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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. OCC Office of the Comptroller of the Currency
Open and Closed system
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
Placement - Layering - Integration.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.

2. Portfolio Manager
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.
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
Canada
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.

3. May a shell bank maintain a correspondent account with a US bank?
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
No.
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
Penny Stocks

4. What is the goal of FSAP?
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Take immediate steps to ratify and implement the UN instruments.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.

5. In Emerging Money Laundering Risks - what 3 methods are identified as 'Funds Transfers'?
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.
Money Laundering and Tax Evasion
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.
Stored Value Cards - Mobile Payments - Internet Payments.

6. How does the Egmont group help its members?
foreign correspondent banks
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.
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.

7. 'Introducing Broker-Dealers in Commodities' (IB-C)

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8. What is meant by 'Know Your Correspondent Bank'?

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9. GIABA
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 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.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
Intergovernmental Action Group against Money Laundering in Africa

10. In Emerging Money Laundering Risks - what 3 areas are associated with 'Contractual Transactions'?
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
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.
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
Stored Value Cards - Mobile Payments - Internet Payments.

11. What is important about the US Money Laundering Control Act (MCLA)?
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.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
It was the first law in any country to make money laundering a crime.

12. EAG
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
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.
EurAsian Group
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.

13. FATF
Financial Action Task Force
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
It conducts investigations in support of a government's confiscation or seizure efforts.
To reduce financial crime - including money laundering and terrorit financing.

14. Why is 'refining' critical to a money launderer's efforts?
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
The International Monetary Fund (IMF) and the world bank conduct the joint program.

15. Market Manipulation
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
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.
foreign correspondent banks
disrupt or adversely afftect the business of the bank.

16. 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?
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
Typical mass-market banking where individual customers use local branches of larger commercial banks.
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.
Review customer files and conduct random sampling of accounts.

17. Account Monitoring Order (UK and several other countries)
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
An electronic quotation system that displays quotes of many securities traded over the counter.
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.
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

18. Characteristics of an 'Open System Stored Value Card'
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
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.
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
The FIU of the UK

19. Wholesale Banking
The US State Dept issues the report annually.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
A 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).
Banking services between merchant banks and other financial institutions.

20. Agent (Insurance Industry)
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
Direct or indirect advisor on buying and selling futures or commodity options.
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
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.

21. FATF Sepcial Recommendation on Terrorist Financing -- SR Two
foreign correspondent banks
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
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.
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.

22. FATF Recommendation 26
To reduce financial crime - including money laundering and terrorit financing.
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.

23. MENAFATF
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
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.
Middle East and North Africa Financial Action Task Force

24. Retail Banking
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
Typical mass-market banking where individual customers use local branches of larger commercial banks.
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
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.

25. Who appoints a 'Federal Receiver' (US)?
Intergovernmental Action Group against Money Laundering in Africa
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.
A US Federal Court
An account that does not show activity other than the posting of interest or account maintenance fees.

26. When is a jurisdiction considered to be 'ring-fenced'?
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.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.

27. FATF Recommendation 18
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 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.
2% - 5% ($590B - $1.5T)
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.

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.
It was the first law in any country to make money laundering a crime.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)

29. Bust-out
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.

30. 'Open-end Mutual Fund' (or Company)

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31. Investment Adviser
Person who - for compensation - provides advice on securities and investments and manages client assets.
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
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.
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.

32. A pyramid scheme is also called...
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
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
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.
a chain-referral scheme.

33. FATF Recommendation 21
disrupt or adversely afftect the business of the bank.
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.
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.

34. What was the target of UN Security Council Resolution 1373?
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.
Terrorism and Terrorist Financing
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 market is which securities are bought and sold outside of establisehd securities markets.

35. FATF Recommendation 3
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
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
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.

36. 'Kiting' via credit card
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.
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.
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.

37. The IMF estimates that laundered funds compromise ______ of the world's GDP
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
2% - 5% ($590B - $1.5T)
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]

38. The Vienns Convention
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].

39. Identification data
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.
Review customer files and conduct random sampling of accounts.
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.
Reliable - independent source of documents - data or information.

40. According to FATF - financial transactions above a designated threshold may include situations where the transaction takes place in a single operation or in several operations...
that appear to be linked
a chain-referral scheme.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
disrupt or adversely afftect the business of the bank.

41. What does the principal US money laundering law look for before implementing its 'Extraterritorial Reach'?
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
An account that does not show activity other than the posting of interest or account maintenance fees.
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

42. Who are the parties involved in a trust?
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 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).
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
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).

43. What does the 'SEC' (US Securities and Exchange Commission) do?
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.
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.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.

44. 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.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
Foreign Corrupt Practices Act
have in place compulsory currency reporting requirements.

45. What are some of the AML dangers of casino junkets?
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.
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 US Federal Court
It conducts investigations in support of a government's confiscation or seizure efforts.

46. Convertible Bond
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
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 prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.

47. FATF Recommendation 39
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.
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.
Countries should recognize money laundering as an extraditable offense.
Futures contracts - forwards - swaps or options.

48. Money Mules
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
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.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).

49. 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
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.
Harmful or Preferrential Tax Regimes.

50. Foriegn Shell Banks are vehicles for ______ & ______?
Money Laundering and Tax Evasion
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.
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.
Countries should recognize money laundering as an extraditable offense.