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Certified Anti Money Laundering Specialist Cams

Instructions:

Answer 50 questions in 15 minutes.
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Match each statement with the correct term.
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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. Common types of 'Derivatives'
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
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
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
Futures contracts - forwards - swaps or options.

2. In what country is the Egmont Group Secretariat now located?
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
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.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
Canada

3. FATF Recommendation 6
The opposing part of a transaction or trade.
Foreign Corrupt Practices Act
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
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.

4. What tend to be the markings of Private Banking transactions?
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
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.
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.
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.

5. Abusive Squeezes

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6. Who conducts the Financial Sector Assessment Program (FSAP)?
The world's largest private DB of stolen art.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
The International Monetary Fund (IMF) and the world bank conduct the joint program.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.

7. FATF Recommendation 8
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
No.
Harmful or Preferrential Tax Regimes.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.

8. FATF
Financial Action Task Force
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.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
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.

9. What is the Federal Service for Financial Monitoring?
The FIU of Russia
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.
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 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.

10. US law prohibhits Foriegn Shell Banks from ____?
Impose AML requirements on alternative remittance systems.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
Funds transfers - Shell Corporations - Contractual Transactions.

11. What was the target of UN Security Council Resolution 1267?
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
Money Laundering and Tax Evasion
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.
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization

12. Why is 'Know Your Customer's Customer' important?
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
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.
Open and Closed system

13. FATF Recommendation 28
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
disrupt or adversely afftect the business of the bank.
foreign correspondent banks
Competent authorities should have powers of subpoena - search and seizure.

14. 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...
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.
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
foreign correspondent banks

15. A 'Cash Letter' can also be referred to as _____.
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.
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.
a chain-referral scheme.
Pouch activity.

16. Why does a launderer try to run transactions through a concentration account of a financial institution?
Strengthen customer identification measures in iternational and domestic wire transfers.
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.
Countering the Financing of Terrorism (Counter Terrorist Financing).
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.

17. What is the FCPA primarily known for?
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'
tipped off that they are being investigated.
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).
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.

18. What can result from on institution's disregard for the Basel Due Diligence Principle?
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.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
tipped off that they are being investigated.

19. What is the Wolfsberg group?
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
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'.
An electronic quotation system that displays quotes of many securities traded over the counter.
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.

20. Structuring is a common technique in jurisdictions that...
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
have in place compulsory currency reporting requirements.
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.
Middle East and North Africa Financial Action Task Force

21. Commodity Trading Advisor
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
Direct or indirect advisor on buying and selling futures or commodity options.

22. FATF Recommendation 24
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
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.
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.

23. What do boiler room salespeople typically sell?
Penny Stocks
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).
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 CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.

24. 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...
Freeze and confiscate terrorist assets.
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 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).
no regulatory power or function

25. 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.
As 'felonies' or 'all offenses in the criminal code'.
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 merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.

26. FATF Recommendation 18
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
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.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
As a financial institution service that is very vulnerable to money laundering.

27. Mutual Fund
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
Futures contracts - forwards - swaps or options.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.

28. FATF Recommendation 4
Strengthen customer identification measures in iternational and domestic wire transfers.
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
Confiscation

29. Example of use of an Apostille
If provided for money laundering to be an internationally extraditable offense.
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).
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
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.

30. FATF Sepcial Recommendation on Terrorist Financing -- SR Two
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
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).
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
An electronic quotation system that displays quotes of many securities traded over the counter.

31. Credit Card Associations
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
Product is purchsed with terms that it is going to foreign country A. While in transit - the product is diverted back to originating country or to another foreign market where the greatly discounted price provides for extreme profits.
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.

32. What is the significance of 'Non-Financial Trades and Businesses' in realtion to Money Laundering?
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.

33. What is the aim of Joint Money Laundering Steering Group? (UK)
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
Harmful or Preferrential Tax Regimes.
As a financial institution service that is very vulnerable to money laundering.
Solicits potential customers and issues the credit cards.

34. Wholesale Banking
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
Stored Value Cards - Mobile Payments - Internet Payments.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
Banking services between merchant banks and other financial institutions.

35. What is important about the US Money Laundering Control Act (MCLA)?
It was the first law in any country to make money laundering a crime.
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.
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.
Report suspicious transactions linked to terrorism.

36. What was the effect of the 1988 Vienna Convention as it relates to extradtition?
Funds transfers - Shell Corporations - Contractual Transactions.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
If provided for money laundering to be an internationally extraditable offense.

37. FATF Sepcial Recommendation on Terrorist Financing -- SR Eight
Solicits potential customers and issues the credit cards.
Terrorism and Terrorist Financing
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.

38. Why is a 'money order' attractive to a money launderer?
People who help move the billions of dollars drug traffickers earn around the world.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
Intergovernmental Action Group against Money Laundering in Africa
Because it represents funds drawn on the account of a financial institution and not on a particular individual.

39. How does the Egmont group help its members?
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.
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.
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
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.

40. FATF Sepcial Recommendation on Terrorist Financing -- SR Four
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 apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
Report suspicious transactions linked to terrorism.
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.

41. Options/Options Contract
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.
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.
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
that appear to be linked

42. Legal Arrangements (Insurance Industry)
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
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]
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.

43. What is a 'NCCT'?
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
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.
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.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.

44. What is the goal of the Egmont group?

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45. 'Coucil of Europe Convention on Laundering - Search - Seizure and Confiscation of the Proceeds from Crime' is known for what?
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.
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].
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.
If provided for money laundering to be an internationally extraditable offense.

46. How does 'Product Diversion' work?
Product is purchsed with terms that it is going to foreign country A. While in transit - the product is diverted back to originating country or to another foreign market where the greatly discounted price provides for extreme profits.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
Open and Closed system
Countries should recognize money laundering as an extraditable offense.

47. Margin
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
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.
Terrorism and Terrorist Financing

48. Dormant Account
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).
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.
An account that does not show activity other than the posting of interest or account maintenance fees.
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.

49. What is private investment company also known as?
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.
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.
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 corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.

50. Counter Party
The opposing part of a transaction or trade.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
The world's largest private DB of stolen art.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.