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. FATF's designated transactional threshold for Delaers is Precious metals and / or Precious Stones is _____.
A market is which securities are bought and sold outside of establisehd securities markets.
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)


2. Transparency International
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
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.
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.
have in place compulsory currency reporting requirements.


3. FATF Recommendation 38
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
Urge investors to buy 'house stocks' - stocks that the firm buys and sells as a market maker or has in its inventory. Oftentimes - they are running a 'pump-and-dumo' scheme.
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.


4. OTC markets Over-The-Counter
As a financial institution service that is very vulnerable to money laundering.
Pouch activity.
A market is which securities are bought and sold outside of establisehd securities markets.
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.


5. FATF Recommendation 17
Account established by a domestic banking institution to receive deposits from - make payments on behalf of - or handle other financial transactions for a foreign financial institution - usually in the foreign financial institutions's cureency.
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).


6. FATF Sepcial Recommendation on Terrorist Financing -- SR Six
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
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.
Impose AML requirements on alternative remittance systems.
www.artloss.com


7. Many jurisdictions have legislation to ensure that suspects are not ____?
The world's largest private DB of stolen art.
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 exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
tipped off that they are being investigated.


8. What is the aim of Joint Money Laundering Steering Group? (UK)
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
Combines funds from various members and users them to trade in futures or options contracts.
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws


9. FATF Recommendation 29
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
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.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
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.


10. What is the primary use of a 'Mutual Legal Assistance Treaty'?
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
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.
As a financial institution service that is very vulnerable to money laundering.


11. Options/Options Contract
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
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.
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.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)


12. The Joint Money Laundering Steering Group (UK) has published a series of AML Guidance Notes for different sectors of the financial community. But - As a group of trade associations - it has...
It conducts investigations in support of a government's confiscation or seizure efforts.
no regulatory power or function
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
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.


13. FATF Recommendation 31
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
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.
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.


14. Money Mules
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
Countries should recognize money laundering as an extraditable offense.
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.
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.


15. What do boiler room salespeople typically sell?
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Penny Stocks
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.


16. Investigative Log
www.artloss.com
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.


17. 'Coucil of Europe Convention on Laundering - Search - Seizure and Confiscation of the Proceeds from Crime' is known for what?
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].
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 promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.


18. Dematerialization of Securities

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19. GIABA
Intergovernmental Action Group against Money Laundering in Africa
Stored Value Cards - Mobile Payments - Internet Payments.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
As 'felonies' or 'all offenses in the criminal code'.


20. What does FIU do beyond what FIU does?

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21. Reverse Flip

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22. FATF Recommendation 30
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
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.
To reduce financial crime - including money laundering and terrorit financing.
Review customer files and conduct random sampling of accounts.


23. FATF Recommendation 28
Competent authorities should have powers of subpoena - search and seizure.
Terrorism and Terrorist Financing
Foreign Corrupt Practices Act
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.


24. FATF Recommendation 7

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25. FATF Sepcial Recommendation on Terrorist Financing -- SR Seven
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.
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
Strengthen customer identification measures in iternational and domestic wire transfers.
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.


26. FATF
Financial Action Task Force
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.
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
disrupt or adversely afftect the business of the bank.


27. What do boiler room salespeople typically do?

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28. FATF Recommendation 10
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
As 'felonies' or 'all offenses in the criminal code'.
Impose AML requirements on alternative remittance systems.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.


29. What is a 'NCCT'?
Provide mutual legal assistance.
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
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.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.


30. FATF Recommendation 6
disrupt or adversely afftect the business of the bank.
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.
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 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)


31. FATF Recommendation 22

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32. Free Look Period
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
Typical mass-market banking where individual customers use local branches of larger commercial banks.
2% - 5% ($590B - $1.5T)


33. FATF Recommendation 8
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
The nature of the request - the relevant criminal charges in the requesting country - the legal provision under which the request is made - and the information that is sought.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.


34. May a shell bank maintain a correspondent account with a US bank?
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.
Expatriates sending money back to their home country or by other individuals sending money abroad.
No.
As a financial institution service that is very vulnerable to money laundering.


35. What is meant by 'Know Your Customer's customer'?
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.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
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.


36. Mutual Fund
As 'felonies' or 'all offenses in the criminal code'.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.


37. Examples of VSP's
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'
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
Money Laundering and Tax Evasion
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.


38. Cash Equivalent

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39. Wire Transfers
Banking services between merchant banks and other financial institutions.
The US State Dept issues the report annually.
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
Report suspicious transactions linked to terrorism.


40. FCPA (US)
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
The FIU of Russia
Foreign Corrupt Practices Act
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.


41. A 'Cash Letter' can also be referred to as _____.
Pouch activity.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)


42. How does the Egmont group help its members?
that appear to be linked
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
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.


43. How do 'Hedge Funds' operate?

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44. Fraud
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.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.


45. FATF Recommendation 15
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
If provided for money laundering to be an internationally extraditable offense.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.


46. FATF Recommendation 5
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
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 corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.


47. Why do convertible bonds oftern have lower interest rates than non-convertible bonds?
The US State Dept issues the report annually.
Countering the Financing of Terrorism (Counter Terrorist Financing).
They can accrue value as the price of the underlying stock rises.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.


48. Dormant Account
An account that does not show activity other than the posting of interest or account maintenance fees.
www.artloss.com
disrupt or adversely afftect the business of the bank.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.


49. Pink Sheets
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.
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
An electronic quotation system that displays quotes of many securities traded over the counter.


50. Why is 'refining' critical to a money launderer's efforts?
Review customer files and conduct random sampling of accounts.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
Pouch activity.