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. Dormant Account
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
As a financial institution service that is very vulnerable to money laundering.
An account that does not show activity other than the posting of interest or account maintenance fees.
Canada


2. Who issues the Internationa Narcotics Control Strategy Report (INCSR) and how often?
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
The US State Dept issues the report annually.
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.


3. Fraud
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
tipped off that they are being investigated.


4. FATF Recommendation 40
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.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.


5. FCPA (US)
Foreign Corrupt Practices Act
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.


6. What was the target of UN Security Council Resolution 1373?
The world's largest private DB of stolen art.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
Report suspicious transactions linked to terrorism.
Terrorism and Terrorist Financing


7. What are included in the Wolfsberg AML Principles on Private Banking?
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
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.


8. What is private investment company also known as?
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.
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
Money Laundering and Tax Evasion
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.


9. Who appear to be predominant users of hawalas and other alternative remittance systems?
Expatriates sending money back to their home country or by other individuals sending money abroad.
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
The FIU of the UK
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.


10. Who are the parties involved in a trust?
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.
The US State Dept issues the report annually.
A deliberate attempt to interfere with the free and fair operation of the market and create artificial - false or misleading appearances with respect to the price of - or market for a security - commodity or currency.
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).


11. What does the 'SEC' (US Securities and Exchange Commission) do?
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.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.


12. OTC markets Over-The-Counter
Foreign Corrupt Practices Act
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
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.


13. FATF Recommendation 24
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.


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

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15. FATF Recommendation 21
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.
Banking services between merchant banks and other financial institutions.
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.


16. FATF Recommendation 32
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.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.


17. Options/Options Contract
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.
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.
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.
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.


18. FATF Recommendation 27
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]
No.
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]
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.


19. When was the Offshore Group of Banking Supervisors established? What was the impetus behind its establishment?
Competent authorities should have powers of subpoena - search and seizure.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.


20. Why is 'Know Your Correspondent Bank' important?
To reduce financial crime - including money laundering and terrorit financing.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
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.
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.


21. Investment Adviser
Person who - for compensation - provides advice on securities and investments and manages client assets.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
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.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.


22. Market Manipulation
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.
A deliberate attempt to interfere with the free and fair operation of the market and create artificial - false or misleading appearances with respect to the price of - or market for a security - commodity or currency.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
To reduce financial crime - including money laundering and terrorit financing.


23. FATF Sepcial Recommendation on Terrorist Financing -- SR Three
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
Freeze and confiscate terrorist assets.
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.


24. FATF's designated transactional threshold for Casinos (including Internet Casinos) is _____.
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
The US State Dept issues the report annually.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)


25. FATF Sepcial Recommendation on Terrorist Financing -- SR Nine
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
A co-operative property seller agrees to sell home at a well-below market reported price - then accepts the difference 'under the table'. When launderer later sells house - he recognizes 'gain' and all funds appear legitimate as it sold at market.


26. 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?
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]
Review customer files and conduct random sampling of accounts.
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.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.


27. How does 'Product Diversion' work?
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
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.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.


28. Structuring is a common technique in jurisdictions that...
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
have in place compulsory currency reporting requirements.
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 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.


29. FATF's designated transactional threshold for Delaers is Precious metals and / or Precious Stones is _____.
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.
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
have in place compulsory currency reporting requirements.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)


30. What is a 'Trust'?
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
The International Monetary Fund (IMF) and the world bank conduct the joint program.
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.


31. What tend to be the markings of Private Banking transactions?
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.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
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.


32. FATF Recommendation 6
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
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.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
Real Estate - Insurance Transactions - Trade-Based Money Laundering.


33. Corporate Bank

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34. FATF's designated transactional threshold for Financial Insitutions is _____.
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)


35. Short Sale

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36. Vital Service Providers (VSPs)
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
People who help move the billions of dollars drug traffickers earn around the world.
a chain-referral scheme.


37. Why is it imperative to have a strong Know Your Employee program?
A market is which securities are bought and sold outside of establisehd securities markets.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
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.


38. Downstream Correspondent Clearer
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
Middle East and North Africa Financial Action Task Force
bear the mark 'APOSTILLE'
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.


39. What does Financial Sector AssessmentProgram (FSAP) do?
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
that appear to be linked
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.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.


40. Cash Letter
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
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
Confiscation
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)


41. What normal business practise makes 'Product Division' possible?
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.
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
People who help move the billions of dollars drug traffickers earn around the world.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.


42. FATF Recommendation 10
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
Financial Action Task Force
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization


43. Behaviour detection

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44. Credit Card Associations
Money Laundering and Tax Evasion
Freeze and confiscate terrorist assets.
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization


45. FATF Sepcial Recommendation on Terrorist Financing -- SR Six
If provided for money laundering to be an internationally extraditable offense.
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
Impose AML requirements on alternative remittance systems.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.


46. Cash Log

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47. The IMF estimates that laundered funds compromise ______ of the world's GDP
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.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
2% - 5% ($590B - $1.5T)
It was the first law in any country to make money laundering a crime.


48. In what country is the Egmont Group Secretariat now located?
A market is which securities are bought and sold outside of establisehd securities markets.
A US Federal Court
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
Canada


49. FATF Sepcial Recommendation on Terrorist Financing -- SR One
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
Take immediate steps to ratify and implement the UN instruments.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.


50. Agent (Insurance Industry)
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
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
A deliberate attempt to interfere with the free and fair operation of the market and create artificial - false or misleading appearances with respect to the price of - or market for a security - commodity or currency.