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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. 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?
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
Review customer files and conduct random sampling of accounts.
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.

2. Who are the parties involved in a trust?
As a financial institution service that is very vulnerable to money laundering.
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.
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.

3. FATF Sepcial Recommendation on Terrorist Financing -- SR Six
Direct or indirect advisor on buying and selling futures or commodity options.
Impose AML requirements on alternative remittance systems.
As a financial institution service that is very vulnerable to money laundering.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.

4. Agent (Insurance Industry)
An account that does not show activity other than the posting of interest or account maintenance fees.
A fund setup by an investment trust that issues a fixed number of shares to its investors. As such - the market price of the shares fluctuates - often selling at a premium or discount to the fund's net asset value (NAV).
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
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

5. FATF Recommendation 34
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)

6. Boiler Room
Expatriates sending money back to their home country or by other individuals sending money abroad.
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.
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
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.

7. How does the Egmont group help its members?
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
Penny Stocks
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
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.

8. A 'Cash Letter' can also be referred to as _____.
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.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
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.
Pouch activity.

9. OCC Office of the Comptroller of the Currency
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
Stored Value Cards - Mobile Payments - Internet Payments.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.

10. What is one of the cental stragetic tools required for effective action against money laundering?
Confiscation
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.
Stored Value Cards - Mobile Payments - Internet Payments.
The UN Convention against Transnational Organized Crime [Adopted 12/2000].

11. Who appear to be predominant users of hawalas and other alternative remittance systems?
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.
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.
bear the mark 'APOSTILLE'
Expatriates sending money back to their home country or by other individuals sending money abroad.

12. Wire Transfers
Banking services between merchant banks and other financial institutions.
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
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.
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.

13. Market Manipulation
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.
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.
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.

14. FATF Recommendation 38
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
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.
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.
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.

15. In general terms - EDD requires what of a financial institution?

16. FATF Recommendation 25
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
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.
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.
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.

17. Pink Sheets
The US State Dept issues the report annually.
An electronic quotation system that displays quotes of many securities traded over the counter.
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.
www.artloss.com

18. Foriegn Shell Banks are vehicles for ______ & ______?
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.
Money Laundering and Tax Evasion
To reduce financial crime - including money laundering and terrorit financing.
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.

19. Corporate Bank

20. What do 'Hedge Funds' attempt to do?
Middle East and North Africa Financial Action Task Force
Freeze and confiscate terrorist assets.
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

21. What is the significance of 'Non-Financial Trades and Businesses' in realtion to Money Laundering?
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
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.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
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

22. Behaviour detection

23. Who issues the Internationa Narcotics Control Strategy Report (INCSR) and how often?
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'
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
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.
The US State Dept issues the report annually.

24. Why does a launderer try to run transactions through a concentration account of a financial institution?
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
No.
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.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.

25. What does the principal US money laundering law look for before implementing its 'Extraterritorial Reach'?
Financial Action Task Force on Money Laundering in South America
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 trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
Report suspicious transactions linked to terrorism.

26. FATF Recommendation 26
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
The International Monetary Fund (IMF) and the world bank conduct the joint program.
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.

27. Nostro

28. What were recently identified as Emerging Money Laundering risks?
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
Funds transfers - Shell Corporations - Contractual Transactions.
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.

29. FATF Recommendation 1
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
tipped off that they are being investigated.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.

30. Legal Arrangements (Insurance Industry)
Freeze and confiscate terrorist assets.
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
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
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]

31. FATF's designated transactional threshold for Financial Insitutions is _____.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
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.
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
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.

32. Characteristics of an 'Open System Stored Value Card'
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.
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.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
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.

33. A 'panzi' scheme is named for whom?
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]
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
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.
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.

34. Dematerialization of Securities

35. Respondent Bank

36. What are the three main functions of a 'Transfer Agent'?
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
Financial Action Task Force
Funds transfers - Shell Corporations - Contractual Transactions.
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.

37. Why do convertible bonds oftern have lower interest rates than non-convertible bonds?
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.
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.
The International Monetary Fund (IMF) and the world bank conduct the joint program.
They can accrue value as the price of the underlying stock rises.

38. What is the Federal Service for Financial Monitoring?
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.
The FIU of Russia
Funds transfers - Shell Corporations - Contractual Transactions.
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.

39. Automated Sale
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
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.
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.

40. The IMF estimates that laundered funds compromise ______ of the world's GDP
As 'felonies' or 'all offenses in the criminal code'.
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
2% - 5% ($590B - $1.5T)
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.

41. OTC markets Over-The-Counter
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 market is which securities are bought and sold outside of establisehd securities markets.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
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.

42. FATF Recommendation 14
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
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.
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.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.

43. Credit Card Associations
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.

44. What is a Private Investment company (PIC)?
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
that appear to be linked

45. FATF Recommendation 17
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
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.
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.

46. What the primary objectives of Offshore Group of Banking Supervisors?
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
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.
Impose AML requirements on alternative remittance systems.
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

47. (Credit Card) Issuing Bank
Solicits potential customers and issues the credit cards.
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'.
Harmful or Preferrential Tax Regimes.
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.

48. FATF Recommendation 29
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
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.

49. FATF Recommendation 37
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
Processes transactions for merchants who accept credit cards.

50. As considered by UN and OECD - these are jurisdictions that have no or low tax rates - and do not attract real business or foreign investment
Harmful or Preferrential Tax Regimes.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
Pouch activity.