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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. When is a jurisdiction considered to be 'ring-fenced'?
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
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.
It was the first law in any country to make money laundering a crime.

2. FATF Recommendation 20
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.
no regulatory power or function
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.

3. FATF Sepcial Recommendation on Terrorist Financing -- SR Seven
that appear to be linked
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
The nature of the request - the relevant criminal charges in the requesting country - the legal provision under which the request is made - and the information that is sought.
Strengthen customer identification measures in iternational and domestic wire transfers.

4. Who appear to be predominant users of hawalas and other alternative remittance systems?
Expatriates sending money back to their home country or by other individuals sending money abroad.
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.
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'
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.

5. FATF Recommendation 39
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'
Intergovernmental Action Group against Money Laundering in Africa
Countries should recognize money laundering as an extraditable offense.
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.

6. 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...
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).
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.
foreign correspondent banks
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.

7. Common types of 'Derivatives'
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
Futures contracts - forwards - swaps or options.
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.

8. What are some of the AML dangers of casino junkets?
Take immediate steps to ratify and implement the UN instruments.
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.
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
A market is which securities are bought and sold outside of establisehd securities markets.

9. GIABA
Intergovernmental Action Group against Money Laundering in Africa
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.
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
It was the first law in any country to make money laundering a crime.

10. In Emerging Money Laundering Risks - what 3 methods are identified as 'Funds Transfers'?
A bank which uses the services of another bank - such as check clearing - wire transfers - etc. The bank providing the service is the 'Correspondent Bank'
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.
Stored Value Cards - Mobile Payments - Internet Payments.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.

11. FATF Recommendation 31
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.
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.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.

12. FATF Sepcial Recommendation on Terrorist Financing -- SR Five

13. FATF Recommendation 3
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
Penny Stocks
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.
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.

14. (Stock) Warrants
no regulatory power or function
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
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.

15. Basel's 'CDD for Banks' states that the decision to open an account for a PEP should be taken at...
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
a Sr Management level
No.
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.

16. Identification data
Reliable - independent source of documents - data or information.
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.

17. Why is a 'money order' attractive to a money launderer?
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.
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.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.

18. 'Commission Rogatoire' known in English as?
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'.
Letters Rogatory
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
As a financial institution service that is very vulnerable to money laundering.

19. 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...
no regulatory power or function
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.

20. FATF Recommendation 37
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.
EurAsian Group
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]
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.

21. FATF Recommendation 8
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.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
EurAsian Group
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.

22. What is important about the US Money Laundering Control Act (MCLA)?
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
It was the first law in any country to make money laundering a crime.
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.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.

23. FATF Recommendation 27
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
a chain-referral scheme.
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
The world's largest private DB of stolen art.

24. Why does a launderer try to run transactions through a concentration account of a financial institution?
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.
www.artloss.com
bear the mark 'APOSTILLE'
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.

25. What tend to be the markings of Private Banking transactions?
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.

26. In Emerging Money Laundering Risks - what 3 areas are associated with 'Contractual Transactions'?
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.
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
Typical mass-market banking where individual customers use local branches of larger commercial banks.

27. Arrest Warrant
Review customer files and conduct random sampling of accounts.
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.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
a Sr Management level

28. What do boiler room salespeople typically do?

29. Futures Commission Merchant (FCM)
Letters Rogatory
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 firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
Freeze and confiscate terrorist assets.

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

31. Characteristics of an 'Open System Stored Value Card'
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).
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.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.

32. A pyramid scheme is also called...
a chain-referral scheme.
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)

33. FATF Sepcial Recommendation on Terrorist Financing -- SR Four
Report suspicious transactions linked to terrorism.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities 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.

34. FATF Recommendation 13
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
disrupt or adversely afftect the business of the bank.
Terrorism and Terrorist Financing
They can accrue value as the price of the underlying stock rises.

35. Investment Adviser
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.
Person who - for compensation - provides advice on securities and investments and manages client assets.
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.
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.

36. (Credit Card) Third-Party processor
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
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.

37. Wire Transfers
Financial Action Task Force
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
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.
The world's largest private DB of stolen art.

38. What normal business practise makes 'Product Division' possible?
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
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.

39. Why is understanding 'Product Diversion' important to the AML investigator?
Their financial institution may - wittingly or unwittingly - handle the proceeds of this crime while believing it is serving a legitimate client with major account balances.
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
Canada
People who help move the billions of dollars drug traffickers earn around the world.

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

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

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

43. Convertible Preferred
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
Review customer files and conduct random sampling of accounts.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
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. Free Look Period
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
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 contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.

45. Mutual Fund
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
Countering the Financing of Terrorism (Counter Terrorist Financing).
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
As a financial institution service that is very vulnerable to money laundering.

46. FATF Recommendation 7

47. FATF Recommendation 32
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
Intergovernmental Action Group against Money Laundering in Africa
Competent authorities should have powers of subpoena - search and seizure.
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.

48. When was the Offshore Group of Banking Supervisors established? What was the impetus behind its establishment?
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.

49. 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.
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).
Countries should recognize money laundering as an extraditable offense.
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.

50. USA Patriot Act Section 312 'Offshore Bank'
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
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.
Canada
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.