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 it imperative to have a strong Know Your Employee program?
Open and Closed system
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.


2. FATF Sepcial Recommendation on Terrorist Financing -- SR Six
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.
The opposing part of a transaction or trade.
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.
Impose AML requirements on alternative remittance systems.


3. How does 'Product Diversion' work?
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.
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).
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
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.


4. Commodity Pool
Combines funds from various members and users them to trade in futures or options contracts.
It was the first law in any country to make money laundering a crime.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.


5. FATF Recommendation 23
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
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.
Banking services between merchant banks and other financial institutions.


6. 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...
that appear to be linked
foreign correspondent banks
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.
Solicits potential customers and issues the credit cards.


7. Open System Stored Value Card
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 profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
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.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.


8. Why do companies export their goods at prices far below those in their home country?
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 create new overseas markets - dispose of excess goods - or otherwise recover their costs.
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.
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


9. What tend to be the markings of Private Banking transactions?
Funds transfers - Shell Corporations - Contractual Transactions.
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
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.


10. CFT
Countering the Financing of Terrorism (Counter Terrorist Financing).
The US State Dept issues the report annually.
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.
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].


11. Mutual Fund
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 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.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
An electronic quotation system that displays quotes of many securities traded over the counter.


12. FATF Recommendation 30
Countering the Financing of Terrorism (Counter Terrorist Financing).
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
As a financial institution service that is very vulnerable to money laundering.
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.


13. What was the target of UN Security Council Resolution 1373?
Terrorism and Terrorist Financing
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
The FIU of the UK


14. GIABA
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.
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
Intergovernmental Action Group against Money Laundering in Africa


15. Cash Equivalent

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16. FATF Recommendation 7

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

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18. What do boiler room salespeople typically sell?
Futures contracts - forwards - swaps or options.
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.
Penny Stocks
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.


19. What were recently identified as Emerging Money Laundering risks?
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.
Confiscation
Funds transfers - Shell Corporations - Contractual Transactions.
Absolutely NOT. If the decision is based purely on profile - then you are discriminating. you need to file such reports on the ACTIVITY especially if it differs from the 'normal and expected' as reflected in the customer profile.


20. What is important about the US Money Laundering Control Act (MCLA)?
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.
It was the first law in any country to make money laundering a crime.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
Expatriates sending money back to their home country or by other individuals sending money abroad.


21. FATF's designated transactional threshold for Delaers is Precious metals and / or Precious Stones is _____.
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
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'
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.


22. What was the effect of the 1988 Vienna Convention as it relates to extradtition?
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.
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.
If provided for money laundering to be an internationally extraditable offense.
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. Counter Party
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
The opposing part of a transaction or trade.
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
Strengthen customer identification measures in iternational and domestic wire transfers.


24. Futures Commission Merchant (FCM)
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
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.


25. What are some of the AML dangers of casino junkets?
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
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.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).


26. FATF's designated transactional threshold for Financial Insitutions is _____.
2% - 5% ($590B - $1.5T)
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Financial Action Task Force on Money Laundering in South America
Provide mutual legal assistance.


27. Scheme
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]
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.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
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.


28. The Vienns Convention
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.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
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.


29. FATF Recommendation 18
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
The world's largest private DB of stolen art.
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.
Penny Stocks


30. US law prohibhits Foriegn Shell Banks from ____?
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
Countering the Financing of Terrorism (Counter Terrorist Financing).


31. Examples of White-collar crime
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.
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.


32. FATF Recommendation 28
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
Competent authorities should have powers of subpoena - search and seizure.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
Report suspicious transactions linked to terrorism.


33. Identification data
Terrorism and Terrorist Financing
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
Reliable - independent source of documents - data or information.


34. Why is 'Know Your Correspondent Bank' important?
Letters Rogatory
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.
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.
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.


35. 'Open-end Mutual Fund' (or Company)

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36. Why is a 'money order' attractive to a money launderer?
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.
The opposing part of a transaction or trade.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
Stored Value Cards - Mobile Payments - Internet Payments.


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

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38. The IMF estimates that laundered funds compromise ______ of the world's GDP
2% - 5% ($590B - $1.5T)
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.
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.


39. FATF Recommendation 12
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).
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
Penny Stocks
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.


40. FATF Recommendation 22

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41. Where is the Art Loss Register found?
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.
www.artloss.com
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
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


42. EAG
EurAsian Group
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.
Report suspicious transactions linked to terrorism.
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].


43. Nostro

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44. Free Look Period
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.


45. FATF Recommendation 38
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
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.
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.


46. FATF Recommendation 1
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.


47. UK courts view on 'Suspicion'
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'.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
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.


48. Cash Letter
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.
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.


49. Vital Service Providers (VSPs)
bear the mark 'APOSTILLE'
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
Placement - Layering - Integration.
People who help move the billions of dollars drug traffickers earn around the world.


50. FATF Recommendation 16
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.
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
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.
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.