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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. What is meant by 'Know Your Customer's customer'?
FATF principles should apply to all branches and subsidiaries of a financial institution - even those abroad. Inability to do should re reported to parent institution's regulatory/supervisory authority.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.

2. What does the principal US money laundering law look for before implementing its 'Extraterritorial Reach'?
no regulatory power or function
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
Terrorism and Terrorist Financing
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data

3. May a shell bank maintain a correspondent account with a US bank?
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 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).
No.
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.

4. A 'Cash Letter' can also be referred to as _____.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
Pouch activity.

5. Express Trust
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
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
Because it represents funds drawn on the account of a financial institution and not on a particular individual.

6. What does FIU do beyond what FIU does?

7. FATF Recommendations examples of non-financial businesses and professions
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.

8. The Palemo Convention
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).

9. Should one ever file a Suspicious Transaction Report (STR/SAR) based on a person's profile?

10. Many jurisdictions have legislation to ensure that suspects are not ____?
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
tipped off that they are being investigated.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.

11. What is important about the US Money Laundering Control Act (MCLA)?
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
It was the first law in any country to make money laundering a crime.
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.

12. FATF Recommendation 21
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
Combines funds from various members and users them to trade in futures or options contracts.
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.
As a financial institution service that is very vulnerable to money laundering.

13. Characteristics of an 'Open System Stored Value Card'
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.
Expanding/Systemising the exchange of financial intelligence - improving expertise/capabilities of their personnel - fostering better communication by applying new technologies and sharing financial crimes investigations information.
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.

14. What does Financial Sector AssessmentProgram (FSAP) do?
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
An electronic quotation system that displays quotes of many securities traded over the counter.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.

15. When was the Offshore Group of Banking Supervisors established? What was the impetus behind its establishment?
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
Expatriates sending money back to their home country or by other individuals sending money abroad.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.

16. What was the effect of the 1988 Vienna Convention as it relates to extradtition?
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
If provided for money laundering to be an internationally extraditable offense.
Canada
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.

17. FATF Recommendation 15
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
A market is which securities are bought and sold outside of establisehd securities markets.
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.
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.

18. Why is it imperative to have a strong Know Your Employee program?
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.
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.
Confiscation
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.

19. What is private investment company also known as?
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
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.
www.artloss.com
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.

20. 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.
foreign correspondent banks
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.

21. (Credit Card) Issuing Bank
Solicits potential customers and issues the credit cards.
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.
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
a Sr Management level

22. How do 'Hedge Funds' operate?

23. Boiler Room
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
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.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.

24. Credit Card Associations
As a financial institution service that is very vulnerable to money laundering.
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.

25. SRO (Self-Regulatory Organizations)
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
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.
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.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.

26. FATF Recommendation 2
EurAsian Group
Funds transfers - Shell Corporations - Contractual Transactions.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.

27. What is the FCPA primarily known for?
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
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).
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
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. What does the 'SEC' (US Securities and Exchange Commission) do?
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
No.
Strengthen customer identification measures in iternational and domestic wire transfers.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.

29. Margin
that appear to be linked
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.

30. Commodity Pool Operator
Reliable - independent source of documents - data or information.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.

31. Operational risks in KYC context relate to...
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
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.
It was the first law in any country to make money laundering a crime.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.

32. A pyramid scheme is also called...
Financial Action Task Force on Money Laundering in South America
Report suspicious transactions linked to terrorism.
a chain-referral scheme.
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.

33. Scheme
Open and Closed system
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.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
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.

34. EAG
Person who - for compensation - provides advice on securities and investments and manages client assets.
Account established by a domestic banking institution to receive deposits from - make payments on behalf of - or handle other financial transactions for a foreign financial institution - usually in the foreign financial institutions's cureency.
EurAsian Group
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.

35. FATF Recommendation 36
www.artloss.com
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
Provide mutual legal assistance.

36. Fraud
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.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
It was the first law in any country to make money laundering a crime.

37. How does the Egmont group help its members?
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.
Reliable - independent source of documents - data or information.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.

38. Investigative Log
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.

39. White-Collar crime

40. What is the goal of the Egmont group?

41. FATF Sepcial Recommendation on Terrorist Financing -- SR Two
A US Federal Court
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.
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
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.

42. Portfolio Manager
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.
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.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
have in place compulsory currency reporting requirements.

43. What was the target of UN Security Council Resolution 1373?
Terrorism and Terrorist Financing
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.
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.

44. What do 'Hedge Funds' attempt to do?
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
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'.
Firm or person that solicits and accepts commodity futures orders from customers but does not accept funds. Two types of IB_C's: Guaranteed and Independent.

45. FATF Sepcial Recommendation on Terrorist Financing -- SR Eight
It was the first law in any country to make money laundering a crime.
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.
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
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.

46. FATF Recommendation 14
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.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
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.

47. When is a jurisdiction considered to be 'ring-fenced'?
have in place compulsory currency reporting requirements.
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 UN Convention against Transnational Organized Crime [Adopted 12/2000].
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.

48. What does FIU do?
Solicits potential customers and issues the credit cards.
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
Combines funds from various members and users them to trade in futures or options contracts.
Competent authorities should have powers of subpoena - search and seizure.

49. 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...
The FIU of Russia
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.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
no regulatory power or function

50. Behaviour detection