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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. FATF Recommendation 36
Middle East and North Africa Financial Action Task Force
Provide mutual legal assistance.
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
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.

2. FATF's designated transactional threshold for Financial Insitutions is _____.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
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.

3. What is the goal of FSAP?
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
An introducing broker-dealer with an exclusive written agreement with a Futures Commission Merchant (FCM) that obligates the FCM to assume responsibility for the introducing broker's performance.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.

4. FATF Sepcial Recommendation on Terrorist Financing -- SR Two
The International Monetary Fund (IMF) and the world bank conduct the joint program.
The FIU of the UK
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.

5. FATF Recommendation 6
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).
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.

6. (Stock) Warrants
Middle East and North Africa Financial Action Task Force
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
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.
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.

7. FATF Recommendation 18
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
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.
To reduce financial crime - including money laundering and terrorit financing.
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.

8. Bust-out
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
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.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
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.

9. Why is 'refining' critical to a money launderer's efforts?
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
Placement - Layering - Integration.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.

10. Commodity Pool Operator
Combines funds from various members and users them to trade in futures or options contracts.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
Reliable - independent source of documents - data or information.
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.

11. What does Financial Sector AssessmentProgram (FSAP) do?
Reliable - independent source of documents - data or information.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.

12. Operational risks in KYC context relate to...
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
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.
Banking services between merchant banks and other financial institutions.

13. US law prohibhits Foriegn Shell Banks from ____?
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.

14. Credit Card Associations
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
An account that does not show activity other than the posting of interest or account maintenance fees.
A market is which securities are bought and sold outside of establisehd securities markets.
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).

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

16. Why is 'Know Your Correspondent Bank' important?
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.
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
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.

17. Who conducts the Financial Sector Assessment Program (FSAP)?
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.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
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 International Monetary Fund (IMF) and the world bank conduct the joint program.

18. CFT
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
Countering the Financing of Terrorism (Counter Terrorist Financing).
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.

19. Margin
An account that does not show activity other than the posting of interest or account maintenance fees.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.

20. Basel committee's 'Customer Due Diligence for Banks' when verifying a unit's compliance with KYC policies and procedures - the home country supervisors or auditors should do what?
Review customer files and conduct random sampling of accounts.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
Combines funds from various members and users them to trade in futures or options contracts.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.

21. What are the two types of Stored Value Cards?
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
Reliable - independent source of documents - data or information.
Open and Closed system
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.

22. 'Commission Rogatoire' known in English as?
People who help move the billions of dollars drug traffickers earn around the world.
Letters Rogatory
Combines funds from various members and users them to trade in futures or options contracts.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.

23. What was the effect of the 1988 Vienna Convention as it relates to extradtition?
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
If provided for money laundering to be an internationally extraditable offense.
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.

24. Cash Log

25. What does FIU do beyond what FIU does?

26. A public perception that a bank is not able to manage its operational risk effectively can...
If provided for money laundering to be an internationally extraditable offense.
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.
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'
disrupt or adversely afftect the business of the bank.

27. FATF Recommendation 33
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
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.
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.

28. Why do convertible bonds oftern have lower interest rates than non-convertible bonds?
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
They can accrue value as the price of the underlying stock rises.
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.

29. FATF Recommendation 38
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
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 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.
Typical mass-market banking where individual customers use local branches of larger commercial banks.

30. What does FIU do?
Contract issued by an insurance company under which an investor provides the insurer with funds (a lump-sum or series of payments). The insurer then agrees to make periodic payments to the investor starting the immediately or in the future.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.

31. Transparency International
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
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.
Placement - Layering - Integration.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.

32. In Emerging Money Laundering Risks - what 3 methods are identified as 'Funds Transfers'?
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.
An electronic quotation system that displays quotes of many securities traded over the counter.
They can accrue value as the price of the underlying stock rises.
Stored Value Cards - Mobile Payments - Internet Payments.

33. Characteristics of an 'Open System Stored Value Card'
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.
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
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.
tipped off that they are being investigated.

34. Corporate Bank

35. Convertible Preferred
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.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
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.

36. Who appoints a 'Federal Receiver' (US)?
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
Absolutely NOT. If the decision is based purely on profile - then you are discriminating. you need to file such reports on the ACTIVITY especially if it differs from the 'normal and expected' as reflected in the customer profile.
www.artloss.com
A US Federal Court

37. FATF Recommendation 19
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
Placement - Layering - Integration.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
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.

38. What is meant by 'Know Your Customer's customer'?
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
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.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.

39. Examples of White-collar crime
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
Direct or indirect advisor on buying and selling futures or commodity options.
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.

40. Penny Stocks
Reliable - independent source of documents - data or information.
Intergovernmental Action Group against Money Laundering in Africa
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
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.

41. Common types of 'Derivatives'
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
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.
Futures contracts - forwards - swaps or options.

42. In Emerging Money Laundering Risks - what 3 areas are associated with 'Contractual Transactions'?
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.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].

43. Cash Equivalent

44. The Vienns Convention
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
EurAsian Group
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.

45. 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...
foreign correspondent banks
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.

46. FATF Recommendation 16
The opposing part of a transaction or trade.
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.
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].
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.

47. FATF Recommendation 13
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
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.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.

48. What is a Private Investment company (PIC)?
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.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
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)

49. FATF Recommendation 21
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
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.
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
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.

50. FATF Recommendation 15
Financial institutions may rely upon intermediaries to perform certain CDD elements provided the intermediary is supervised and regulated. However - ultimate responsibility remains with the financial institution.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
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.
Processes transactions for merchants who accept credit cards.