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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. Why is 'Know Your Customer's Customer' important?
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
Reliable - independent source of documents - data or information.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.

2. A notary can issue a Apostille but it must be in a country that signed The Hague Convention (1961) and it must ___________. If the notary doesn't understand - find another one.

3. US law prohibhits Foriegn Shell Banks from ____?
A US Federal Court
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.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
Quite simply - a plan. While in the US - this term is often associated with a nefarious plan - it should NOT be assumed to be evil - especially as it may appear on the ACAMS exam.

4. Underwriting
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
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.
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
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.

5. Reverse Flip

6. FATF Recommendation 37
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
The FIU of the UK
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
Quite simply - a plan. While in the US - this term is often associated with a nefarious plan - it should NOT be assumed to be evil - especially as it may appear on the ACAMS exam.

7. The Palemo Convention
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
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.

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

9. What is the goal of FSAP?
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.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.

10. FATF Recommendation 5
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
Terrorism and Terrorist Financing

11. What is the goal of the Egmont group?

12. Futures Commission Merchant (FCM)
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
tipped off that they are being investigated.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.

13. FATF Recommendation 23
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.
Terrorism and Terrorist Financing
Impose AML requirements on alternative remittance systems.
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.

14. Fraud
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.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
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.
no regulatory power or function

15. (Credit card) Acquiring Bank
Countries should recognize money laundering as an extraditable offense.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
Processes transactions for merchants who accept credit cards.
The FIU of Russia

16. A 'Cash Letter' can also be referred to as _____.
Harmful or Preferrential Tax Regimes.
The International Monetary Fund (IMF) and the world bank conduct the joint program.
Pouch activity.
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].

17. Commodity Pool Operator
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
A US Federal Court
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.

18. SRO (Self-Regulatory Organizations)
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.
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.
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.

19. Why does a launderer try to run transactions through a concentration account of a financial institution?
Freeze and confiscate terrorist assets.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.

20. FATF Recommendation 25
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.
Terrorism and Terrorist Financing
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.

21. OCC Office of the Comptroller of the Currency
Person who - for compensation - provides advice on securities and investments and manages client assets.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.

22. Short Sale

23. Investment Adviser
Person who - for compensation - provides advice on securities and investments and manages client assets.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
A market is which securities are bought and sold outside of establisehd securities markets.

24. FATF Recommendation 27
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.
a Sr Management level
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
Terrorism and Terrorist Financing

25. 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.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
a chain-referral scheme.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.

26. FATF Recommendation 8
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
Letters Rogatory
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
Quite simply - a plan. While in the US - this term is often associated with a nefarious plan - it should NOT be assumed to be evil - especially as it may appear on the ACAMS exam.

27. Why is it imperative to have a strong Know Your Employee program?
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
Person who - for compensation - provides advice on securities and investments and manages client assets.
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.

28. In Emerging Money Laundering Risks - what 3 methods are identified as 'Funds Transfers'?
Strengthen customer identification measures in iternational and domestic wire transfers.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
Stored Value Cards - Mobile Payments - Internet Payments.
They can accrue value as the price of the underlying stock rises.

29. 'Coucil of Europe Convention on Laundering - Search - Seizure and Confiscation of the Proceeds from Crime' is known for what?
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
Person who - for compensation - provides advice on securities and investments and manages client assets.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].

30. FATF Sepcial Recommendation on Terrorist Financing -- SR Seven
Strengthen customer identification measures in iternational and domestic wire transfers.
that appear to be linked
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.

31. Why is understanding 'Product Diversion' important to the AML investigator?
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.
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
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.
A record that financial institutions must retain for each cash sale of bank checks - drafts - money orders - cashier's checks and traveller's checks between $3 -000 and $10 -000.

32. Commodity
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.

33. The IMF estimates that laundered funds compromise ______ of the world's GDP
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.
2% - 5% ($590B - $1.5T)
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.

34. FATF Recommendation 22

35. FATF's designated transactional threshold for Casinos (including Internet Casinos) is _____.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Freeze and confiscate terrorist assets.

36. What does the principal US money laundering law look for before implementing its 'Extraterritorial Reach'?
The FIU of the UK
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
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.
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

37. UK courts view on 'Suspicion'
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
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.
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
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.

38. Apostille

39. How do most governments view Private Banking?
As a financial institution service that is very vulnerable to money laundering.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
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.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.

40. Agent (Insurance Industry)
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.
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
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
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.

41. What is one of the Financial Service Authority's (UK) tasks?
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
To reduce financial crime - including money laundering and terrorit financing.
Solicits potential customers and issues the credit cards.
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.

42. Where is the Art Loss Register found?
Provide mutual legal assistance.
www.artloss.com
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.

43. What must a financial institution do if they have 'Exempt Accounts'?
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
Financial Action Task Force on Money Laundering in South America
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.

44. FATF Recommendation 39
The US State Dept issues the report annually.
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.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
Countries should recognize money laundering as an extraditable offense.

45. FATF Recommendation 10
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
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.

46. What was the target of UN Security Council Resolution 1373?
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
Terrorism and Terrorist Financing

47. FATF Recommendation 4
Pouch activity.
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
Strengthen customer identification measures in iternational and domestic wire transfers.

48. EAG
EurAsian Group
An electronic quotation system that displays quotes of many securities traded over the counter.
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.
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.

49. 'Open-end Mutual Fund' (or Company)

50. FATF Recommendation 29
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
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.
Quite simply - a plan. While in the US - this term is often associated with a nefarious plan - it should NOT be assumed to be evil - especially as it may appear on the ACAMS exam.