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 normal business practise makes 'Product Division' possible?
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
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.


2. Express Trust
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
The world's largest private DB of stolen art.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.


3. What do boiler room salespeople typically sell?
Penny Stocks
The International Monetary Fund (IMF) and the world bank conduct the joint program.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.


4. What does an Extradition Treaty specify?
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.


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

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6. FATF Recommendation 17
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.


7. A 'panzi' scheme is named for whom?
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
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.
Foreign Corrupt Practices Act
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.


8. What does the 'SEC' (US Securities and Exchange Commission) do?
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.


9. When is a jurisdiction considered to be 'ring-fenced'?
Canada
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
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.


10. What were recently identified as Emerging Money Laundering risks?
Funds transfers - Shell Corporations - Contractual Transactions.
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.


11. Options/Options Contract
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
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.
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.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.


12. Bust-out
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
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.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.


13. Why is 'Know Your Correspondent Bank' important?
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.
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.
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.
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.


14. Derivatives
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.
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.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.


15. What is a Financial Intelligence Unit?
Reliable - independent source of documents - data or information.
Penny Stocks
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.


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

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17. 'Commission Rogatoire' known in English as?
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
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
Letters Rogatory
have in place compulsory currency reporting requirements.


18. A pyramid scheme is also called...
bear the mark 'APOSTILLE'
a chain-referral scheme.
Impose AML requirements on alternative remittance systems.
It was the first law in any country to make money laundering a crime.


19. Underwriting
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.
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.
a Sr Management level
As a financial institution service that is very vulnerable to money laundering.


20. FATF Recommendation 23
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
A market is which securities are bought and sold outside of establisehd securities markets.
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.
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.


21. FATF Recommendation 5
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
no regulatory power or function
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.


22. FATF Sepcial Recommendation on Terrorist Financing -- SR Seven
The US State Dept issues the report annually.
Strengthen customer identification measures in iternational and domestic wire transfers.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.


23. What was the target of UN Security Council Resolution 1373?
Terrorism and Terrorist Financing
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.


24. FATF Recommendation 31
Foreign Corrupt Practices Act
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.


25. Why is 'Know Your Customer's Customer' important?
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.
Impose AML requirements on alternative remittance systems.
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
The FIU of Russia


26. FATF Recommendation 7

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27. A public perception that a bank is not able to manage its operational risk effectively can...
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
The FIU of the UK
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
disrupt or adversely afftect the business of the bank.


28. What is one of the Financial Service Authority's (UK) tasks?
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
To reduce financial crime - including money laundering and terrorit financing.
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.


29. (Credit card) Acquiring Bank
Processes transactions for merchants who accept credit cards.
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
EurAsian Group
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'.


30. White-Collar crime

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31. UK courts view on 'Suspicion'
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.
No.
A degree of satisfaction not necessarily amounting to belief but extending beyond specualtionas to whether an event has occured or not. Though suspicion requires a lesser factual basis than a belief - it must be built upon some foundation.


32. The IMF estimates that laundered funds compromise ______ of the world's GDP
2% - 5% ($590B - $1.5T)
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
As a financial institution service that is very vulnerable to money laundering.


33. Scheme
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
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.


34. Characteristics of an 'Open System Stored Value Card'
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.
Processes transactions for merchants who accept credit cards.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.


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

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36. The Palemo Convention
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.
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
Competent authorities should have powers of subpoena - search and seizure.
Typical mass-market banking where individual customers use local branches of larger commercial banks.


37. (Credit Card) Third-Party processor
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
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.
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.


38. Cash Letter
The world's largest private DB of stolen art.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
Direct or indirect advisor on buying and selling futures or commodity options.
A market is which securities are bought and sold outside of establisehd securities markets.


39. When was the Offshore Group of Banking Supervisors established? What was the impetus behind its establishment?
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
It was the first law in any country to make money laundering a crime.
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.


40. FATF's designated transactional threshold for Casinos (including Internet Casinos) is _____.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
A Correspondent Banking Client who receives Corresponding Banking services from an institution and itself provides Correspondent Banking services to other financial institutions in the same currency as the account it maintains with the institution.
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)


41. Basel's 'CDD for Banks' states that the decision to open an account for a PEP should be taken at...
Funds transfers - Shell Corporations - Contractual Transactions.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
An account that does not show activity other than the posting of interest or account maintenance fees.
a Sr Management level


42. FATF Recommendation 8
To provide a forum for FIU's (Financial Intelligence Unit) to improve support to their respective national AML progrmans and development protocols for the sharing of information.
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
Typical mass-market banking where individual customers use local branches of larger commercial banks.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.


43. FATF Recommendation 11
No.
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.
EurAsian Group
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.


44. The Joint Money Laundering Steering Group (UK) has published a series of AML Guidance Notes for different sectors of the financial community. But - As a group of trade associations - it has...
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).
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.
no regulatory power or function
Solicits potential customers and issues the credit cards.


45. FATF Recommendation 39
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.
tipped off that they are being investigated.
Countries should recognize money laundering as an extraditable offense.
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.


46. Operational risks in KYC context relate to...
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
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).


47. Examples of VSP's
Pouch activity.
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.


48. Who are the parties involved in a trust?
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.


49. What is the aim of Joint Money Laundering Steering Group? (UK)
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
The opposing part of a transaction or trade.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
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.


50. Pink Sheets
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
An electronic quotation system that displays quotes of many securities traded over the counter.
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.