.
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
They can accrue value as the price of the underlying stock rises.
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.


34. What is important about the US Money Laundering Control Act (MCLA)?
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
It was the first law in any country to make money laundering a crime.
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.


35. 'Competent Authorities' refers to _____.
Letters Rogatory
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.


36. Investigative Log
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
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.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.


37. Why do convertible bonds oftern have lower interest rates than non-convertible bonds?
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
Strengthen customer identification measures in iternational and domestic wire transfers.
They can accrue value as the price of the underlying stock rises.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.


38. FATF Recommendation 34
A bank whose license has conditions that prohibhit the licensed entity from conducting banking activities with the citizens - or with the local currency - of the country that issued that license.
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'.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.


39. What is the goal of FSAP?
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).
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.


40. SRO (Self-Regulatory Organizations)
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.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
Penny Stocks
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.


41. The 'Art Loss Register'

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42. Downstream Correspondent Clearer
A Correspondent Banking Client who receives Corresponding Banking services from an institution and itself provides Correspondent Banking services to other financial institutions in the same currency as the account it maintains with the institution.
Strengthen customer identification measures in iternational and domestic wire transfers.
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'
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.


43. Cash Log

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44. Characteristics of an 'Open System Stored Value Card'
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.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
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.


45. Legal Arrangements (Insurance Industry)
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
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]
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.


46. Investment Adviser
Penny Stocks
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
Middle East and North Africa Financial Action Task Force
Person who - for compensation - provides advice on securities and investments and manages client assets.


47. Open System Stored Value Card
Money Laundering and Tax Evasion
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
Reliable - independent source of documents - data or information.
Confiscation


48. FATF Recommendation 29
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
Harmful or Preferrential Tax Regimes.


49. US law prohibhits Foriegn Shell Banks from ____?
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
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
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.
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.


50. FATF Recommendation 22

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