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

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2. Agent (Insurance Industry)
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
Expatriates sending money back to their home country or by other individuals sending money abroad.
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
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.


3. 'Competent Authorities' refers to _____.
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
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.
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.


4. FATF Recommendation 6
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.


5. What is important about the US Money Laundering Control Act (MCLA)?
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.
Letters Rogatory
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
It was the first law in any country to make money laundering a crime.


6. Basel committee's 'Customer Due Diligence for Banks' when verifying a unit's compliance with KYC policies and procedures - the home country supervisors or auditors should do what?
Review customer files and conduct random sampling of accounts.
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.


7. OTC markets Over-The-Counter
A market is which securities are bought and sold outside of establisehd securities markets.
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.
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.
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]


8. UK courts view on 'Suspicion'
A degree of satisfaction not necessarily amounting to belief but extending beyond specualtionas to whether an event has occured or not. Though suspicion requires a lesser factual basis than a belief - it must be built upon some foundation.
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
tipped off that they are being investigated.
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.


9. FATF Recommendation 31
bear the mark 'APOSTILLE'
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
Harmful or Preferrential Tax Regimes.
EurAsian Group


10. Penny Stocks
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
Strengthen customer identification measures in iternational and domestic wire transfers.
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.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.


11. Why is it imperative to have a strong Know Your Employee program?
As 'felonies' or 'all offenses in the criminal code'.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.


12. Characteristics of an 'Open System Stored Value Card'
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
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.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)


13. Who issues the Internationa Narcotics Control Strategy Report (INCSR) and how often?
The US State Dept issues the report annually.
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
Typical mass-market banking where individual customers use local branches of larger commercial banks.
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.


14. FATF Recommendation 3
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.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.


15. Futures Commission Merchant (FCM)
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
The US State Dept issues the report annually.
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.


16. Who conducts the Financial Sector Assessment Program (FSAP)?
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.
The International Monetary Fund (IMF) and the world bank conduct the joint program.
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
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.


17. What are included in the Wolfsberg AML Principles on Private Banking?
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
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.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)


18. Margin
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
The opposing part of a transaction or trade.
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.


19. Automated Sale
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.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
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.
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.


20. FATF's designated transactional threshold for Casinos (including Internet Casinos) is _____.
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.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
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.
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)


21. Why is 'Know Your Customer's Customer' important?
Harmful or Preferrential Tax Regimes.
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.
foreign correspondent banks
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.


22. Cash Log

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23. EAG
EurAsian Group
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
Terrorism and Terrorist Financing
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.


24. Variable Annuity
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.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
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]
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


25. What can result from on institution's disregard for the Basel Due Diligence Principle?
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
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 immediate steps to ratify and implement the UN instruments.


26. FATF Recommendation 39
Letters Rogatory
Countries should recognize money laundering as an extraditable offense.
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.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.


27. FATF Recommendation 38
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
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.
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.


28. What do boiler room salespeople typically do?

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29. FATF Sepcial Recommendation on Terrorist Financing -- SR Seven
have in place compulsory currency reporting requirements.
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.
Strengthen customer identification measures in iternational and domestic wire transfers.
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.


30. FATF Sepcial Recommendation on Terrorist Financing -- SR Two
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
If provided for money laundering to be an internationally extraditable offense.


31. Open System Stored Value Card
The FIU of the UK
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.


32. FATF Sepcial Recommendation on Terrorist Financing -- SR Eight
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.


33. FATF Sepcial Recommendation on Terrorist Financing -- SR Three
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
Freeze and confiscate terrorist assets.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).


34. FATF Recommendation 37
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
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).
a Sr Management level


35. FATF Recommendation 28
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
Competent authorities should have powers of subpoena - search and seizure.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
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.


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

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37. Legal Arrangements (Insurance Industry)
Impose AML requirements on alternative remittance systems.
To reduce financial crime - including money laundering and terrorit financing.
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]
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.


38. FATF Recommendation 15
Placement - Layering - Integration.
To reduce financial crime - including money laundering and terrorit financing.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
Provide mutual legal assistance.


39. FATF Sepcial Recommendation on Terrorist Financing -- SR Six
People who help move the billions of dollars drug traffickers earn around the world.
Impose AML requirements on alternative remittance systems.
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.
Competent authorities should have powers of subpoena - search and seizure.


40. What is the Serious Organised Crime Agency (SOCA)?
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 FIU of the UK
Canada
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.


41. What is the goal of the Egmont group?

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42. What does the principal US money laundering law look for before implementing its 'Extraterritorial Reach'?
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
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.
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
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.


43. FATF's designated transactional threshold for Financial Insitutions is _____.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
The opposing part of a transaction or trade.
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.


44. What are the three main functions of a 'Transfer Agent'?
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
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.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
2% - 5% ($590B - $1.5T)


45. FATF Recommendation 40
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.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
Penny Stocks
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.


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

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47. Derivatives
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
Intergovernmental Action Group against Money Laundering in Africa
A US Federal Court
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.


48. Arrest Warrant
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
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.


49. FATF Recommendation 22

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50. FATF Recommendation 36
www.artloss.com
It conducts investigations in support of a government's confiscation or seizure efforts.
Provide mutual legal assistance.
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]