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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. Where is the Art Loss Register found?
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
www.artloss.com

2. Bust-out
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
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.

3. Why is a 'money order' attractive to a money launderer?
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
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.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
An account that does not show activity other than the posting of interest or account maintenance fees.

4. Abusive Squeezes

5. Guaranteed Introducing Broker

6. Who conducts the Financial Sector Assessment Program (FSAP)?
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
The International Monetary Fund (IMF) and the world bank conduct the joint program.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
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.

7. US law prohibhits Foriegn Shell Banks from ____?
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.

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

9. FATF Recommendation 10
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
a chain-referral scheme.

10. The Palemo Convention
Terrorism and Terrorist Financing
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
Combines funds from various members and users them to trade in futures or options contracts.

11. FATF Sepcial Recommendation on Terrorist Financing -- SR Three
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
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.
Freeze and confiscate terrorist assets.

12. Vital Service Providers (VSPs)
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.
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
People who help move the billions of dollars drug traffickers earn around the world.
Intergovernmental Action Group against Money Laundering in Africa

13. The IMF estimates that laundered funds compromise ______ of the world's GDP
The FIU of Russia
2% - 5% ($590B - $1.5T)
bear the mark 'APOSTILLE'
Countries should recognize money laundering as an extraditable offense.

14. FATF Recommendation 18
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 trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
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.
As 'felonies' or 'all offenses in the criminal code'.

15. What were recently identified as Emerging Money Laundering risks?
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.
Pouch activity.
Funds transfers - Shell Corporations - Contractual Transactions.
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.

16. FATF Sepcial Recommendation on Terrorist Financing -- SR Seven
Direct or indirect advisor on buying and selling futures or commodity options.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Strengthen customer identification measures in iternational and domestic wire transfers.

17. How do 'Hedge Funds' operate?

18. FATF Recommendation 15
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
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.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws

19. What are the three main functions of a 'Transfer Agent'?
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.
The FIU of the UK
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
Foreign Corrupt Practices Act

20. FATF Sepcial Recommendation on Terrorist Financing -- SR Five

21. Underwriting
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
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.

22. Scheme
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.
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.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
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.

23. Why do convertible bonds oftern have lower interest rates than non-convertible bonds?
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
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
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
They can accrue value as the price of the underlying stock rises.

24. Cash Log

25. Why is understanding 'Product Diversion' important to the AML investigator?
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
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.

26. (Credit card) Acquiring Bank
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Processes transactions for merchants who accept credit cards.
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
www.artloss.com

27. What is the goal of the Egmont group?

28. What is a 'NCCT'?
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.
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
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).
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.

29. Moneyval
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)

30. Mutual Fund
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
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.
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.

31. Why do companies export their goods at prices far below those in their home country?
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
Person who - for compensation - provides advice on securities and investments and manages client assets.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.

32. White-Collar crime

33. Convertible Bond
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
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 fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.

34. What the primary objectives of Offshore Group of Banking Supervisors?
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
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.
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.

35. GAFISUD
Take immediate steps to ratify and implement the UN instruments.
Financial Action Task Force on Money Laundering in South America
Futures contracts - forwards - swaps or options.
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.

36. Should one ever file a Suspicious Transaction Report (STR/SAR) based on a person's profile?

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

38. USA Patriot Act Section 312 'Offshore Bank'
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
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.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.

39. FATF Sepcial Recommendation on Terrorist Financing -- SR Two
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
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.
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
Placement - Layering - Integration.

40. (Stock) Warrants
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
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.
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
An electronic quotation system that displays quotes of many securities traded over the counter.

41. The 'Art Loss Register'

42. FATF Recommendation 3
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.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.

43. OCC Office of the Comptroller of the Currency
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
Middle East and North Africa Financial Action Task Force
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.
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.

44. What is one of the cental stragetic tools required for effective action against money laundering?
The International Monetary Fund (IMF) and the world bank conduct the joint program.
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.
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.
Confiscation

45. Why is 'Know Your Customer's Customer' important?
If provided for money laundering to be an internationally extraditable offense.
Open and Closed system
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
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.

46. Automated Sale
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.
People who help move the billions of dollars drug traffickers earn around the world.
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
a Sr Management level

47. How is 'Legal Risk' defined by the 2001 Basel Due Diligence Principles?
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].
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.

48. Options/Options Contract
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.
Competent authorities should have powers of subpoena - search and seizure.
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.

49. Express Trust
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
Direct or indirect advisor on buying and selling futures or commodity options.
Impose AML requirements on alternative remittance systems.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.

50. What is one of the Financial Service Authority's (UK) tasks?
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.
To reduce financial crime - including money laundering and terrorit financing.
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.
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.