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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. The Palemo Convention
Review customer files and conduct random sampling of accounts.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
Futures contracts - forwards - swaps or options.

2. Identification data
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
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.

3. FATF Sepcial Recommendation on Terrorist Financing -- SR Three
Report suspicious transactions linked to terrorism.
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.
Freeze and confiscate terrorist assets.
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.

4. In what country is the Egmont Group Secretariat now located?
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
Applied by an authority - it is a special seal which certifies that a document is a true copy of an original. However - it does not and cannot speak to the validity of the document's content.
Canada

5. Three stages of money laundering
Placement - Layering - Integration.
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.
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
Canada

6. FATF Recommendation 23
a chain-referral scheme.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
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).
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.

7. FATF Recommendation 22

8. In Emerging Money Laundering Risks - what 3 areas are associated with 'Contractual Transactions'?
The world's largest private DB of stolen art.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
If provided for money laundering to be an internationally extraditable offense.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.

9. FATF Recommendation 25
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.
Applied by an authority - it is a special seal which certifies that a document is a true copy of an original. However - it does not and cannot speak to the validity of the document's content.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.

10. What is the goal of the Egmont group?

11. FATF Recommendation 21
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'
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
Foreign Corrupt Practices 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.

12. 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...
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
Stored Value Cards - Mobile Payments - Internet Payments.
foreign correspondent banks
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.

13. 'Commission Rogatoire' known in English as?
Letters Rogatory
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.

14. What does the 'SEC' (US Securities and Exchange Commission) do?
The FIU of Russia
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.

15. FATF Recommendation 38
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
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.
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.

16. FATF Recommendation 17
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 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.
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.

17. 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.

18. Free Look Period
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.

19. What the primary objectives of Offshore Group of Banking Supervisors?
To promote the effective supervision of banks in their jurisdictions; to further international cooperation in the supervision between the Offshore Banking Supervisors - and with Basel committee member nations and other banking supervisors.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
They pool investors' money and invest those funds in financial instruments in an effort to turn a profit. They typically issue securities in 'private offerings' that are usually not required to be registered with sa securities or financial regulator.

20. FATF Recommendation 16
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.
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
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.

21. The 'Art Loss Register'

22. FATF Sepcial Recommendation on Terrorist Financing -- SR Four
Applied by an authority - it is a special seal which certifies that a document is a true copy of an original. However - it does not and cannot speak to the validity of the document's content.
Report suspicious transactions linked to terrorism.
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.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.

23. What is a Financial Intelligence Unit?
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.

24. 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.
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.
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.
Confiscation

25. Express Trust
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.

26. FATF Recommendation 8
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.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
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 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.

27. Investigative Log
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
The US State Dept issues the report annually.

28. Cash Equivalent

29. Open System Stored Value Card
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
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 a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
Foreign Corrupt Practices Act

30. What are some of the AML dangers of casino junkets?
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.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
May involve movement or large sums of money going cross-border and often through multiple casinos - all by a third party (the operator). Sometime operator does not identify funds owners.
Foreign Corrupt Practices Act

31. What does theInternationa Narcotics Control Strategy Report (INCSR) entail?
As a financial institution service that is very vulnerable to money laundering.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
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.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.

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

33. Abusive Squeezes

34. How is 'Legal Risk' defined by the 2001 Basel Due Diligence Principles?
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).
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.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
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.

35. Why is understanding 'Product Diversion' important to the AML investigator?
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.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
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.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.

36. FATF Recommendation 6
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
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.

37. Margin
Terrorism and Terrorist Financing
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.
bear the mark 'APOSTILLE'
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.

38. Examples of White-collar crime
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.
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
Countering the Financing of Terrorism (Counter Terrorist Financing).

39. What is important about the US Money Laundering Control Act (MCLA)?
As 'felonies' or 'all offenses in the criminal code'.
It was the first law in any country to make money laundering a crime.
Strengthen customer identification measures in iternational and domestic wire transfers.
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'.

40. FATF Recommendations examples of non-financial businesses and professions
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.
no regulatory power or function
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
Take immediate steps to ratify and implement the UN instruments.

41. What is one of the Financial Service Authority's (UK) tasks?
To reduce financial crime - including money laundering and terrorit financing.
www.artloss.com
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
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.

42. OCC Office of the Comptroller of the Currency
The US State Dept issues the report annually.
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.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.

43. What does a 'Commission Rogatoire' normally specify?
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
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).
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
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.

44. What does FIU do?
A US Federal Court
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
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.
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.

45. 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 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.
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.
Funds transfers - Shell Corporations - Contractual Transactions.

46. What is the aim of Joint Money Laundering Steering Group? (UK)
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
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 US Federal Court

47. What is one of the cental stragetic tools required for effective action against money laundering?
Confiscation
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
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.

48. FATF Recommendation 13
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.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
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.

49. 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...
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.
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.
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.
no regulatory power or function

50. FATF Sepcial Recommendation on Terrorist Financing -- SR Six
Impose AML requirements on alternative remittance systems.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
An account that does not show activity other than the posting of interest or account maintenance fees.
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.