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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. Open System Stored Value Card
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
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 fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.

2. FATF Recommendation 10
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.

3. Who issues the Internationa Narcotics Control Strategy Report (INCSR) and how often?
The US State Dept issues the report annually.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.

4. What must a financial institution do if they have 'Exempt Accounts'?
Placement - Layering - Integration.
Pouch activity.
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).
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.

5. What is the FCPA primarily known for?
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
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).
Freeze and confiscate terrorist assets.
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.

6. Margin
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
Letters Rogatory

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

8. FATF Sepcial Recommendation on Terrorist Financing -- SR Six
Impose AML requirements on alternative remittance systems.
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]
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
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.

9. What are included in the Wolfsberg AML Principles on Private Banking?
Typical mass-market banking where individual customers use local branches of larger commercial banks.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
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 14
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)

11. Agent (Insurance Industry)
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
Refers to where the agent is acting under a contractual arrangement with the insurer to carry out its CDD functions (i.e. the agent is regarded as synonymous with the insurer) [FATF Risk-Based approach - Guidance for the Life Insurance Sector - Oct 0
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.

12. How are 'Predicate Crimes' sometimes identified?

13. Example of use of an Apostille
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
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.
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.

14. Convertible Bond
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.
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
Canada

15. FATF Recommendation 40
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
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'
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.
Combines funds from various members and users them to trade in futures or options contracts.

16. The Palemo Convention
Countering the Financing of Terrorism (Counter Terrorist Financing).
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
Placement - Layering - Integration.

17. How is 'Identity theft' often accomplished?
Reliable - independent source of documents - data or information.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.

18. FATF Recommendation 7

19. In Emerging Money Laundering Risks - what 3 methods are identified as 'Funds Transfers'?
The International Monetary Fund (IMF) and the world bank conduct the joint program.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
Stored Value Cards - Mobile Payments - Internet Payments.
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.

20. What normal business practise makes 'Product Division' possible?
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.
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.
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.

21. FATF Sepcial Recommendation on Terrorist Financing -- SR Three
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.
Freeze and confiscate terrorist assets.
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 merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.

22. Penny Stocks
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.
As 'felonies' or 'all offenses in the criminal code'.
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.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.

23. Structuring is a common technique in jurisdictions that...
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.
Countries should recognize money laundering as an extraditable offense.
To provide a forum for FIU's (Financial Intelligence Unit) to improve support to their respective national AML progrmans and development protocols for the sharing of information.
have in place compulsory currency reporting requirements.

24. White-Collar crime

25. FATF Recommendation 26
Strengthen customer identification measures in iternational and domestic wire transfers.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.

26. Cash Log

27. What were recently identified as Emerging Money Laundering risks?
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
Typical mass-market banking where individual customers use local branches of larger commercial banks.
Funds transfers - Shell Corporations - Contractual Transactions.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.

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

29. Why do convertible bonds oftern have lower interest rates than non-convertible bonds?
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
They can accrue value as the price of the underlying stock rises.
Placement - Layering - Integration.

30. Behaviour detection

31. FATF Sepcial Recommendation on Terrorist Financing -- SR Two
People who help move the billions of dollars drug traffickers earn around the world.
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
Terrorism and Terrorist Financing
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).

32. FATF Recommendation 39
Countries should recognize money laundering as an extraditable offense.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
People who help move the billions of dollars drug traffickers earn around the world.
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.

33. What is private investment company also known as?
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
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.
Countering the Financing of Terrorism (Counter Terrorist Financing).
An electronic quotation system that displays quotes of many securities traded over the counter.

34. Affidavit
Pouch activity.
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.
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.
www.artloss.com

35. A 'Cash Letter' can also be referred to as _____.
The International Monetary Fund (IMF) and the world bank conduct the joint program.
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
Pouch activity.
Intergovernmental Action Group against Money Laundering in Africa

36. 'Commission Rogatoire' known in English as?
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
As a financial institution service that is very vulnerable to money laundering.
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
Letters Rogatory

37. Reverse Flip

38. What are the three main functions of a 'Transfer Agent'?
2% - 5% ($590B - $1.5T)
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
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.

39. What does a 'Commission Rogatoire' normally specify?
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.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.

40. 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...
An electronic quotation system that displays quotes of many securities traded over the counter.
foreign correspondent banks
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).

41. Underwriting
As a financial institution service that is very vulnerable to money laundering.
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
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.

42. According to FATF - financial transactions above a designated threshold may include situations where the transaction takes place in a single operation or in several operations...
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.
that appear to be linked
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
The International Monetary Fund (IMF) and the world bank conduct the joint program.

43. Commodity Trading Advisor
Direct or indirect advisor on buying and selling futures or commodity options.
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
Countries should recognize money laundering as an extraditable offense.

44. Bust-out
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
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'.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
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.

45. Express Trust
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
a chain-referral scheme.
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
have in place compulsory currency reporting requirements.

46. Wire Transfers
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.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
They can accrue value as the price of the underlying stock rises.
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.

47. 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.
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.
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.
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.

48. Automated Sale
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
The world's largest private DB of stolen art.
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.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.

49. OCC Office of the Comptroller of the Currency
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
An account that does not show activity other than the posting of interest or account maintenance fees.
Banking services between merchant banks and other financial institutions.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.

50. FATF Recommendations examples of non-financial businesses and professions
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
Financial Action Task Force
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).