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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. 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
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.

2. FATF Recommendation 36
The US State Dept issues the report annually.
Stored Value Cards - Mobile Payments - Internet Payments.
No.
Provide mutual legal assistance.

3. FATF Recommendation 25
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
EurAsian Group
that appear to be linked
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.

4. 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...
People who help move the billions of dollars drug traffickers earn around the world.
foreign correspondent banks
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.

5. Agent (Insurance Industry)
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).
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
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.

6. What was the target of UN Security Council Resolution 1267?
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.
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
Futures contracts - forwards - swaps or options.

7. Who are the parties involved in a trust?
Money Laundering and Tax Evasion
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
The FIU of the UK
have in place compulsory currency reporting requirements.

8. FATF Recommendation 19
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
Solicits potential customers and issues the credit cards.
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.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.

9. In Emerging Money Laundering Risks - what 3 areas are associated with 'Contractual Transactions'?
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
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.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.

10. Mutual Fund
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.
tipped off that they are being investigated.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.

11. Respondent Bank

12. FATF Recommendation 27
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
The opposing part of a transaction or trade.
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.

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

14. Corporate Bank

15. USA Patriot Act Section 312 'Offshore Bank'
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.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
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.
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.

16. What does FIU do beyond what FIU does?

17. Who appoints a 'Federal Receiver' (US)?
A US Federal Court
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
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.
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.

18. (Stock) Warrants
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.
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.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.

19. What was the target of UN Security Council Resolution 1373?
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'
Terrorism and Terrorist Financing
Financial Action Task Force on Money Laundering in South America
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 one of the Financial Service Authority's (UK) tasks?
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 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.
To reduce financial crime - including money laundering and terrorit financing.

21. 'Loan Back' method. Give example of how it works.

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

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

24. Why do convertible bonds oftern have lower interest rates than non-convertible bonds?
Solicits potential customers and issues the credit cards.
They can accrue value as the price of the underlying stock rises.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.

25. What are included in the Wolfsberg AML Principles on Private Banking?
Urge investors to buy 'house stocks' - stocks that the firm buys and sells as a market maker or has in its inventory. Oftentimes - they are running a 'pump-and-dumo' scheme.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.

26. What does the 'SEC' (US Securities and Exchange Commission) do?
Review customer files and conduct random sampling of accounts.
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.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.

27. Credit Card Associations
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
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'
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.

28. What are some of the AML dangers of casino junkets?
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
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.
Report suspicious transactions linked to terrorism.
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.

29. Open System Stored Value Card
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
EurAsian Group

30. Money Mules
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
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]
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
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.

31. Three stages of money laundering
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
Placement - Layering - Integration.
Futures contracts - forwards - swaps or options.
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.

32. FATF Recommendation 40
a Sr Management level
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
An account that does not show activity other than the posting of interest or account maintenance fees.

33. GIABA
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
Intergovernmental Action Group against Money Laundering in Africa
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)

34. GAFISUD
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
Financial Action Task Force on Money Laundering in South America
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.

35. Account Monitoring Order (UK and several other countries)
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.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
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.
Countering the Financing of Terrorism (Counter Terrorist Financing).

36. How does the Egmont group help its members?
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.
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.
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.
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.

37. FATF Recommendation 14
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.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
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.

38. Market Manipulation
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.
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
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.
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.

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

40. How do 'Hedge Funds' operate?

41. Portfolio Manager
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.
If provided for money laundering to be an internationally extraditable offense.
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.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.

42. What is the Wolfsberg group?
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
Pouch activity.
A market is which securities are bought and sold outside of establisehd securities markets.

43. FCPA (US)
Banking services between merchant banks and other financial institutions.
Processes transactions for merchants who accept credit cards.
Report suspicious transactions linked to terrorism.
Foreign Corrupt Practices Act

44. A pyramid scheme is also called...
The International Monetary Fund (IMF) and the world bank conduct the joint program.
a chain-referral scheme.
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.
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.

45. What is a Financial Intelligence Unit?
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.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.

46. Guaranteed Introducing Broker

47. FATF Recommendation 26
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
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.
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.

48. What is a 'Trust'?
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]
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.
Solicits potential customers and issues the credit cards.
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.

49. FATF Recommendation 8
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
2% - 5% ($590B - $1.5T)
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.

50. FATF Sepcial Recommendation on Terrorist Financing -- SR Four
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
Money Laundering and Tax Evasion
Report suspicious transactions linked to terrorism.
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.