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 13
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
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.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.


2. Under the US Bank Secrecy Act - SAR filings are confidential and the institutions employees cannot ____?

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3. Fraud
Competent authorities should have powers of subpoena - search and seizure.
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
It was the first law in any country to make money laundering a crime.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.


4. 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...
that appear to be linked
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.
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.
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'.


5. FATF Recommendation 26
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.


6. Commodity Trading Advisor
The FIU of the UK
Direct or indirect advisor on buying and selling futures or commodity options.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.


7. What are some of the AML dangers of casino junkets?
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
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.
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
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.


8. OCC Office of the Comptroller of the Currency
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
Intergovernmental Action Group against Money Laundering in Africa
Reliable - independent source of documents - data or information.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.


9. What does FIU do?
Report suspicious transactions linked to terrorism.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
Processes transactions for merchants who accept credit cards.


10. US law prohibhits Foriegn Shell Banks from ____?
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.
A US Federal Court
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.


11. Vital Service Providers (VSPs)
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
Review customer files and conduct random sampling of accounts.
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.


12. How is 'Identity theft' often accomplished?
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
Direct or indirect advisor on buying and selling futures or commodity options.
Open and Closed system
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.


13. Basel committee's 'Customer Due Diligence for Banks' when verifying a unit's compliance with KYC policies and procedures - the home country supervisors or auditors should do what?
Review customer files and conduct random sampling of accounts.
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.
Open and Closed system
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.


14. Boiler Room
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
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.
An electronic quotation system that displays quotes of many securities traded over the counter.


15. What is a 'Trust'?
Solicits potential customers and issues the credit cards.
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.
As a financial institution service that is very vulnerable to money laundering.
Provide mutual legal assistance.


16. FATF Recommendation 3
EurAsian Group
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.


17. What is the goal of the Egmont group?

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18. Identification data
Placement - Layering - Integration.
The FIU of Russia
Reliable - independent source of documents - data or information.
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.


19. 'Loan Back' method. Give example of how it works.

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20. Reverse Flip

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21. 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.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
disrupt or adversely afftect the business of the bank.
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.


22. FATF Recommendation 34
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
Penny Stocks
Review customer files and conduct random sampling of accounts.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.


23. Nostro

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24. May a shell bank maintain a correspondent account with a US bank?
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
No.
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].


25. When was the Offshore Group of Banking Supervisors established? What was the impetus behind its establishment?
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.


26. FATF Recommendation 25
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
Freeze and confiscate terrorist assets.
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.


27. Characteristics of an 'Open System Stored Value Card'
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.
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.
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
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.


28. What is one of the Financial Service Authority's (UK) tasks?
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
To reduce financial crime - including money laundering and terrorit financing.
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.
Competent authorities should have powers of subpoena - search and seizure.


29. What does the 'SEC' (US Securities and Exchange Commission) do?
Middle East and North Africa Financial Action Task Force
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
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.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.


30. Distribution Channels (Insurance Industry)
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]
Placement - Layering - Integration.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.


31. Foriegn Shell Banks are vehicles for ______ & ______?
Money Laundering and Tax Evasion
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.
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.
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.


32. The USA Patriot Act enacted a number of statutory provisions that bear directly on the procedures US financial institutions must follow in connection with their...
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
foreign correspondent banks
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.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.


33. Why does a launderer try to run transactions through a concentration account of a financial institution?
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
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 transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.


34. Example of use of an Apostille
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
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.
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.
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.


35. Investigative Log
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
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.


36. Operational risks in KYC context relate to...
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.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.


37. Commodity
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
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.
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.


38. Common types of 'Derivatives'
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
Futures contracts - forwards - swaps or options.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
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.


39. FATF Recommendation 20
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
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.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
Financial Action Task Force on Money Laundering in South America


40. Margin
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
Open and Closed system
Expatriates sending money back to their home country or by other individuals sending money abroad.


41. The IMF estimates that laundered funds compromise ______ of the world's GDP
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
As a financial institution service that is very vulnerable to money laundering.
2% - 5% ($590B - $1.5T)
Stored Value Cards - Mobile Payments - Internet Payments.


42. How do 'Hedge Funds' operate?

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43. FATF Recommendation 37
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.


44. In Emerging Money Laundering Risks - what 3 methods are identified as 'Funds Transfers'?
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
Stored Value Cards - Mobile Payments - Internet Payments.
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
a Sr Management level


45. Options/Options Contract
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
The right - but not the obligation - to buy or sell a set amount of something - such as a share or commodity - at a set price after a set expiration date.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
Strengthen customer identification measures in iternational and domestic wire transfers.


46. Guaranteed Introducing Broker

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47. Portfolio Manager
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
Expatriates sending money back to their home country or by other individuals sending money abroad.
If provided for money laundering to be an internationally extraditable offense.
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.


48. How is 'Legal Risk' defined by the 2001 Basel Due Diligence Principles?
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
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.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)


49. FATF Recommendation 24
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
Pouch activity.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.


50. 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
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
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.
Harmful or Preferrential Tax Regimes.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.