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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. What does theInternationa Narcotics Control Strategy Report (INCSR) entail?
The world's largest private DB of stolen art.
The possibility that lawsuits adverse judgements or contracts that turn out to be unenforceable can disrupt or adversely affect the operatinos or condition of a financial siutation.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.

2. What is the Wolfsberg group?
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.

3. Who appoints a 'Federal Receiver' (US)?
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.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
A US Federal Court

4. Nostro

5. Common types of 'Derivatives'
Futures contracts - forwards - swaps or options.
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.

6. What can result from on institution's disregard for the Basel Due Diligence Principle?
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
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 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.

7. What does FIU do beyond what FIU does?

8. Reverse Flip

9. Abusive Squeezes

10. What are the two types of Stored Value Cards?
Open and Closed system
2% - 5% ($590B - $1.5T)
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.

11. Vital Service Providers (VSPs)
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.
People who help move the billions of dollars drug traffickers earn around the world.
Person who - for compensation - provides advice on securities and investments and manages client assets.
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.

12. Examples of VSP's
Letters Rogatory
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
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]
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism

13. Where is the Art Loss Register found?
As a financial institution service that is very vulnerable to money laundering.
www.artloss.com
Futures contracts - forwards - swaps or options.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.

14. Options/Options Contract
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.
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.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
2% - 5% ($590B - $1.5T)

15. Corporate Bank

16. Why is 'Know Your Correspondent Bank' important?
Financial institutions should have adequate supervision and regulation. Ensure no criminal element in position on control. Money transfer/exchangers should be registered and subjected to monitoring.
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 trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
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.

17. What do 'Hedge Funds' attempt to do?
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
Strengthen customer identification measures in iternational and domestic wire transfers.

18. Open System Stored Value Card
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.

19. FATF Sepcial Recommendation on Terrorist Financing -- SR Three
No.
People who help move the billions of dollars drug traffickers earn around the world.
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.
Freeze and confiscate terrorist assets.

20. What is the goal of the Egmont group?

21. FATF Recommendation 13
The US State Dept issues the report annually.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.

22. Cash Letter
Freeze and confiscate terrorist assets.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.

23. Account Monitoring Order (UK and several other countries)
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
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.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
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.

24. Underwriting
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
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.
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.
Review customer files and conduct random sampling of accounts.

25. What is a Private Investment company (PIC)?
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
The FIU of Russia
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.

26. FATF Recommendation 15
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
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.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.

27. What must a financial institution do if they have 'Exempt Accounts'?
Canada
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
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 exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.

28. How do 'Hedge Funds' operate?

29. Bust-out
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.
An account that does not show activity other than the posting of interest or account maintenance fees.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.

30. FATF Recommendation 20
that appear to be linked
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
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'
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.

31. Fraud
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.

32. FATF Recommendation 24
It conducts investigations in support of a government's confiscation or seizure efforts.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
Harmful or Preferrential Tax Regimes.
Funds transfers - Shell Corporations - Contractual Transactions.

33. The Palemo Convention
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
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 UN Convention against Transnational Organized Crime [Adopted 12/2000].
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.

34. How are 'Predicate Crimes' sometimes identified?

35. FATF Recommendation 35
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
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]

36. FATF Recommendation 8
No.
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.
Freeze and confiscate terrorist assets.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.

37. Money Mules
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.
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.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.

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

39. FATF Recommendation 16
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
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.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
Provide mutual legal assistance.

40. FATF Recommendation 23
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.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
Financial institutions should have adequate supervision and regulation. Ensure no criminal element in position on control. Money transfer/exchangers should be registered and subjected to monitoring.

41. The Vienns Convention
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
Intergovernmental Action Group against Money Laundering in Africa
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 UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].

42. Margin
As a financial institution service that is very vulnerable to money laundering.
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.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.

43. What is the Federal Service for Financial Monitoring?
2% - 5% ($590B - $1.5T)
have in place compulsory currency reporting requirements.
Pouch activity.
The FIU of Russia

44. Downstream Correspondent Clearer
To reduce financial crime - including money laundering and terrorit financing.
Money Laundering and Tax Evasion
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.
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.

45. FATF Recommendation 29
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.

46. What criterion does the US need to enforce its 'Extraterritorial Reach'?

47. What is one of the cental stragetic tools required for effective action against money laundering?
Countries should recognize money laundering as an extraditable offense.
Person who - for compensation - provides advice on securities and investments and manages client assets.
Confiscation
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.

48. What is a 'NCCT'?
To reduce financial crime - including money laundering and terrorit financing.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
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.

49. Agent (Insurance Industry)
Refers to where the agent is acting under a contractual arrangement with the insurer to carry out its CDD functions (i.e. the agent is regarded as synonymous with the insurer) [FATF Risk-Based approach - Guidance for the Life Insurance Sector - Oct 0
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.
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.

50. Market Manipulation
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
tipped off that they are being investigated.
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.
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.