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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. 'Introducing Broker-Dealers in Commodities' (IB-C)

2. Credit Card Associations
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.

3. FATF Recommendation 10
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data

4. The Vienns Convention
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
a Sr Management level
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.

5. FATF Recommendations examples of non-financial businesses and professions
It conducts investigations in support of a government's confiscation or seizure efforts.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.

6. Reverse Flip

7. Investigative Log
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
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 principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.

8. What do boiler room salespeople typically do?

9. FCPA (US)
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
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
Strengthen customer identification measures in iternational and domestic wire transfers.
Foreign Corrupt Practices Act

10. Cash Log

11. Operational risks in KYC context relate to...
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.

12. Three stages of money laundering
foreign correspondent banks
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.
Placement - Layering - Integration.
An electronic quotation system that displays quotes of many securities traded over the counter.

13. What is the significance of 'Non-Financial Trades and Businesses' in realtion to Money Laundering?
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'
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
A market is which securities are bought and sold outside of establisehd securities markets.
Intergovernmental Action Group against Money Laundering in Africa

14. Commodity
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
An account that does not show activity other than the posting of interest or account maintenance fees.
Stored Value Cards - Mobile Payments - Internet Payments.

15. OCC Office of the Comptroller of the Currency
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
Foreign Corrupt Practices Act
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.

16. Who conducts the Financial Sector Assessment Program (FSAP)?
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]
The International Monetary Fund (IMF) and the world bank conduct the joint program.
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 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).

17. The Palemo Convention
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
Canada

18. FATF Sepcial Recommendation on Terrorist Financing -- SR Six
Foreign Corrupt Practices Act
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
Impose AML requirements on alternative remittance systems.
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.

19. FATF Sepcial Recommendation on Terrorist Financing -- SR Nine
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.
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
Strengthen customer identification measures in iternational and domestic wire transfers.

20. How do 'Hedge Funds' operate?

21. What is a Financial Intelligence Unit?
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.
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
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.

22. FATF Recommendation 11
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.
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.

23. FATF Recommendation 23
The opposing part of a transaction or trade.
Countering the Financing of Terrorism (Counter Terrorist Financing).
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).
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.

24. Many jurisdictions have legislation to ensure that suspects are not ____?
Direct or indirect advisor on buying and selling futures or commodity options.
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.
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
tipped off that they are being investigated.

25. 'Kiting' via credit card
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
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.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.

26. 'Competent Authorities' refers to _____.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
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.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.

27. FATF Recommendation 33
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.
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.
Person who - for compensation - provides advice on securities and investments and manages client assets.
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.

28. Foriegn Shell Banks are vehicles for ______ & ______?
Provide mutual legal assistance.
Money Laundering and Tax Evasion
Solicits potential customers and issues the credit cards.
Typical mass-market banking where individual customers use local branches of larger commercial banks.

29. Who appoints a 'Federal Receiver' (US)?
A US Federal Court
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.
Impose AML requirements on alternative remittance systems.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.

30. FATF Recommendation 26
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.
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
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.

31. Agent (Insurance Industry)
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.
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
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.
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.

32. Legal Arrangements (Insurance Industry)
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
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.
EurAsian Group
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]

33. Wholesale Banking
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
Banking services between merchant banks and other financial institutions.

34. Scheme
Applied by an authority - it is a special seal which certifies that a document is a true copy of an original. However - it does not and cannot speak to the validity of the document's content.
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.
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.

35. 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...
Open and Closed system
no regulatory power or function
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'.

36. What were recently identified as Emerging Money Laundering risks?
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.
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
Funds transfers - Shell Corporations - Contractual Transactions.
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.

37. Why does a launderer try to run transactions through a concentration account of a financial institution?
The world's largest private DB of stolen art.
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.

38. A pyramid scheme is also called...
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
a chain-referral scheme.
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
As 'felonies' or 'all offenses in the criminal code'.

39. (Stock) Warrants
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.
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
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.
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]

40. Why is it imperative to have a strong Know Your Employee program?
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
Freeze and confiscate terrorist assets.
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).
Canada

41. Why do companies export their goods at prices far below those in their home country?
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.

42. (Credit card) Acquiring Bank
Processes transactions for merchants who accept credit cards.
Securities with very low marker price - volume and/or liquidity that are traded on a securities exchange or on the OTC markets. They tend to be more volatile than those on the major exchanges.
A contractual arrangement whereby the trustee manages the property for the benefit of the beneficiary in accordance with the contractual terms set by the grantor.
A market is which securities are bought and sold outside of establisehd securities markets.

43. Common types of 'Derivatives'
Futures contracts - forwards - swaps or options.
Solicits potential customers and issues the credit cards.
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.
Canada

44. What is a Private Investment company (PIC)?
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
People who help move the billions of dollars drug traffickers earn around the world.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
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.

45. Variable Annuity
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.
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.
As a financial institution service that is very vulnerable to money laundering.
It conducts investigations in support of a government's confiscation or seizure efforts.

46. Investment Adviser
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.
The International Monetary Fund (IMF) and the world bank conduct the joint program.
As 'felonies' or 'all offenses in the criminal code'.

47. Market Manipulation
Direct or indirect advisor on buying and selling futures or commodity options.
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 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.
that appear to be linked

48. The 'Art Loss Register'

49. What is one of the cental stragetic tools required for effective action against money laundering?
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]
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
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.

50. Retail Banking
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.
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.
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
Typical mass-market banking where individual customers use local branches of larger commercial banks.