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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. Cash Equivalent

2. Arrest Warrant
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.
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.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
The FIU of the UK

3. Underwriting
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
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.
The opposing part of a transaction or trade.
Placement - Layering - Integration.

4. FATF Recommendation 2
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
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.
Solicits potential customers and issues the credit cards.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.

5. FATF Sepcial Recommendation on Terrorist Financing -- SR Six
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.
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
Impose AML requirements on alternative remittance systems.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.

6. FATF's designated transactional threshold for Financial Insitutions is _____.
As a financial institution service that is very vulnerable to money laundering.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
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.
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.

7. Why is 'Know Your Correspondent Bank' important?
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
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.
Canada
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.

8. How does 'Product Diversion' work?
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
As 'felonies' or 'all offenses in the criminal code'.
Person who - for compensation - provides advice on securities and investments and manages client assets.
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.

9. FATF Sepcial Recommendation on Terrorist Financing -- SR Nine
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
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.
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.

10. Counter Party
have in place compulsory currency reporting requirements.
The opposing part of a transaction or trade.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.

11. FATF Recommendation 17
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
Person who - for compensation - provides advice on securities and investments and manages client assets.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.

12. The 'Art Loss Register'

13. What is the significance of 'Non-Financial Trades and Businesses' in realtion to Money Laundering?
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
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]
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.

14. FATF Recommendation 33
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
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).

15. 'Loan Back' method. Give example of how it works.

16. (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.
disrupt or adversely afftect the business of the bank.
The opposing part of a transaction or trade.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.

17. What is a Financial Intelligence Unit?
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
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.
Processes transactions for merchants who accept credit cards.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.

18. What does the principal US money laundering law look for before implementing its 'Extraterritorial Reach'?
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
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
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.

19. What is the goal of FSAP?
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.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.

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

21. FATF Sepcial Recommendation on Terrorist Financing -- SR One
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
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 opposing part of a transaction or trade.
Take immediate steps to ratify and implement the UN instruments.

22. Moneyval
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
www.artloss.com
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism

23. Apostille

24. Why does a launderer try to run transactions through a concentration account of a financial institution?
Countering the Financing of Terrorism (Counter Terrorist Financing).
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
Stored Value Cards - Mobile Payments - Internet Payments.

25. CFT
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.
Countering the Financing of Terrorism (Counter Terrorist Financing).
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.
Competent authorities should have powers of subpoena - search and seizure.

26. What do 'Hedge Funds' attempt to do?
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
Combines funds from various members and users them to trade in futures or options contracts.
The UN Convention against Transnational Organized Crime [Adopted 12/2000].

27. EAG
EurAsian Group
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
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.

28. In Emerging Money Laundering Risks - what 3 areas are associated with 'Contractual Transactions'?
To promote the effective supervision of banks in their jurisdictions; to further international cooperation in the supervision between the Offshore Banking Supervisors - and with Basel committee member nations and other banking supervisors.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
foreign correspondent banks

29. MENAFATF
People who help move the billions of dollars drug traffickers earn around the world.
Middle East and North Africa Financial Action Task Force
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
Letters Rogatory

30. Pink Sheets
An electronic quotation system that displays quotes of many securities traded over the counter.
Middle East and North Africa Financial Action Task Force
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.

31. Free Look Period
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.
An electronic quotation system that displays quotes of many securities traded over the counter.
No.
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.

32. Derivatives
Freeze and confiscate terrorist assets.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
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.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.

33. How is 'Legal Risk' defined by the 2001 Basel Due Diligence Principles?
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.
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.
foreign correspondent banks
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.

34. What do boiler room salespeople typically do?

35. 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.

36. FATF Recommendation 7

37. FATF Recommendation 31
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.

38. Mutual Fund
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
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
Terrorism and Terrorist Financing

39. 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...
foreign correspondent banks
Stored Value Cards - Mobile Payments - Internet Payments.
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.
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.

40. A pyramid scheme is also called...
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 chain-referral scheme.
Report suspicious transactions linked to terrorism.
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.

41. 'Kiting' via credit card
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.

42. In what country is the Egmont Group Secretariat now located?
Canada
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
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.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.

43. 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.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
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.

44. Boiler Room
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.
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
It conducts investigations in support of a government's confiscation or seizure efforts.
Letters Rogatory

45. Why is it imperative to have a strong Know Your Employee program?
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
Middle East and North Africa Financial Action Task Force
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
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.

46. (Credit Card) Issuing Bank
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.
www.artloss.com
Solicits potential customers and issues the credit cards.
no regulatory power or function

47. Many jurisdictions have legislation to ensure that suspects are not ____?
tipped off that they are being investigated.
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.
Intergovernmental Action Group against Money Laundering in Africa
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.

48. FATF Recommendation 14
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.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
that appear to be linked
Provide mutual legal assistance.

49. FATF Recommendation 37
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
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.

50. FATF Recommendation 27
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 designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.
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.