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 4
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.
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.


2. Fraud
Countries should recognize money laundering as an extraditable offense.
No.
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.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.


3. Many jurisdictions have legislation to ensure that suspects are not ____?
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.
tipped off that they are being investigated.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.


4. Cash Letter
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.


5. What does Financial Sector AssessmentProgram (FSAP) do?
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.
The opposing part of a transaction or trade.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.


6. Express Trust
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.


7. Why do companies export their goods at prices far below those in their home country?
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
tipped off that they are being investigated.
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.


8. FATF Recommendation 39
Countries should recognize money laundering as an extraditable offense.
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).
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.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.


9. What are included in the Wolfsberg AML Principles on Private Banking?
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
Middle East and North Africa Financial Action Task Force
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.


10. FATF Recommendation 3
Combines funds from various members and users them to trade in futures or options contracts.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
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.
Solicits potential customers and issues the credit cards.


11. FATF
Financial Action Task Force
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.
A market is which securities are bought and sold outside of establisehd securities markets.
Money Laundering and Tax Evasion


12. Why is 'refining' critical to a money launderer's efforts?
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.


13. What does FIU do beyond what FIU does?

Warning: Invalid argument supplied for foreach() in /var/www/html/basicversity.com/show_quiz.php on line 183


14. What is the Wolfsberg group?
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 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.
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.


15. 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.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.


16. Commodity Pool
Combines funds from various members and users them to trade in futures or options contracts.
Canada
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
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.


17. FATF Recommendation 29
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
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.
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).
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.


18. What the primary objectives of Offshore Group of Banking Supervisors?
Banking services between merchant banks and other financial institutions.
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 contractual arrangement whereby the trustee manages the property for the benefit of the beneficiary in accordance with the contractual terms set by the grantor.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.


19. Convertible Bond
Canada
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
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.


20. Who appear to be predominant users of hawalas and other alternative remittance systems?
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.
Expatriates sending money back to their home country or by other individuals sending money abroad.
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.
Strengthen customer identification measures in iternational and domestic wire transfers.


21. Why is understanding 'Product Diversion' important to the AML investigator?
Harmful or Preferrential Tax Regimes.
As a financial institution service that is very vulnerable to money laundering.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
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.


22. In general terms - EDD requires what of a financial institution?

Warning: Invalid argument supplied for foreach() in /var/www/html/basicversity.com/show_quiz.php on line 183


23. Short Sale

Warning: Invalid argument supplied for foreach() in /var/www/html/basicversity.com/show_quiz.php on line 183


24. How is 'Identity theft' often accomplished?
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
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.
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.
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.


25. GAFISUD
Impose AML requirements on alternative remittance systems.
As 'felonies' or 'all offenses in the criminal code'.
Financial Action Task Force on Money Laundering in South America
bear the mark 'APOSTILLE'


26. What was the effect of the 1988 Vienna Convention as it relates to extradtition?
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
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.
Competent authorities should have powers of subpoena - search and seizure.
If provided for money laundering to be an internationally extraditable offense.


27. How is 'Legal Risk' defined by the 2001 Basel Due Diligence Principles?
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
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.


28. FATF Recommendation 12
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
that appear to be linked
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.


29. FATF Recommendation 38
Provide mutual legal assistance.
A bank whose license has conditions that prohibhit the licensed entity from conducting banking activities with the citizens - or with the local currency - of the country that issued that license.
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.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.


30. How are 'Predicate Crimes' sometimes identified?

Warning: Invalid argument supplied for foreach() in /var/www/html/basicversity.com/show_quiz.php on line 183


31. A pyramid scheme is also called...
a chain-referral scheme.
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.
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.
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.


32. The 'Art Loss Register'

Warning: Invalid argument supplied for foreach() in /var/www/html/basicversity.com/show_quiz.php on line 183


33. Example of use of an Apostille
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
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.
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.


34. What are the three main functions of a 'Transfer Agent'?
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.
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
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.


35. Portfolio Manager
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.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
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.
The US State Dept issues the report annually.


36. Counter Party
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.
If provided for money laundering to be an internationally extraditable offense.
The opposing part of a transaction or trade.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.


37. (Credit Card) Third-Party processor
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.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
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.


38. Who appoints a 'Federal Receiver' (US)?
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
A US Federal Court
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'.
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.


39. Corporate Bank

Warning: Invalid argument supplied for foreach() in /var/www/html/basicversity.com/show_quiz.php on line 183


40. FATF Recommendation 8
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.
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.


41. What is the goal of the Egmont group?

Warning: Invalid argument supplied for foreach() in /var/www/html/basicversity.com/show_quiz.php on line 183


42. FATF Recommendation 26
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
Direct or indirect advisor on buying and selling futures or commodity options.


43. As considered by UN and OECD - these are jurisdictions that have no or low tax rates - and do not attract real business or foreign investment
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
They can accrue value as the price of the underlying stock rises.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
Harmful or Preferrential Tax Regimes.


44. Legal Arrangements (Insurance Industry)
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.
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
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]


45. Wholesale Banking
Banking services between merchant banks and other financial institutions.
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]
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
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.


46. A public perception that a bank is not able to manage its operational risk effectively can...
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.
disrupt or adversely afftect the business of the bank.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.


47. FATF Recommendations examples of non-financial businesses and professions
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
They can accrue value as the price of the underlying stock rises.
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.


48. What is the goal of FSAP?
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.


49. Futures Commission Merchant (FCM)
Harmful or Preferrential Tax Regimes.
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.
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 firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.


50. FATF Recommendation 22

Warning: Invalid argument supplied for foreach() in /var/www/html/basicversity.com/show_quiz.php on line 183