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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 can result from on institution's disregard for the Basel Due Diligence Principle?
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
Combines funds from various members and users them to trade in futures or options contracts.
The US State Dept issues the report annually.

2. What was the target of UN Security Council Resolution 1373?
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.
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.
have in place compulsory currency reporting requirements.
Terrorism and Terrorist Financing

3. Affidavit
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.
Freeze and confiscate terrorist assets.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws

4. What were recently identified as Emerging Money Laundering risks?
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
Funds transfers - Shell Corporations - Contractual Transactions.
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.

5. How is 'Legal Risk' defined by the 2001 Basel Due Diligence Principles?
They can accrue value as the price of the underlying stock rises.
Market participants intentionally restrict a security's liquidity. May lead to increased profits when the security's price rises due to the lack of 'supply'.
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.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.

6. MENAFATF
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]
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
Futures contracts - forwards - swaps or options.
Middle East and North Africa Financial Action Task Force

7. Distribution Channels (Insurance Industry)
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
The FIU of Russia
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]
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.

8. What does an Extradition Treaty specify?
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
Terrorism and Terrorist Financing
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.

9. FATF Recommendation 26
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
Reliable - independent source of documents - data or information.

10. Pink Sheets
An electronic quotation system that displays quotes of many securities traded over the counter.
It conducts investigations in support of a government's confiscation or seizure efforts.
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)

11. What are the three main functions of a 'Transfer Agent'?
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
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 US State Dept issues the report annually.
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.

12. What are the two types of Stored Value Cards?
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
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.
Combines funds from various members and users them to trade in futures or options contracts.
Open and Closed system

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

14. Commodity Pool Operator
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
Countering the Financing of Terrorism (Counter Terrorist Financing).
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
A market is which securities are bought and sold outside of establisehd securities markets.

15. '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].
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 UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
Letters Rogatory

16. How does 'Product Diversion' work?
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.
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.
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.

17. Why is understanding 'Product Diversion' important to the AML investigator?
Confiscation
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.
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.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.

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

19. UK courts view on 'Suspicion'
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
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 contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
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.

20. OTC markets Over-The-Counter
Provide mutual legal assistance.
EurAsian Group
bear the mark 'APOSTILLE'
A market is which securities are bought and sold outside of establisehd securities markets.

21. Boiler Room
Person who - for compensation - provides advice on securities and investments and manages client assets.
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
Review customer files and conduct random sampling of accounts.
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.

22. A 'panzi' scheme is named for whom?
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
Charles Ponzi - an Italian immigrant to the US who spent 10 years in jail for a scheme that defrauded 40 -000 people out of $15 million.
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.

23. Many jurisdictions have legislation to ensure that suspects are not ____?
tipped off that they are being investigated.
Placement - Layering - Integration.
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.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.

24. Automated Sale
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.
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.
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
Provide mutual legal assistance.

25. Arrest Warrant
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.
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.
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 contractual arrangement whereby the trustee manages the property for the benefit of the beneficiary in accordance with the contractual terms set by the grantor.

26. What is the significance of 'Non-Financial Trades and Businesses' in realtion to Money Laundering?
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
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.
Charles Ponzi - an Italian immigrant to the US who spent 10 years in jail for a scheme that defrauded 40 -000 people out of $15 million.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).

27. Commodity Pool
As a financial institution service that is very vulnerable to money laundering.
Combines funds from various members and users them to trade in futures or options contracts.
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.
Intergovernmental Action Group against Money Laundering in Africa

28. In what country is the Egmont Group Secretariat now located?
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
Strengthen customer identification measures in iternational and domestic wire transfers.
Canada

29. Options/Options Contract
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
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.
disrupt or adversely afftect the business of the bank.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)

30. What is meant by 'Know Your Correspondent Bank'?

31. FATF Recommendation 23
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.
tipped off that they are being investigated.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
Harmful or Preferrential Tax Regimes.

32. FATF Sepcial Recommendation on Terrorist Financing -- SR Seven
Strengthen customer identification measures in iternational and domestic wire transfers.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
have in place compulsory currency reporting requirements.

33. What is the Federal Service for Financial Monitoring?
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
The FIU of Russia
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.

34. Derivatives
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
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
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.
Financial institutions should pay special attention to (and examine & document) complex - unusual large transactions - and all transactions which have no apparent economic or lawful purpose.

35. FATF Recommendation 33
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
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.
Review customer files and conduct random sampling of accounts.

36. What is the FCPA primarily known for?
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.
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).
It conducts investigations in support of a government's confiscation or seizure efforts.
tipped off that they are being investigated.

37. Dormant Account
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
They can accrue value as the price of the underlying stock rises.
An account that does not show activity other than the posting of interest or account maintenance fees.
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.

38. What are some of the AML dangers of casino junkets?
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
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.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).

39. Investigative Log
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
foreign correspondent banks
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
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.

40. FATF Recommendation 25
It was the first law in any country to make money laundering a crime.
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
Refers to express trusts or other similar legal arrangements - such as fiducie - treuhand and fideicomiso [FATF Risk-Based approach - Guidance for the Life Insurance Sector - Oct 09]

41. How do 'Hedge Funds' operate?

42. 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...
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
They can accrue value as the price of the underlying stock rises.
foreign correspondent banks

43. 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.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
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.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.

44. FATF Recommendation 3
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.

45. When was the Offshore Group of Banking Supervisors established? What was the impetus behind its establishment?
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.
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
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.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).

46. Dematerialization of Securities

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

48. What is a 'NCCT'?
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
no regulatory power or function
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.
Take immediate steps to ratify and implement the UN instruments.

49. Wholesale Banking
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
To reduce financial crime - including money laundering and terrorit financing.
Banking services between merchant banks and other financial institutions.
Confiscation

50. FATF Recommendation 31
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
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 contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
tipped off that they are being investigated.