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. Distribution Channels (Insurance Industry)
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
The means through which the insurance products and services are provided to a customer [FATF Risk-Based approach - Guidance for the Life Insurance Sector - Oct 09]
Solicits potential customers and issues the credit cards.
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.


2. What do boiler room salespeople typically do?

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3. FATF Sepcial Recommendation on Terrorist Financing -- SR Two
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
The US State Dept issues the report annually.
no regulatory power or function


4. 'Commission Rogatoire' known in English as?
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
They can accrue value as the price of the underlying stock rises.
Letters Rogatory
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.


5. What is meant by 'Know Your Customer's customer'?
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
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.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
A market is which securities are bought and sold outside of establisehd securities markets.


6. FATF Recommendation 4
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
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.


7. How is 'Identity theft' often accomplished?
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
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.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.


8. What is the aim of Joint Money Laundering Steering Group? (UK)
The world's largest private DB of stolen art.
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.
Terrorism and Terrorist Financing
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws


9. 'Introducing Broker-Dealers in Commodities' (IB-C)

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10. A 'panzi' scheme is named for whom?
Dealers in precious metals/stones - trust and company services providers - lawyers - notaries and accountants should all be required to report suspicious activity - but legal privilege cannot be violated.
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.
no regulatory power or function
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.


11. Commodity Pool
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.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
Combines funds from various members and users them to trade in futures or options contracts.
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.


12. Futures Commission Merchant (FCM)
The world's largest private DB of stolen art.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
Freeze and confiscate terrorist assets.


13. Common types of 'Derivatives'
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.
They can accrue value as the price of the underlying stock rises.
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.
Futures contracts - forwards - swaps or options.


14. FATF Recommendation 18
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.
Direct or indirect advisor on buying and selling futures or commodity options.
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.


15. May a shell bank maintain a correspondent account with a US bank?
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.
No.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
a Sr Management level


16. Fraud
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.


17. Underwriting
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 market is which securities are bought and sold outside of establisehd securities markets.
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.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.


18. According to FATF - financial transactions above a designated threshold may include situations where the transaction takes place in a single operation or in several operations...
that appear to be linked
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).


19. What was the target of UN Security Council Resolution 1373?
Strengthen customer identification measures in iternational and domestic wire transfers.
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
The FIU of Russia
Terrorism and Terrorist Financing


20. The Vienns Convention
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
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'
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.


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

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

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23. Many jurisdictions have legislation to ensure that suspects are not ____?
If provided for money laundering to be an internationally extraditable offense.
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.
tipped off that they are being investigated.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)


24. CFT
An account that does not show activity other than the posting of interest or account maintenance fees.
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
Countering the Financing of Terrorism (Counter Terrorist Financing).


25. 'Kiting' via credit card
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.
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.
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.


26. 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.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
disrupt or adversely afftect the business of the bank.
A fund setup by an investment trust that issues a fixed number of shares to its investors. As such - the market price of the shares fluctuates - often selling at a premium or discount to the fund's net asset value (NAV).


27. In Emerging Money Laundering Risks - what 3 methods are identified as 'Funds Transfers'?
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
2% - 5% ($590B - $1.5T)
Stored Value Cards - Mobile Payments - Internet Payments.
Direct or indirect advisor on buying and selling futures or commodity options.


28. FATF Recommendation 6
Reliable - independent source of documents - data or information.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
Typical mass-market banking where individual customers use local branches of larger commercial banks.


29. Commodity Pool Operator
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
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.


30. What normal business practise makes 'Product Division' possible?
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
Typical mass-market banking where individual customers use local branches of larger commercial banks.


31. FATF Recommendation 29
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
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.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.


32. Boiler Room
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
Refers to dishonest broker-dealers who set up a group of high pressure salespeople who use banks of telephones to make cold calls to as many potential investors as possible.
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.


33. Wholesale Banking
Banking services between merchant banks and other financial institutions.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
Strengthen customer identification measures in iternational and domestic wire transfers.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.


34. Wire Transfers
The world's largest private DB of stolen art.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
Funds transfers - Shell Corporations - Contractual Transactions.


35. 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.
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.
Harmful or Preferrential Tax Regimes.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws


36. Retail Banking
bear the mark 'APOSTILLE'
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.
Typical mass-market banking where individual customers use local branches of larger commercial banks.
Competent authorities should have powers of subpoena - search and seizure.


37. What is important about the US Money Laundering Control Act (MCLA)?
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
The means through which the insurance products and services are provided to a customer [FATF Risk-Based approach - Guidance for the Life Insurance Sector - Oct 09]
It was the first law in any country to make money laundering a crime.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.


38. OCC Office of the Comptroller of the Currency
Futures contracts - forwards - swaps or options.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
If provided for money laundering to be an internationally extraditable offense.
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.


39. Examples of VSP's
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.
Foreign Corrupt Practices Act
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.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.


40. What tend to be the markings of Private Banking transactions?
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
tipped off that they are being investigated.
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
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.


41. FATF Recommendation 13
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
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.
Letters Rogatory
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.


42. FATF Recommendation 35
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
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.
2% - 5% ($590B - $1.5T)
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.


43. FATF Recommendation 26
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
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.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.


44. FATF Sepcial Recommendation on Terrorist Financing -- SR Eight
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
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.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.


45. What is a 'NCCT'?
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.


46. Account Monitoring Order (UK and several other countries)
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.
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
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.


47. Dormant Account
To reduce financial crime - including money laundering and terrorit financing.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
Open and Closed system
An account that does not show activity other than the posting of interest or account maintenance fees.


48. Why is understanding 'Product Diversion' important to the AML investigator?
The opposing part of a transaction or trade.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
Intergovernmental Action Group against Money Laundering in Africa
Their financial institution may - wittingly or unwittingly - handle the proceeds of this crime while believing it is serving a legitimate client with major account balances.


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

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50. Why does a launderer try to run transactions through a concentration account of a financial institution?
As a financial institution service that is very vulnerable to money laundering.
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.