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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. How is 'Identity theft' often accomplished?
Intergovernmental Action Group against Money Laundering in Africa
An account that does not show activity other than the posting of interest or account maintenance fees.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.

2. What was the target of UN Security Council Resolution 1267?
Strengthen customer identification measures in iternational and domestic wire transfers.
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.
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.

3. Automated Sale
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].
Solicits potential customers and issues the credit cards.
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.

4. In Emerging Money Laundering Risks - what 3 areas are associated with 'Contractual Transactions'?
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
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 FIU of Russia
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.

5. FATF Recommendation 31
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
Processes transactions for merchants who accept credit cards.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.

6. According to FATF - financial transactions above a designated threshold may include situations where the transaction takes place in a single operation or in several operations...
A market is which securities are bought and sold outside of establisehd securities markets.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
that appear to be linked

7. Vital Service Providers (VSPs)
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.
The world's largest private DB of stolen art.
People who help move the billions of dollars drug traffickers earn around the world.
Foreign Corrupt Practices Act

8. How is 'Legal Risk' defined by the 2001 Basel Due Diligence Principles?
They can accrue value as the price of the underlying stock rises.
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.
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 US Federal Court

9. Characteristics of an 'Open System Stored Value Card'
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
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.
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.
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.

10. What is meant by 'Know Your Customer's customer'?
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.

11. FATF Recommendation 9
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.
Countries should recognize money laundering as an extraditable offense.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.

12. Common types of 'Derivatives'
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.
Futures contracts - forwards - swaps or options.
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
Foreign Corrupt Practices Act

13. SRO (Self-Regulatory Organizations)
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
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.
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.

14. Transparency International
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.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
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.
It was the first law in any country to make money laundering a crime.

15. FATF Recommendation 5
Direct or indirect advisor on buying and selling futures or commodity options.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.

16. 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.
Freeze and confiscate terrorist assets.
As a financial institution service that is very vulnerable to money laundering.
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.

17. FATF
Financial Action Task Force
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
As a financial institution service that is very vulnerable to money laundering.
2% - 5% ($590B - $1.5T)

18. Free Look Period
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.
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
Solicits potential customers and issues the credit cards.

19. What can result from on institution's disregard for the Basel Due Diligence Principle?
Financial Action Task Force on Money Laundering in South America
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.

20. Why is understanding 'Product Diversion' important to the AML investigator?
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.
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.
Canada
Competent authorities should have powers of subpoena - search and seizure.

21. What the primary objectives of Offshore Group of Banking Supervisors?
Canada
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
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.

22. Downstream Correspondent Clearer
A fund setup by an investment trust in which the number of shares can fluctuate as investors' move in and out the fund. Share prices moves in direct proportion of the net asset value of the underlying investments (no premium or discount).
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
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.
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.

23. Underwriting
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.
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).
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.

24. Who issues the Internationa Narcotics Control Strategy Report (INCSR) and how often?
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
The US State Dept issues the report annually.
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.

25. FATF Recommendation 20
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
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.
As a financial institution service that is very vulnerable to money laundering.
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.

26. A 'Cash Letter' can also be referred to as _____.
If provided for money laundering to be an internationally extraditable offense.
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.
Type of foreign bank that is incorporated in the host country but is considered to be owned by a foreign parent bank. It only needs to operarted under the host country's regulations.
Pouch activity.

27. FATF Recommendation 29
Placement - Layering - Integration.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
Foreign Corrupt Practices Act
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.

28. The 'Art Loss Register'

29. 'Open-end Mutual Fund' (or Company)

30. Short Sale

31. What is the FCPA primarily known for?
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
Financial Action Task Force on Money Laundering in South America
Applied by an authority - it is a special seal which certifies that a document is a true copy of an original. However - it does not and cannot speak to the validity of the document's content.
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).

32. The USA Patriot Act enacted a number of statutory provisions that bear directly on the procedures US financial institutions must follow in connection with their...
Type of foreign bank that is incorporated in the host country but is considered to be owned by a foreign parent bank. It only needs to operarted under the host country's regulations.
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.
foreign correspondent banks
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.

33. EAG
EurAsian Group
Foreign Corrupt Practices Act
The US State Dept issues the report annually.
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.

34. Express Trust
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
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).
To reduce financial crime - including money laundering and terrorit financing.

35. Why is 'refining' critical to a money launderer's efforts?
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
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.

36. Why is 'Know Your Customer's Customer' important?
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
The International Monetary Fund (IMF) and the world bank conduct the joint program.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
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.

37. FATF Recommendation 34
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.

38. What does FIU do beyond what FIU does?

39. What is private investment company also known as?
A US Federal Court
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.
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 chain-referral scheme.

40. FATF Recommendation 18
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.
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.
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
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.

41. FATF Recommendation 10
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
Intergovernmental Action Group against Money Laundering in Africa
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.

42. FATF Sepcial Recommendation on Terrorist Financing -- SR Eight
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
Foreign Corrupt Practices Act
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.

43. Money Mules
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.
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.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
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.

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

45. Mutual Fund
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
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.
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.

46. FATF Recommendation 24
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
a Sr Management level
no regulatory power or function

47. What is the goal of the Egmont group?

48. May a shell bank maintain a correspondent account with a US bank?
No.
As a financial institution service that is very vulnerable to money laundering.
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 terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.

49. What is a Private Investment company (PIC)?
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.
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.

50. What are some of the AML dangers of casino junkets?
Banking services between merchant banks and other financial institutions.
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.
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.
Competent authorities should have powers of subpoena - search and seizure.