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. Why is 'Know Your Customer's Customer' important?
Futures contracts - forwards - swaps or options.
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
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.


2. FATF Recommendation 24
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.
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.


3. Cash Equivalent

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4. What was the target of UN Security Council Resolution 1373?
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.
Competent authorities should have powers of subpoena - search and seizure.
Terrorism and Terrorist Financing
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.


5. White-Collar crime

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6. FATF Recommendation 8
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.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
Money Laundering and Tax Evasion


7. The Joint Money Laundering Steering Group (UK) has published a series of AML Guidance Notes for different sectors of the financial community. But - As a group of trade associations - it has...
A market is which securities are bought and sold outside of establisehd securities markets.
no regulatory power or function
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'
Person who - for compensation - provides advice on securities and investments and manages client assets.


8. 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.
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.
Middle East and North Africa Financial Action Task Force
Money Laundering and Tax Evasion


9. Cash Letter
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.
a chain-referral scheme.
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 have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.


10. Mutual Fund
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
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
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.


11. GAFISUD
A US Federal Court
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]
Financial Action Task Force on Money Laundering in South America
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.


12. Arrest Warrant
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
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.
To reduce financial crime - including money laundering and terrorit financing.
Middle East and North Africa Financial Action Task Force


13. May a shell bank maintain a correspondent account with a US bank?
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
No.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.


14. Legal Arrangements (Insurance Industry)
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
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]
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.


15. Who issues the Internationa Narcotics Control Strategy Report (INCSR) and how often?
Intergovernmental Action Group against Money Laundering in Africa
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
The US State Dept issues the report annually.
The UN Convention against Transnational Organized Crime [Adopted 12/2000].


16. What is one of the Financial Service Authority's (UK) tasks?
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.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
To reduce financial crime - including money laundering and terrorit financing.


17. CFT
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
Countering the Financing of Terrorism (Counter Terrorist Financing).
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.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.


18. Margin
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.


19. 'Loan Back' method. Give example of how it works.

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

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21. FATF Recommendation 21
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.
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
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.


22. FATF Recommendation 18
Countries should not allow shell banks. Financial institutions should not have correspondent banking relationships with shell banks or banks that allow shell banks to do business through their accounts.
Harmful or Preferrential Tax Regimes.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.


23. How does the Egmont group help its members?
Foreign Corrupt Practices Act
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.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.


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

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25. FATF Sepcial Recommendation on Terrorist Financing -- SR Seven
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
Strengthen customer identification measures in iternational and domestic wire transfers.
Terrorism and Terrorist Financing
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.


26. Examples of VSP's
Provide mutual legal assistance.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
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
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data


27. Options/Options Contract
Foreign Corrupt Practices Act
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.
Person who - for compensation - provides advice on securities and investments and manages client 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.


28. What the primary objectives of Offshore Group of Banking Supervisors?
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.
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
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.
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization


29. FATF Recommendation 26
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).
Financial Action Task Force on Money Laundering in South America
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
Penny Stocks


30. FCPA (US)
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
Strengthen customer identification measures in iternational and domestic wire transfers.
Foreign Corrupt Practices Act
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.


31. FATF Recommendation 10
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
Financial Action Task Force
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data


32. Why is 'Know Your Correspondent Bank' important?
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.
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.
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
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


33. FATF Recommendation 15
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.
Strengthen customer identification measures in iternational and domestic wire transfers.
Freeze and confiscate terrorist assets.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.


34. How do most governments view Private Banking?
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
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.
As a financial institution service that is very vulnerable to money laundering.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.


35. Investigative Log
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
It was the first law in any country to make money laundering a crime.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.


36. Reverse Flip

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37. FATF Recommendations examples of non-financial businesses and professions
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.


38. Retail Banking
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.
Direct or indirect advisor on buying and selling futures or commodity options.
Typical mass-market banking where individual customers use local branches of larger commercial banks.
Letters Rogatory


39. Market Manipulation
An electronic quotation system that displays quotes of many securities traded over the counter.
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.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
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.


40. What is the FCPA primarily known for?
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).
They can accrue value as the price of the underlying stock rises.
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.
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.


41. Why is a 'money order' attractive to a money launderer?
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
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
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.


42. Dematerialization of Securities

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43. What does an Extradition Treaty specify?
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
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.
Provide mutual legal assistance.


44. Basel's 'CDD for Banks' states that the decision to open an account for a PEP should be taken at...
An electronic quotation system that displays quotes of many securities traded over the counter.
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).
a Sr Management level
Combines funds from various members and users them to trade in futures or options contracts.


45. Why do companies export their goods at prices far below those in their home country?
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
A US Federal Court
A written statement given under oath before an officer of the court - notary public - or other authorized person. Commonly used as the factual basis for an application for a search - arrest or seizure warrant.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.


46. (Credit Card) Third-Party processor
Penny Stocks
EurAsian Group
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
Solicits potential customers and issues the credit cards.


47. UK courts view on 'Suspicion'
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.
The FIU of the UK
A degree of satisfaction not necessarily amounting to belief but extending beyond specualtionas to whether an event has occured or not. Though suspicion requires a lesser factual basis than a belief - it must be built upon some foundation.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.


48. Fraud
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.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.


49. FATF Sepcial Recommendation on Terrorist Financing -- SR Four
Report suspicious transactions linked to terrorism.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
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.
tipped off that they are being investigated.


50. Characteristics of an 'Open System Stored Value Card'
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).
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
a Sr Management level
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.