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. How is 'Identity theft' often accomplished?
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
Strengthen customer identification measures in iternational and domestic wire transfers.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.


2. FATF Recommendation 29
a chain-referral scheme.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.


3. FATF Recommendation 5
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.


4. USA Patriot Act Section 312 'Offshore Bank'
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.
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).
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
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.


5. What does FIU do?
Combines funds from various members and users them to trade in futures or options contracts.
www.artloss.com
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.


6. FATF Recommendation 30
bear the mark 'APOSTILLE'
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.


7. What does theInternationa Narcotics Control Strategy Report (INCSR) entail?
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
Expatriates sending money back to their home country or by other individuals sending money abroad.
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 detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.


8. 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.
The opposing part of a transaction or trade.
Passed in 1977 - the US law is primarily known for its anti-bribery provisions (it also applies to foreign companies with stocks covered by the Securities and Exchange Act of 1934).
a chain-referral scheme.


9. The Vienns Convention
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
As a financial institution service that is very vulnerable to money laundering.
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).
Placement - Layering - Integration.


10. FATF Recommendation 40
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.
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.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
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.


11. FATF Recommendation 26
Countering the Financing of Terrorism (Counter Terrorist Financing).
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.


12. FATF Sepcial Recommendation on Terrorist Financing -- SR Seven
Strengthen customer identification measures in iternational and domestic wire transfers.
Solicits potential customers and issues the credit cards.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
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.


13. What were recently identified as Emerging Money Laundering risks?
Funds transfers - Shell Corporations - Contractual Transactions.
Report suspicious transactions linked to terrorism.
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).
Terrorism and Terrorist Financing


14. Pink Sheets
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
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'.
An electronic quotation system that displays quotes of many securities traded over the counter.


15. A public perception that a bank is not able to manage its operational risk effectively can...
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
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.
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.
disrupt or adversely afftect the business of the bank.


16. FATF Recommendation 36
Intergovernmental Action Group against Money Laundering in Africa
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.
Provide mutual legal assistance.
a Sr Management level


17. Who appoints a 'Federal Receiver' (US)?
Refers to express trusts or other similar legal arrangements - such as fiducie - treuhand and fideicomiso [FATF Risk-Based approach - Guidance for the Life Insurance Sector - Oct 09]
Competent authorities should have powers of subpoena - search and seizure.
A US Federal Court
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.


18. Counter Party
The opposing part of a transaction or trade.
The world's largest private DB of stolen art.
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
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.


19. Boiler Room
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.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
People who help move the billions of dollars drug traffickers earn around the world.


20. 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.
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.
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.
Provide mutual legal assistance.


21. What was the effect of the 1988 Vienna Convention as it relates to extradtition?
If provided for money laundering to be an internationally extraditable offense.
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.
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.


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

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23. 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.

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24. (Stock) Warrants
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
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.


25. Account Monitoring Order (UK and several other countries)
Terrorism and Terrorist Financing
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.
Solicits potential customers and issues the credit cards.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.


26. Credit Card Associations
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
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
Direct or indirect advisor on buying and selling futures or commodity options.
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.


27. Basel committee's 'Customer Due Diligence for Banks' when verifying a unit's compliance with KYC policies and procedures - the home country supervisors or auditors should do what?
Person who - for compensation - provides advice on securities and investments and manages client assets.
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
Review customer files and conduct random sampling of accounts.
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.


28. Wholesale Banking
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
Banking services between merchant banks and other financial institutions.
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
People who help move the billions of dollars drug traffickers earn around the world.


29. Examples of VSP's
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
Competent authorities should have powers of subpoena - search and seizure.


30. What is important about the US Money Laundering Control Act (MCLA)?
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.
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.
It was the first law in any country to make money laundering a crime.
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.


31. Arrest Warrant
Open and Closed system
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.
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.
Competent authorities should have powers of subpoena - search and seizure.


32. Basel's 'CDD for Banks' states that the decision to open an account for a PEP should be taken at...
a Sr Management level
Canada
Report suspicious transactions linked to terrorism.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.


33. Examples of White-collar crime
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.


34. What is a 'Trust'?
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.
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.
have in place compulsory currency reporting requirements.
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.


35. How are 'Predicate Crimes' sometimes identified?

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36. Common types of 'Derivatives'
Futures contracts - forwards - swaps or options.
Countering the Financing of Terrorism (Counter Terrorist Financing).
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
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.


37. FATF Recommendation 23
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
Money Laundering and Tax Evasion
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.
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.


38. How is 'Legal Risk' defined by the 2001 Basel Due Diligence Principles?
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
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.
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.


39. Nostro

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40. Who issues the Internationa Narcotics Control Strategy Report (INCSR) and how often?
A market is which securities are bought and sold outside of establisehd securities markets.
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
The US State Dept issues the report annually.


41. A 'panzi' scheme is named for whom?
A US Federal Court
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.
Impose AML requirements on alternative remittance systems.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.


42. Fraud
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
have in place compulsory currency reporting requirements.
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 ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.


43. FATF Sepcial Recommendation on Terrorist Financing -- SR Four
Report suspicious transactions linked to terrorism.
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.
Typical mass-market banking where individual customers use local branches of larger commercial banks.
Open and Closed system


44. Open System Stored Value Card
Person who - for compensation - provides advice on securities and investments and manages client assets.
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 prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.


45. What are included in the Wolfsberg AML Principles on Private Banking?
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
Money Laundering and Tax Evasion
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.


46. Variable Annuity
Reliable - independent source of documents - data or information.
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
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.
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.


47. 'Coucil of Europe Convention on Laundering - Search - Seizure and Confiscation of the Proceeds from Crime' is known for what?
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].
foreign correspondent banks
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.
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.


48. Options/Options Contract
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.
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
It was the first law in any country to make money laundering a crime.
Type of foreign bank that is incorporated in the host country but is considered to be owned by a foreign parent bank. It only needs to operarted under the host country's regulations.


49. (Credit card) Acquiring Bank
Report suspicious transactions linked to terrorism.
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.
Processes transactions for merchants who accept credit cards.
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.


50. How do 'Hedge Funds' operate?

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