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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 Sepcial Recommendation on Terrorist Financing -- SR Two
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
Countering the Financing of Terrorism (Counter Terrorist Financing).
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.

2. Characteristics of an 'Open System Stored Value Card'
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.
As a financial institution service that is very vulnerable to money laundering.
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
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.

3. In what country is the Egmont Group Secretariat now located?
Canada
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.

4. Futures Commission Merchant (FCM)
Strengthen customer identification measures in iternational and domestic wire transfers.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
It was the first law in any country to make money laundering a crime.

5. Pink Sheets
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
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.
that appear to be linked
An electronic quotation system that displays quotes of many securities traded over the counter.

6. UK courts view on 'Suspicion'
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
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.
If provided for money laundering to be an internationally extraditable offense.
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.

7. How is 'Legal Risk' defined by the 2001 Basel Due Diligence Principles?
Intergovernmental Action Group against Money Laundering in Africa
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
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.
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.

8. FATF Sepcial Recommendation on Terrorist Financing -- SR Seven
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
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.
Strengthen customer identification measures in iternational and domestic wire transfers.

9. Why is 'refining' critical to a money launderer's efforts?
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
Foreign Corrupt Practices Act
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.
To reduce financial crime - including money laundering and terrorit financing.

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

11. What must a financial institution do if they have 'Exempt Accounts'?
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
Report suspicious transactions linked to terrorism.
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.
Confiscation

12. FATF Sepcial Recommendation on Terrorist Financing -- SR One
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.
no regulatory power or function
Take immediate steps to ratify and implement the UN instruments.
Applied by an authority - it is a special seal which certifies that a document is a true copy of an original. However - it does not and cannot speak to the validity of the document's content.

13. FATF Recommendation 7

14. What can result from on institution's disregard for the Basel Due Diligence Principle?
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.
Person who - for compensation - provides advice on securities and investments and manages client assets.
Letters Rogatory
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.

15. How do most governments view Private Banking?
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
As a financial institution service that is very vulnerable to money laundering.
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
Harmful or Preferrential Tax Regimes.

16. What is the FCPA primarily known for?
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).
The US State Dept issues the report annually.
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.
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.

17. FATF Recommendation 40
Reliable - independent source of documents - data or information.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
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.

18. Market Manipulation
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.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
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
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].

19. Mutual Fund
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
Stored Value Cards - Mobile Payments - Internet Payments.
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.
The opposing part of a transaction or trade.

20. How is 'Identity theft' often accomplished?
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.
Combines funds from various members and users them to trade in futures or options contracts.
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.

21. FATF Recommendation 18
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.
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
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.

22. What are some of the AML dangers of casino junkets?
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.
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.
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.
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.

23. FATF Recommendation 31
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 ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
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
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.

24. FATF Recommendation 15
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]
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
Provide mutual legal assistance.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.

25. 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.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
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.

26. Portfolio Manager
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.
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.
Pouch activity.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.

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

28. What were recently identified as Emerging Money Laundering risks?
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.
Funds transfers - Shell Corporations - Contractual Transactions.
Intergovernmental Action Group against Money Laundering in Africa
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.

29. Who are the parties involved in a trust?
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
Financial Action Task Force
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
Open and Closed system

30. Three stages of money laundering
Combines funds from various members and users them to trade in futures or options contracts.
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 establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
Placement - Layering - Integration.

31. USA Patriot Act Section 312 'Offshore Bank'
Take immediate steps to ratify and implement the UN instruments.
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 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.
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.

32. Cash Letter
Penny Stocks
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.

33. Open System Stored Value Card
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
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.

34. (Credit Card) Issuing Bank
Solicits potential customers and issues the credit cards.
have in place compulsory currency reporting requirements.
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.
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.

35. Vital Service Providers (VSPs)
no regulatory power or function
People who help move the billions of dollars drug traffickers earn around the world.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
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.

36. Foriegn Shell Banks are vehicles for ______ & ______?
An account that does not show activity other than the posting of interest or account maintenance fees.
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).
Money Laundering and Tax Evasion
2% - 5% ($590B - $1.5T)

37. What normal business practise makes 'Product Division' possible?
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.

38. What is a Private Investment company (PIC)?
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
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.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
The International Monetary Fund (IMF) and the world bank conduct the joint program.

39. FATF Recommendation 4
that appear to be linked
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.
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.

40. Legal Arrangements (Insurance Industry)
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
The FIU of the UK
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 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.

41. Investigative Log
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
that appear to be linked

42. What does the 'SEC' (US Securities and Exchange Commission) do?
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
Impose AML requirements on alternative remittance systems.
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.

43. Fraud
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
Use of electronic clearing houses to facilitate electronic transfers of money that complete transactions between two parties where the buyer receives securities - goods - services etc. in exchange for the money.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
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).

44. What does the principal US money laundering law look for before implementing its 'Extraterritorial Reach'?
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
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
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

45. Affidavit
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.
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.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.

46. Downstream Correspondent Clearer
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
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.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.

47. FATF Recommendation 9
The FIU of Russia
Foreign Corrupt Practices Act
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.

48. Why is 'Know Your Correspondent Bank' important?
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.
Intergovernmental Action Group against Money Laundering in Africa
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
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.

49. Distribution Channels (Insurance Industry)
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
bear the mark 'APOSTILLE'
www.artloss.com
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]

50. In Emerging Money Laundering Risks - what 3 methods are identified as 'Funds Transfers'?
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
Stored Value Cards - Mobile Payments - Internet Payments.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
Money Laundering and Tax Evasion