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 are the three main functions of a 'Transfer Agent'?
Middle East and North Africa Financial Action Task Force
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
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).
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.


2. Arrest Warrant
have in place compulsory currency reporting requirements.
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.
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.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.


3. A public perception that a bank is not able to manage its operational risk effectively can...
The International Monetary Fund (IMF) and the world bank conduct the joint program.
disrupt or adversely afftect the business of the bank.
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.


4. FATF Recommendation 29
The world's largest private DB of stolen art.
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.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
People who help move the billions of dollars drug traffickers earn around the world.


5. Agent (Insurance Industry)
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
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.


6. FATF Recommendation 23
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
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.
Financial Action Task Force


7. FATF Recommendation 22

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8. What is one of the cental stragetic tools required for effective action against money laundering?
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
Confiscation
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.
Intergovernmental Action Group against Money Laundering in Africa


9. Market Manipulation
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
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'
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.


10. FATF Recommendation 9
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.
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.
Direct money of Criminal A is sent to foreign bank account of company B. Investment company C is formed as A's country. A is appointed as director of C. C borrows money from B and buys building which is rented to 3rd parties. with rent - C pays off B
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.


11. OTC markets Over-The-Counter
A market is which securities are bought and sold outside of establisehd securities markets.
An electronic quotation system that displays quotes of many securities traded over the counter.
a Sr Management level
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).


12. EAG
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
a chain-referral scheme.
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
EurAsian Group


13. The USA Patriot Act enacted a number of statutory provisions that bear directly on the procedures US financial institutions must follow in connection with their...
foreign correspondent banks
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.
As 'felonies' or 'all offenses in the criminal code'.
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'


14. Derivatives
no regulatory power or function
The opposing part of a transaction or trade.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.


15. What is one of the Financial Service Authority's (UK) tasks?
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.
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
To reduce financial crime - including money laundering and terrorit financing.


16. Affidavit
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
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.
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.
Procedures used to determine the beneficial owners of a correspondent bank and the type of activity that wil be 'normal and expected' for the bank.


17. Commodity Pool
Combines funds from various members and users them to trade in futures or options contracts.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
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.
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.


18. GAFISUD
A fund setup by an investment trust in which the number of shares can fluctuate as investors' move in and out the fund. Share prices moves in direct proportion of the net asset value of the underlying investments (no premium or discount).
A 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.
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.
Financial Action Task Force on Money Laundering in South America


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

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20. Fraud
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
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.


21. (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.
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.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
Solicits potential customers and issues the credit cards.


22. FATF Recommendation 28
Competent authorities should have powers of subpoena - search and seizure.
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
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.
Expatriates sending money back to their home country or by other individuals sending money abroad.


23. Dematerialization of Securities

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24. What does the principal US money laundering law look for before implementing its 'Extraterritorial Reach'?
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.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
They pool investors' money and invest those funds in financial instruments in an effort to turn a profit. They typically issue securities in 'private offerings' that are usually not required to be registered with sa securities or financial regulator.
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


25. Corporate Bank

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26. Why is 'refining' critical to a money launderer's efforts?
www.artloss.com
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
As a financial institution service that is very vulnerable to money laundering.


27. Why does a launderer try to run transactions through a concentration account of a financial institution?
Direct money of Criminal A is sent to foreign bank account of company B. Investment company C is formed as A's country. A is appointed as director of C. C borrows money from B and buys building which is rented to 3rd parties. with rent - C pays off B
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
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.


28. Example of use of an Apostille
Financial Action Task Force
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.
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]
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.


29. Examples of VSP's
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
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 FIU of Russia


30. Reverse Flip

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31. FATF Sepcial Recommendation on Terrorist Financing -- SR Four
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.
Report suspicious transactions linked to terrorism.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
A record that financial institutions must retain for each cash sale of bank checks - drafts - money orders - cashier's checks and traveller's checks between $3 -000 and $10 -000.


32. 'Competent Authorities' refers to _____.
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
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.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
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.


33. Wire Transfers
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.
No.
Countering the Financing of Terrorism (Counter Terrorist Financing).
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.


34. Many jurisdictions have legislation to ensure that suspects are not ____?
Intergovernmental Action Group against Money Laundering in Africa
Money Laundering and Tax Evasion
Report suspicious transactions linked to terrorism.
tipped off that they are being investigated.


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

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36. FATF Sepcial Recommendation on Terrorist Financing -- SR Three
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.
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.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
Freeze and confiscate terrorist assets.


37. The 'Art Loss Register'

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38. How do most governments view Private Banking?
Countering the Financing of Terrorism (Counter Terrorist Financing).
As a financial institution service that is very vulnerable to money laundering.
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.
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.


39. Who issues the Internationa Narcotics Control Strategy Report (INCSR) and how often?
They can accrue value as the price of the underlying stock rises.
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 US State Dept issues the report annually.
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.


40. 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...
no regulatory power or function
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
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.
Financial Action Task Force on Money Laundering in South America


41. FATF Recommendation 36
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
Provide mutual legal assistance.
Funds transfers - Shell Corporations - Contractual Transactions.


42. What were recently identified as Emerging Money Laundering risks?
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.
Funds transfers - Shell Corporations - Contractual Transactions.


43. FATF Recommendation 6
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
Review customer files and conduct random sampling of accounts.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.


44. FATF Recommendation 38
Stored Value Cards - Mobile Payments - Internet Payments.
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.
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.
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.


45. FATF Recommendation 16
Financial Action Task Force on Money Laundering in South America
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
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.
no regulatory power or function


46. What must a financial institution do if they have 'Exempt Accounts'?
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
The US State Dept issues the report annually.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.


47. Retail Banking
Stored Value Cards - Mobile Payments - Internet Payments.
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.
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.
Typical mass-market banking where individual customers use local branches of larger commercial banks.


48. Structuring is a common technique in jurisdictions that...
have in place compulsory currency reporting requirements.
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]
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.


49. Counter Party
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
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.
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
The opposing part of a transaction or trade.


50. Convertible Bond
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.
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 ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.