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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. FATF Sepcial Recommendation on Terrorist Financing -- SR Three
tipped off that they are being investigated.
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.
Freeze and confiscate terrorist assets.
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.

2. What does the 'SEC' (US Securities and Exchange Commission) do?
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
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]
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
Intergovernmental Action Group against Money Laundering in Africa

3. When is a jurisdiction considered to be 'ring-fenced'?
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
Processes transactions for merchants who accept credit cards.
Freeze and confiscate terrorist assets.
Financial Action Task Force on Money Laundering in South America

4. The IMF estimates that laundered funds compromise ______ of the world's GDP
2% - 5% ($590B - $1.5T)
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.
Expatriates sending money back to their home country or by other individuals sending money abroad.
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.

5. FATF Recommendation 31
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.

6. What do boiler room salespeople typically sell?
Penny Stocks
People who help move the billions of dollars drug traffickers earn around the world.
a chain-referral scheme.
Freeze and confiscate terrorist assets.

7. Open System Stored Value Card
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
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 transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
Intergovernmental Action Group against Money Laundering in Africa

8. 'Commission Rogatoire' known in English as?
Market participants intentionally restrict a security's liquidity. May lead to increased profits when the security's price rises due to the lack of 'supply'.
Letters Rogatory
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.

9. 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.
Processes transactions for merchants who accept credit cards.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
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

10. Why do companies export their goods at prices far below those in their home country?
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.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
a chain-referral scheme.

11. SRO (Self-Regulatory Organizations)
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
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.
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.

12. Commodity Pool
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
Combines funds from various members and users them to trade in futures or options contracts.
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.

13. Why is 'Know Your Correspondent Bank' important?
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
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.
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)

14. FATF Recommendation 33
A market is which securities are bought and sold outside of establisehd securities markets.
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
Expatriates sending money back to their home country or by other individuals sending money abroad.
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data

15. In general terms - EDD requires what of a financial institution?

16. Commodity
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
Confiscation
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
A market is which securities are bought and sold outside of establisehd securities markets.

17. Examples of VSP's
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
Review customer files and conduct random sampling of accounts.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.

18. FATF Recommendation 15
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.

19. Wholesale Banking
Banking services between merchant banks and other financial institutions.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
The world's largest private DB of stolen art.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.

20. What was the target of UN Security Council Resolution 1373?
Financial Action Task Force on Money Laundering in South America
Terrorism and Terrorist Financing
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
Reliable - independent source of documents - data or information.

21. 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...
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
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).
foreign correspondent banks

22. FATF Sepcial Recommendation on Terrorist Financing -- SR Four
Report suspicious transactions linked to terrorism.
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.

23. FATF Recommendation 25
Terrorism and Terrorist Financing
Solicits potential customers and issues the credit cards.
Canada
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.

24. Arrest Warrant
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]
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.
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.
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.

25. FATF Sepcial Recommendation on Terrorist Financing -- SR One
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
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
Terrorism and Terrorist Financing
Take immediate steps to ratify and implement the UN instruments.

26. What is the FCPA primarily known for?
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).
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
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.

27. FATF Recommendation 26
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).
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
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 have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.

28. FATF Recommendation 38
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.
no regulatory power or function
As a financial institution service that is very vulnerable to money laundering.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.

29. FATF Recommendation 6
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
As a financial institution service that is very vulnerable to money laundering.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.

30. What is a Financial Intelligence Unit?
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.
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.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.

31. FATF Recommendation 17
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
Strengthen customer identification measures in iternational and domestic wire transfers.
Provide mutual legal assistance.
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.

32. What is meant by 'Know Your Correspondent Bank'?

33. Dematerialization of Securities

34. Commodity Trading Advisor
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.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
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.
Direct or indirect advisor on buying and selling futures or commodity options.

35. FATF Recommendation 1
The US State Dept issues the report annually.
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.

36. What is one of the Financial Service Authority's (UK) tasks?
To reduce financial crime - including money laundering and terrorit financing.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.

37. Characteristics of an 'Open System Stored Value Card'
Futures contracts - forwards - swaps or options.
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.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
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.

38. FATF Recommendation 23
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.
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.
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.
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.

39. What normal business practise makes 'Product Division' possible?
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
Competent authorities should have powers of subpoena - search and seizure.
Provide mutual legal assistance.
Impose AML requirements on alternative remittance systems.

40. FATF Recommendations examples of non-financial businesses and professions
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
Stored Value Cards - Mobile Payments - Internet Payments.
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.
Open and Closed system

41. Reverse Flip

42. What does Financial Sector AssessmentProgram (FSAP) do?
Terrorism and Terrorist Financing
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.

43. FATF Recommendation 40
www.artloss.com
Person who - for compensation - provides advice on securities and investments and manages client assets.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
The UN Convention against Transnational Organized Crime [Adopted 12/2000].

44. FATF Recommendation 21
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
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.
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.

45. What does the principal US money laundering law look for before implementing its 'Extraterritorial Reach'?
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
Countering the Financing of Terrorism (Counter Terrorist Financing).
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data

46. Why does a launderer try to run transactions through a concentration account of a financial institution?
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.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.

47. Examples of White-collar crime
Review customer files and conduct random sampling of accounts.
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
Money Laundering and Tax Evasion
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.

48. What is the Serious Organised Crime Agency (SOCA)?
The FIU of the UK
The world's largest private DB of stolen art.
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.

49. In Emerging Money Laundering Risks - what 3 areas are associated with 'Contractual Transactions'?
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
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.
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.

50. The Palemo Convention
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
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.
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.
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.