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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. FATF Recommendation 38
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.
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.
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.
People who help move the billions of dollars drug traffickers earn around the world.

2. Transparency International
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
www.artloss.com
Countries should recognize money laundering as an extraditable offense.
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'

3. FATF Recommendation 11
Report suspicious transactions linked to terrorism.
Financial institutions should pay special attention to (and examine & document) complex - unusual large transactions - and all transactions which have no apparent economic or lawful purpose.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
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.

4. FATF Recommendation 36
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.
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]
Provide mutual legal assistance.
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.

5. Who appoints a 'Federal Receiver' (US)?
An electronic quotation system that displays quotes of many securities traded over the counter.
A US Federal Court
Open and Closed system
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.

6. FATF Recommendation 7
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.
Person who - for compensation - provides advice on securities and investments and manages client assets.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
a chain-referral scheme.

7. FATF Recommendation 23
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.
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.
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 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.

8. Operational risks in KYC context relate to...
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
Funds transfers - Shell Corporations - Contractual Transactions.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.

9. Mutual Fund
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.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
Terrorism and Terrorist Financing
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.

10. Behaviour detection
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.

11. Wholesale Banking
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
Banking services between merchant banks and other financial institutions.
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.
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.

12. Three stages of money laundering
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.
Placement - Layering - Integration.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.

13. What is the aim of Joint Money Laundering Steering Group? (UK)
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
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.
have in place compulsory currency reporting requirements.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws

14. What is a 'Trust'?
The US State Dept issues the report annually.
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.
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
Report suspicious transactions linked to terrorism.

15. Corporate Bank
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
Solicits potential customers and issues the credit cards.
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.

16. What is the Federal Service for Financial Monitoring?
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
The FIU of Russia
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
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.

17. FATF Recommendation 2
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
No.
no regulatory power or function
Take immediate steps to ratify and implement the UN instruments.

18. What is the primary use of a 'Mutual Legal Assistance Treaty'?
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
Expatriates sending money back to their home country or by other individuals sending money abroad.

19. Common types of 'Derivatives'
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
Futures contracts - forwards - swaps or options.

20. Short Sale
It conducts investigations in support of a government's confiscation or seizure efforts.
Direct or indirect advisor on buying and selling futures or commodity options.
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.
Review customer files and conduct random sampling of accounts.

21. Why is a 'money order' attractive to a money launderer?
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
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.
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.

22. FATF Recommendation 16
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
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.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
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).

23. Under the US Bank Secrecy Act - SAR filings are confidential and the institutions employees cannot ____?
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
Money Laundering and Tax Evasion
Financial Action Task Force on Money Laundering in South America
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.

24. What do boiler room salespeople typically do?
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
People who help move the billions of dollars drug traffickers earn around the world.
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.

25. FATF Sepcial Recommendation on Terrorist Financing -- SR Four
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
Report suspicious transactions linked to terrorism.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
Foreign Corrupt Practices Act

26. White-Collar crime
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
The world's largest private DB of stolen art.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.

27. Pink Sheets
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
Reliable - independent source of documents - data or information.
An electronic quotation system that displays quotes of many securities traded over the counter.

28. What are included in the Wolfsberg AML Principles on Private Banking?
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.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
Confiscation
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.

29. Why does a launderer try to run transactions through a concentration account of a financial institution?
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
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.
Impose AML requirements on alternative remittance systems.
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.

30. 'Commission Rogatoire' known in English as?
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
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.
Letters Rogatory
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.

31. 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.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
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).
An electronic quotation system that displays quotes of many securities traded over the counter.

32. How is 'Legal Risk' defined by the 2001 Basel Due Diligence Principles?
Provide mutual legal assistance.
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.
It conducts investigations in support of a government's confiscation or seizure efforts.
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.

33. Who are the parties involved in a trust?
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
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'
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
It was the first law in any country to make money laundering a crime.

34. FATF Recommendation 25
People who help move the billions of dollars drug traffickers earn around the world.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
The FIU of Russia
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.

35. What is the FCPA primarily known for?
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.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
It conducts investigations in support of a government's confiscation or seizure efforts.
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).

36. Commodity
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
A market is which securities are bought and sold outside of establisehd securities markets.
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.

37. FATF Recommendation 22
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
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.
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.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.

38. What is important about the US Money Laundering Control Act (MCLA)?
Placement - Layering - Integration.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
Reliable - independent source of documents - data or information.
It was the first law in any country to make money laundering a crime.

39. FATF's designated transactional threshold for Casinos (including Internet Casinos) is _____.
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
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.

40. Guaranteed Introducing Broker
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
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.
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.
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.

41. What is the Serious Organised Crime Agency (SOCA)?
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.
The FIU of the UK
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
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.

42. Where is the Art Loss Register found?
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
Confiscation
www.artloss.com
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.

43. FATF Recommendation 39
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.
Countries should recognize money laundering as an extraditable offense.
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.
www.artloss.com

44. Boiler Room
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
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
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.
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.

45. USA Patriot Act Section 312 'Offshore Bank'
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
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.
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.

46. Counter Party
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
The opposing part of a transaction or trade.

47. Cash Log
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.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.

48. What is meant by 'Know Your Correspondent Bank'?
tipped off that they are being investigated.
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.
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
Provide mutual legal assistance.

49. GIABA
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
Intergovernmental Action Group against Money Laundering in Africa
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.
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.

50. Distribution Channels (Insurance Industry)
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
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]
Money Laundering and Tax Evasion
No.

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