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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 Recommendation 4
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
no regulatory power or function
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
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.

2. What can result from on institution's disregard for the Basel Due Diligence Principle?
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.

3. What is the goal of the Egmont group?

4. Commodity Trading Advisor
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
Direct or indirect advisor on buying and selling futures or commodity options.
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.

5. 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.
To provide a forum for FIU's (Financial Intelligence Unit) to improve support to their respective national AML progrmans and development protocols for the sharing of information.
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.
Middle East and North Africa Financial Action Task Force

6. What is one of the cental stragetic tools required for effective action against money laundering?
Confiscation
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
foreign correspondent banks
Reliable - independent source of documents - data or information.

7. What is a Financial Intelligence Unit?
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
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
The International Monetary Fund (IMF) and the world bank conduct the joint program.

8. What is private investment company also known as?
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.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
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.

9. Variable Annuity
No.
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.
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
It was the first law in any country to make money laundering a crime.

10. FATF Recommendation 7

11. FATF Recommendation 12
Banking services between merchant banks and other financial institutions.
A market is which securities are bought and sold outside of establisehd securities markets.
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 CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.

12. GAFISUD
Financial Action Task Force on Money Laundering in South America
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.
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.
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.

13. Futures Commission Merchant (FCM)
Confiscation
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
foreign correspondent banks
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.

14. Commodity Pool
a Sr Management level
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.
It was the first law in any country to make money laundering a crime.
Combines funds from various members and users them to trade in futures or options contracts.

15. What do boiler room salespeople typically do?

16. A 'panzi' scheme is named for whom?
People who help move the billions of dollars drug traffickers earn around the world.
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
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.

17. 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
Harmful or Preferrential Tax Regimes.
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
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'.
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.

18. Why do convertible bonds oftern have lower interest rates than non-convertible bonds?
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
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.
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).
They can accrue value as the price of the underlying stock rises.

19. Investment Adviser
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
Person who - for compensation - provides advice on securities and investments and manages client assets.
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
The opposing part of a transaction or trade.

20. 'Commission Rogatoire' known in English as?
Report suspicious transactions linked to terrorism.
Letters Rogatory
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.
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.

21. FATF Recommendation 10
The process of agreeing to purchase a new issue of securities from an issuer and distribute it to investors. The underwriter makes a profit between the price paid to the issuer and the public offering price.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data

22. What was the effect of the 1988 Vienna Convention as it relates to extradtition?
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.
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
If provided for money laundering to be an internationally extraditable offense.

23. FATF Recommendation 17
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.
Money Laundering and Tax Evasion
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
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.

24. Investigative Log
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.
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
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.

25. Respondent Bank

26. Dormant Account
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).
An account that does not show activity other than the posting of interest or account maintenance fees.
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.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.

27. What is a Private Investment company (PIC)?
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
Issue and cancel securities certificates to reflect chagnes in ownership - act as an intermediary for the issuing company - and hanlde lost - stolen or destroyed certificates.
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.

28. Fraud
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
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.
a Sr Management level
Absolutely NOT. If the decision is based purely on profile - then you are discriminating. you need to file such reports on the ACTIVITY especially if it differs from the 'normal and expected' as reflected in the customer profile.

29. Money Mules
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
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.
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.

30. What are the two types of Stored Value Cards?
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
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.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
Open and Closed system

31. Margin
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
Countering the Financing of Terrorism (Counter Terrorist Financing).
have in place compulsory currency reporting requirements.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.

32. FATF Recommendation 39
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.
Countries should recognize money laundering as an extraditable offense.
a chain-referral scheme.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.

33. 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.
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.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.

34. Why does a launderer try to run transactions through a concentration account of a financial institution?
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
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.
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.

35. OTC markets Over-The-Counter
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
A market is which securities are bought and sold outside of establisehd securities markets.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.

36. Pink Sheets
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
An electronic quotation system that displays quotes of many securities traded over the counter.
Processes transactions for merchants who accept credit cards.
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)

37. FATF Recommendation 3
Reliable - independent source of documents - data or information.
The opposing part of a transaction or trade.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.

38. FATF Recommendation 25
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
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.
Provide mutual legal assistance.
Financial Action Task Force on Money Laundering in South America

39. Cash Equivalent

40. Boiler Room
Typical mass-market banking where individual customers use local branches of larger commercial banks.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
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.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.

41. What does FIU do?
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.
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
Strengthen customer identification measures in iternational and domestic wire transfers.
An electronic quotation system that displays quotes of many securities traded over the counter.

42. FATF Recommendation 14
Reliable - independent source of documents - data or information.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
Typical mass-market banking where individual customers use local branches of larger commercial banks.

43. Characteristics of an 'Open System Stored Value Card'
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
Reliable - independent source of documents - data or information.
Canada
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.

44. MENAFATF
People who help move the billions of dollars drug traffickers earn around the world.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
Middle East and North Africa Financial Action Task Force
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.

45. What is the Wolfsberg group?
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.

46. How are 'Predicate Crimes' sometimes identified?

47. FATF Recommendation 33
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
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 CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.

48. The IMF estimates that laundered funds compromise ______ of the world's GDP
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
2% - 5% ($590B - $1.5T)
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
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.

49. Why is 'refining' critical to a money launderer's efforts?
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
Expatriates sending money back to their home country or by other individuals sending money abroad.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.

50. 'Competent Authorities' refers to _____.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
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.