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. Nostro

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2. What criterion does the US need to enforce its 'Extraterritorial Reach'?

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3. 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
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
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.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.


4. Example of use of an Apostille
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
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.
Middle East and North Africa Financial Action Task Force


5. FATF Recommendation 25
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
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.


6. Examples of White-collar crime
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
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.


7. Mutual Fund
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
a Sr Management level
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.


8. When was the Offshore Group of Banking Supervisors established? What was the impetus behind its establishment?
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
Terrorism and Terrorist Financing
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).


9. Structuring is a common technique in jurisdictions that...
have in place compulsory currency reporting requirements.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
Banking services between merchant banks and other financial institutions.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.


10. FATF Recommendation 8
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
Pouch activity.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.


11. FATF Recommendation 19
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
Intergovernmental Action Group against Money Laundering in Africa


12. Many jurisdictions have legislation to ensure that suspects are not ____?
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
tipped off that they are being investigated.
It conducts investigations in support of a government's confiscation or seizure efforts.
The FIU of the UK


13. Abusive Squeezes

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14. UK courts view on 'Suspicion'
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.
Direct or indirect advisor on buying and selling futures or commodity options.
No.
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.


15. Dematerialization of Securities

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16. Moneyval
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
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.


17. 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.
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).
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
Penny Stocks


18. FATF Recommendation 38
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
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 world's largest private DB of stolen art.
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.


19. What is a Financial Intelligence Unit?
'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.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.


20. What is the significance of 'Non-Financial Trades and Businesses' in realtion to Money Laundering?
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
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.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.


21. FATF Sepcial Recommendation on Terrorist Financing -- SR Three
Pouch activity.
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).
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.


22. (Stock) Warrants
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
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.
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.


23. FATF Recommendation 22

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24. Why does a launderer try to run transactions through a concentration account of a financial institution?
Harmful or Preferrential Tax Regimes.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
no regulatory power or function
Confiscation


25. Who appear to be predominant users of hawalas and other alternative remittance systems?
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.
Expatriates sending money back to their home country or by other individuals sending money abroad.
Intergovernmental Action Group against Money Laundering in Africa
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.


26. Margin
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
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.
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.


27. Legal Arrangements (Insurance Industry)
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 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.
Take immediate steps to ratify and implement the UN instruments.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.


28. Fraud
No.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
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.


29. What was the target of UN Security Council Resolution 1373?
Confiscation
Terrorism and Terrorist Financing
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
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.


30. What does a 'Commission Rogatoire' normally specify?
Letters Rogatory
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.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.


31. Penny Stocks
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
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.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
Open and Closed system


32. 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.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
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.


33. 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...
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.
Harmful or Preferrential Tax Regimes.
foreign correspondent banks
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.


34. How are 'Predicate Crimes' sometimes identified?

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35. How is 'Legal Risk' defined by the 2001 Basel Due Diligence Principles?
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.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
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.


36. What is the aim of Joint Money Laundering Steering Group? (UK)
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
Impose AML requirements on alternative remittance systems.
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws


37. Why is understanding 'Product Diversion' important to the AML investigator?
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.
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 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.
Their financial institution may - wittingly or unwittingly - handle the proceeds of this crime while believing it is serving a legitimate client with major account balances.


38. Underwriting
Confiscation
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.
Canada
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.


39. What does FIU do?
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
Futures contracts - forwards - swaps or options.
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
Person who - for compensation - provides advice on securities and investments and manages client assets.


40. Commodity
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.


41. FATF Sepcial Recommendation on Terrorist Financing -- SR Nine
Take immediate steps to ratify and implement the UN instruments.
Funds transfers - Shell Corporations - Contractual Transactions.
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.


42. Behaviour detection

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43. FATF Recommendation 20
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
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 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.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.


44. The Palemo Convention
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
Intergovernmental Action Group against Money Laundering in Africa
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
Freeze and confiscate terrorist assets.


45. FATF Sepcial Recommendation on Terrorist Financing -- SR Six
Futures contracts - forwards - swaps or options.
have in place compulsory currency reporting requirements.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
Impose AML requirements on alternative remittance systems.


46. CFT
Countering the Financing of Terrorism (Counter Terrorist Financing).
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
It was the first law in any country to make money laundering a crime.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.


47. FATF Recommendation 16
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.
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
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.


48. Commodity Pool
A US Federal Court
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.
Combines funds from various members and users them to trade in futures or options contracts.
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.


49. Credit Card Associations
No.
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
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]


50. What are the two types of Stored Value Cards?
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.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
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.
Open and Closed system