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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. FATF Recommendation 35
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)

2. As considered by UN and OECD - these are jurisdictions that have no or low tax rates - and do not attract real business or foreign investment
Harmful or Preferrential Tax Regimes.
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.
Intergovernmental Action Group against Money Laundering in Africa
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.

3. Why does a launderer try to run transactions through a concentration account of a financial institution?
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
Funds transfers - Shell Corporations - Contractual Transactions.
no regulatory power or function

4. What does the 'SEC' (US Securities and Exchange Commission) do?
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
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.
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.
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.

5. FATF Recommendation 24
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
The FIU of Russia
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data

6. 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.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
disrupt or adversely afftect the business of the bank.
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.

7. (Credit card) Acquiring Bank
Processes transactions for merchants who accept credit cards.
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.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.

8. Foriegn Shell Banks are vehicles for ______ & ______?
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.
Expatriates sending money back to their home country or by other individuals sending money abroad.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
Money Laundering and Tax Evasion

9. Abusive Squeezes

10. What does FIU do beyond what FIU does?

11. What is the goal of FSAP?
Expatriates sending money back to their home country or by other individuals sending money abroad.
Pouch activity.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.

12. FATF Recommendation 8
Financial Action Task Force
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
Financial Action Task Force on Money Laundering in South America

13. GIABA
Intergovernmental Action Group against Money Laundering in Africa
foreign correspondent banks
Confiscation
Review customer files and conduct random sampling of accounts.

14. FATF's designated transactional threshold for Delaers is Precious metals and / or Precious Stones is _____.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
A market is which securities are bought and sold outside of establisehd securities markets.
bear the mark 'APOSTILLE'
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.

15. What can result from on institution's disregard for the Basel Due Diligence Principle?
2% - 5% ($590B - $1.5T)
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
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.
Take immediate steps to ratify and implement the UN instruments.

16. FATF Recommendation 23
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
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 enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
Harmful or Preferrential Tax Regimes.

17. Basel's 'CDD for Banks' states that the decision to open an account for a PEP should be taken at...
Canada
Urge investors to buy 'house stocks' - stocks that the firm buys and sells as a market maker or has in its inventory. Oftentimes - they are running a 'pump-and-dumo' scheme.
a Sr Management level
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.

18. CFT
tipped off that they are being investigated.
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
Countering the Financing of Terrorism (Counter Terrorist Financing).
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.

19. FATF Recommendation 5
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
Canada
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 NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.

20. Cash Log

21. (Credit Card) Third-Party processor
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
Letters Rogatory
foreign correspondent banks
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.

22. Legal Arrangements (Insurance Industry)
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.
Strengthen customer identification measures in iternational and domestic wire transfers.
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]
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.

23. 'Commission Rogatoire' known in English as?
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
Letters Rogatory
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).
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.

24. FATF Recommendation 36
Money Laundering and Tax Evasion
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
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.
Provide mutual legal assistance.

25. Guaranteed Introducing Broker

26. Cash Letter
EurAsian Group
www.artloss.com
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.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.

27. What normal business practise makes 'Product Division' possible?
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
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.
A US Federal Court

28. What is important about the US Money Laundering Control Act (MCLA)?
It was the first law in any country to make money laundering a crime.
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.

29. What the primary objectives of Offshore Group of Banking Supervisors?
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
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.
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.
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.

30. What do 'Hedge Funds' attempt to do?
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.

31. OTC markets Over-The-Counter
A market is which securities are bought and sold outside of establisehd securities markets.
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
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.
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.

32. Account Monitoring Order (UK and several other countries)
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
Open and Closed system
EurAsian Group

33. FATF Recommendation 28
Canada
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.
Competent authorities should have powers of subpoena - search and seizure.
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.

34. EAG
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
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.
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
EurAsian Group

35. Why is 'Know Your Customer's Customer' important?
Futures contracts - forwards - swaps or options.
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
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.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.

36. Penny Stocks
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 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.
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
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.

37. FATF Sepcial Recommendation on Terrorist Financing -- SR Eight
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
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.
have in place compulsory currency reporting requirements.

38. What is private investment company also known as?
The opposing part of a transaction or trade.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
While it is normally known as a Personal Investment Company (PIC) - in some jurisdictions - the international business company or exempt company is also the same.
Provide mutual legal assistance.

39. (Stock) Warrants
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
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.
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.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.

40. FATF Recommendation 25
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
Take immediate steps to ratify and implement the UN instruments.
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.

41. FATF's designated transactional threshold for Financial Insitutions is _____.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Processes transactions for merchants who accept credit cards.
The US State Dept issues the report annually.
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.

42. In general terms - EDD requires what of a financial institution?

43. FATF Recommendation 37
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
Expatriates sending money back to their home country or by other individuals sending money abroad.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
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.

44. When was the Offshore Group of Banking Supervisors established? What was the impetus behind its establishment?
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).

45. What is the FCPA primarily known for?
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).
Stored Value Cards - Mobile Payments - Internet Payments.
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
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. FATF Recommendation 34
2% - 5% ($590B - $1.5T)
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
Middle East and North Africa Financial Action Task Force
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.

47. What is the aim of Joint Money Laundering Steering Group? (UK)
Confiscation
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
An introducing broker-dealer with an exclusive written agreement with a Futures Commission Merchant (FCM) that obligates the FCM to assume responsibility for the introducing broker's performance.
Canada

48. Why do convertible bonds oftern have lower interest rates than non-convertible bonds?
Banking services between merchant banks and other financial institutions.
People who help move the billions of dollars drug traffickers earn around the world.
They can accrue value as the price of the underlying stock rises.
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'

49. MENAFATF
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
Middle East and North Africa Financial Action Task Force
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.

50. Nostro