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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. What were recently identified as Emerging Money Laundering risks?
Funds transfers - Shell Corporations - Contractual Transactions.
Impose AML requirements on alternative remittance systems.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.

2. 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.
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.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.

3. Boiler Room
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.
Review customer files and conduct random sampling of accounts.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
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.

4. 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.
If provided for money laundering to be an internationally extraditable offense.
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.
People who help move the billions of dollars drug traffickers earn around the world.

5. Dormant Account
An account that does not show activity other than the posting of interest or account maintenance fees.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
Review customer files and conduct random sampling of accounts.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.

6. Examples of White-collar crime
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Combines funds from various members and users them to trade in futures or options contracts.
Provide mutual legal assistance.
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.

7. FATF Recommendation 9
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.
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
To reduce financial crime - including money laundering and terrorit financing.
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.

8. What does theInternationa Narcotics Control Strategy Report (INCSR) entail?
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.
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.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
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.

9. Transparency International
The world's largest private DB of stolen art.
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.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
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

10. (Stock) Warrants
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
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.
Harmful or Preferrential Tax Regimes.
that appear to be linked

11. What is the significance of 'Non-Financial Trades and Businesses' in realtion to Money Laundering?
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
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 arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
Middle East and North Africa Financial Action Task Force

12. What is the Federal Service for Financial Monitoring?
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
Strengthen customer identification measures in iternational and domestic wire transfers.
The FIU of Russia

13. Underwriting
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 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 contractual arrangement whereby the trustee manages the property for the benefit of the beneficiary in accordance with the contractual terms set by the grantor.
www.artloss.com

14. Commodity
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
Letters Rogatory

15. Many jurisdictions have legislation to ensure that suspects are not ____?
tipped off that they are being investigated.
Expatriates sending money back to their home country or by other individuals sending money abroad.
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
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.

16. EAG
EurAsian Group
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
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.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.

17. Affidavit
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.
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.
tipped off that they are being investigated.
Solicits potential customers and issues the credit cards.

18. How are 'Predicate Crimes' sometimes identified?

19. What is the goal of the Egmont group?

20. May a shell bank maintain a correspondent account with a US bank?
No.
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.
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
Pouch activity.

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

22. Apostille

23. (Credit Card) Third-Party processor
bear the mark 'APOSTILLE'
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.

24. Foriegn Shell Banks are vehicles for ______ & ______?
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.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
Money Laundering and Tax Evasion
Financial Action Task Force

25. Retail Banking
Typical mass-market banking where individual customers use local branches of larger commercial banks.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
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.
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.

26. 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...
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
bear the mark 'APOSTILLE'
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.
foreign correspondent banks

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

28. What are included in the Wolfsberg AML Principles on Private Banking?
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
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.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.

29. FATF Recommendation 31
Report suspicious transactions linked to terrorism.
Financial Action Task Force on Money Laundering in South America
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
disrupt or adversely afftect the business of the bank.

30. Arrest Warrant
They can accrue value as the price of the underlying stock rises.
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.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
A market is which securities are bought and sold outside of establisehd securities markets.

31. What is the primary use of a 'Mutual Legal Assistance Treaty'?
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
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.
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.
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.

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

33. Basel's 'CDD for Banks' states that the decision to open an account for a PEP should be taken at...
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
An electronic quotation system that displays quotes of many securities traded over the counter.
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.
a Sr Management level

34. Respondent Bank

35. Who are the parties involved in a trust?
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
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.

36. 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.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.

37. (Credit card) Acquiring Bank
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].
Processes transactions for merchants who accept credit cards.
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.
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.

38. Cash Log

39. The Vienns Convention
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
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 Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.

40. 'Competent Authorities' refers to _____.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.

41. GAFISUD
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
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.
Financial Action Task Force on Money Laundering in South America
To reduce financial crime - including money laundering and terrorit financing.

42. What does a 'Commission Rogatoire' normally specify?
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
Solicits potential customers and issues the credit cards.
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.
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data

43. In Emerging Money Laundering Risks - what 3 areas are associated with 'Contractual Transactions'?
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.
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.
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.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.

44. Derivatives
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.
An account that does not show activity other than the posting of interest or account maintenance fees.
Take immediate steps to ratify and implement the UN instruments.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.

45. What criterion does the US need to enforce its 'Extraterritorial Reach'?

46. FATF Recommendation 24
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.

47. 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?
Review customer files and conduct random sampling of accounts.
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]
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.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.

48. Pink Sheets
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
An electronic quotation system that displays quotes of many securities traded over the counter.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.

49. FATF Recommendation 8
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 should pay to any threats from new or developing technologies - especially with non f2f relationships.
Countering the Financing of Terrorism (Counter Terrorist Financing).
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.

50. How does the Egmont group help its members?
Typical mass-market banking where individual customers use local branches of larger commercial banks.
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.
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]
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.