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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. Common types of 'Derivatives'
Contract issued by an insurance company under which an investor provides the insurer with funds (a lump-sum or series of payments). The insurer then agrees to make periodic payments to the investor starting the immediately or in the future.
Countries should 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.
Futures contracts - forwards - swaps or options.
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.

2. Wire Transfers
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
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.
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.

3. GIABA
Reliable - independent source of documents - data or information.
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
Intergovernmental Action Group against Money Laundering in Africa
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

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...
foreign correspondent banks
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
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).

5. US law prohibhits Foriegn Shell Banks from ____?
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
Middle East and North Africa Financial Action Task Force
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)

6. Investment Adviser
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
Countering the Financing of Terrorism (Counter Terrorist Financing).
Person who - for compensation - provides advice on securities and investments and manages client assets.
Canada

7. Underwriting
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
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.
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.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.

8. When was the Offshore Group of Banking Supervisors established? What was the impetus behind its establishment?
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.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
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'.
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.

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

10. What do boiler room salespeople typically sell?
Penny Stocks
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.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
The world's largest private DB of stolen art.

11. 'Kiting' via credit card
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
no regulatory power or function
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.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.

12. FATF Recommendation 35
Placement - Layering - Integration.
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
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 take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.

13. FATF Recommendation 10
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
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.
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.

14. FATF Recommendation 25
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.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
A US Federal Court
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.

15. 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).
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
The nature of the request - the relevant criminal charges in the requesting country - the legal provision under which the request is made - and the information that is sought.

16. FATF Recommendation 32
a chain-referral scheme.
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.
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
Competent authorities should have powers of subpoena - search and seizure.

17. Agent (Insurance Industry)
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
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).
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
As 'felonies' or 'all offenses in the criminal code'.

18. Who issues the Internationa Narcotics Control Strategy Report (INCSR) and how often?
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.
The US State Dept issues the report annually.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
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.

19. (Credit Card) Third-Party processor
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
Confiscation
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.

20. Foriegn Shell Banks are vehicles for ______ & ______?
www.artloss.com
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
Money Laundering and Tax Evasion

21. What normal business practise makes 'Product Division' possible?
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
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.

22. How does the Egmont group help its members?
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
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.
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.
Freeze and confiscate terrorist assets.

23. Structuring is a common technique in jurisdictions that...
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
Combines funds from various members and users them to trade in futures or options contracts.
have in place compulsory currency reporting requirements.

24. What was the effect of the 1988 Vienna Convention as it relates to extradtition?
If provided for money laundering to be an internationally extraditable offense.
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.
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
Middle East and North Africa Financial Action Task Force

25. Dormant Account
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
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.
An account that does not show activity other than the posting of interest or account maintenance fees.
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.

26. What can result from on institution's disregard for the Basel Due Diligence Principle?
Intergovernmental Action Group against Money Laundering in Africa
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
A market is which securities are bought and sold outside of establisehd securities markets.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.

27. Why do companies export their goods at prices far below those in their home country?
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
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.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.

28. What is the goal of the Egmont group?

29. 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.
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
Combines funds from various members and users them to trade in futures or options contracts.
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.

30. The Vienns Convention
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
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.
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 co-operative property seller agrees to sell home at a well-below market reported price - then accepts the difference 'under the table'. When launderer later sells house - he recognizes 'gain' and all funds appear legitimate as it sold at market.

31. White-Collar crime

32. Who conducts the Financial Sector Assessment Program (FSAP)?
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
The International Monetary Fund (IMF) and the world bank conduct the joint program.
Foreign Corrupt Practices Act

33. How is 'Legal Risk' defined by the 2001 Basel Due Diligence Principles?
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
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.
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.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.

34. FATF Recommendation 15
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
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 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.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.

35. Counter Party
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
The opposing part of a transaction or trade.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.

36. Investigative Log
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.
have in place compulsory currency reporting requirements.
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.

37. Penny Stocks
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
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).
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.
disrupt or adversely afftect the business of the bank.

38. Examples of VSP's
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.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.

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

40. FATF Recommendation 34
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
2% - 5% ($590B - $1.5T)
Processes transactions for merchants who accept credit cards.
The International Monetary Fund (IMF) and the world bank conduct the joint program.

41. Cash Equivalent

42. OTC markets Over-The-Counter
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.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
A market is which securities are bought and sold outside of establisehd securities markets.

43. Commodity Trading Advisor
Open and Closed system
Futures contracts - forwards - swaps or options.
Typical mass-market banking where individual customers use local branches of larger commercial banks.
Direct or indirect advisor on buying and selling futures or commodity options.

44. FATF Sepcial Recommendation on Terrorist Financing -- SR Four
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
Report suspicious transactions linked to terrorism.
Reliable - independent source of documents - data or information.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.

45. What are some of the AML dangers of casino junkets?
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
The US State Dept issues the report annually.
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.
Reliable - independent source of documents - data or information.

46. Market Manipulation
a chain-referral scheme.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
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.

47. Credit Card Associations
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
Money Laundering and Tax Evasion
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.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).

48. Futures Commission Merchant (FCM)
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
EurAsian Group

49. FATF Recommendation 21
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
Stored Value Cards - Mobile Payments - Internet Payments.

50. As considered by UN and OECD - these are jurisdictions that have no or low tax rates - and do not attract real business or foreign investment
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
Harmful or Preferrential Tax Regimes.