Certified Anti Money Laundering Specialist Cams

Instructions:

• Answer 50 questions in 15 minutes.
• If you are not ready to take this test, you can study here.
• Match each statement with the correct term.
• Don't refresh. All questions and answers are randomly picked and ordered every time you load a test.

This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.

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

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2. Nostro

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3. Wire Transfers
Funds transfers - Shell Corporations - Contractual Transactions.
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
The US State Dept issues the report annually.
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.


4. FATF Recommendation 16
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
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.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
tipped off that they are being investigated.


5. Open System Stored Value Card
Canada
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 prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.


6. FATF Sepcial Recommendation on Terrorist Financing -- SR Five

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7. Cash Equivalent

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8. Dormant Account
An account that does not show activity other than the posting of interest or account maintenance fees.
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.
As 'felonies' or 'all offenses in the criminal code'.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.


9. Where is the Art Loss Register found?
Reliable - independent source of documents - data or information.
www.artloss.com
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
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.


10. 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 trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
no regulatory power or function
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
Passed in 1977 - the US law is primarily known for its anti-bribery provisions (it also applies to foreign companies with stocks covered by the Securities and Exchange Act of 1934).


11. 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.
tipped off that they are being investigated.
2% - 5% ($590B - $1.5T)


12. FATF Recommendation 36
Provide mutual legal assistance.
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.
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.
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.


13. FATF Sepcial Recommendation on Terrorist Financing -- SR One
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
Take immediate steps to ratify and implement the UN instruments.
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.
Typical mass-market banking where individual customers use local branches of larger commercial banks.


14. FATF Sepcial Recommendation on Terrorist Financing -- SR Two
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.
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.


15. What do 'Hedge Funds' attempt to do?
foreign correspondent banks
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
a chain-referral scheme.


16. Arrest Warrant
A US Federal Court
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.
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
Impose AML requirements on alternative remittance systems.


17. Short Sale

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18. FATF Recommendation 13
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
Harmful or Preferrential Tax Regimes.


19. What tend to be the markings of Private Banking transactions?
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.


20. What was the effect of the 1988 Vienna Convention as it relates to extradtition?
If provided for money laundering to be an internationally extraditable offense.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
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.
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.


21. FATF Recommendation 34
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
Terrorism and Terrorist Financing


22. FATF Recommendation 26
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
2% - 5% ($590B - $1.5T)


23. Cash Letter
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
bear the mark 'APOSTILLE'
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.


24. What does a 'Commission Rogatoire' normally specify?
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
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.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
Stored Value Cards - Mobile Payments - Internet Payments.


25. Why is 'Know Your Customer's Customer' important?
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
a chain-referral scheme.
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.


26. What is the FCPA primarily known for?
Solicits potential customers and issues the credit cards.
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).
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.


27. Example of use of an Apostille
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
It one wants to open a bank account overseas - but do it through the mail - the bank may need to be assured that the copy of the passport is correct. The Apostille mark can assure this.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).


28. FATF Sepcial Recommendation on Terrorist Financing -- SR Three
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
Freeze and confiscate terrorist assets.


29. Mutual Fund
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
Impose AML requirements on alternative remittance systems.
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
Open and Closed system


30. FATF Recommendation 39
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
Countries should recognize money laundering as an extraditable offense.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism


31. Boiler Room
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.
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
A security that offers the owner the right to subscribe for ordinary shares of a company at a fixed date - usually at a fixed price. Equivalent to stock options.
Processes transactions for merchants who accept credit cards.


32. 'Coucil of Europe Convention on Laundering - Search - Seizure and Confiscation of the Proceeds from Crime' is known for what?
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.
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].
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.
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.


33. Free Look Period
Take immediate steps to ratify and implement the UN instruments.
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Harmful or Preferrential Tax Regimes.


34. 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?
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
Direct or indirect advisor on buying and selling futures or commodity options.
a chain-referral scheme.
Review customer files and conduct random sampling of accounts.


35. What does theInternationa Narcotics Control Strategy Report (INCSR) entail?
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
The FIU of Russia
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.


36. Why is a 'money order' attractive to a money launderer?
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
Type of foreign bank that is incorporated in the host country but is considered to be owned by a foreign parent bank. It only needs to operarted under the host country's regulations.
Review customer files and conduct random sampling of accounts.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.


37. What can result from on institution's disregard for the Basel Due Diligence Principle?
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
It was the first law in any country to make money laundering a crime.
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.
Type of foreign bank that is incorporated in the host country but is considered to be owned by a foreign parent bank. It only needs to operarted under the host country's regulations.


38. Dematerialization of Securities

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39. Transparency International
Confiscation
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.


40. What is the Wolfsberg group?
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
The International Monetary Fund (IMF) and the world bank conduct the joint program.
Report suspicious transactions linked to terrorism.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.


41. What were recently identified as Emerging Money Laundering risks?
The opposing part of a transaction or trade.
The International Monetary Fund (IMF) and the world bank conduct the joint program.
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.
Funds transfers - Shell Corporations - Contractual Transactions.


42. What does FIU do beyond what FIU does?

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43. FATF Recommendation 27
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.
disrupt or adversely afftect the business of the bank.
The FIU of the UK
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.


44. Who appear to be predominant users of hawalas and other alternative remittance systems?
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.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
Expatriates sending money back to their home country or by other individuals sending money abroad.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.


45. A 'panzi' scheme is named for whom?
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
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.
If provided for money laundering to be an internationally extraditable offense.
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.


46. FATF Recommendation 1
The possibility that lawsuits adverse judgements or contracts that turn out to be unenforceable can disrupt or adversely affect the operatinos or condition of a financial siutation.
Provide mutual legal assistance.
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
Intergovernmental Action Group against Money Laundering in Africa


47. How do most governments view Private Banking?
To reduce financial crime - including money laundering and terrorit financing.
As a financial institution service that is very vulnerable to money laundering.
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.
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].


48. FATF Recommendation 6
Impose AML requirements on alternative remittance systems.
Solicits potential customers and issues the credit cards.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
Confiscation


49. In Emerging Money Laundering Risks - what 3 methods are identified as 'Funds Transfers'?
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
Stored Value Cards - Mobile Payments - Internet Payments.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.


50. Automated Sale
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.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
The FIU of Russia