Test your basic knowledge |

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?
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.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
Reliable - independent source of documents - data or information.
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).

2. FATF Sepcial Recommendation on Terrorist Financing -- SR One
An electronic quotation system that displays quotes of many securities traded over the counter.
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.
Take immediate steps to ratify and implement the UN instruments.
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.

3. FATF Sepcial Recommendation on Terrorist Financing -- SR Nine
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.
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.
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.

4. What is the aim of Joint Money Laundering Steering Group? (UK)
EurAsian Group
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.

5. Credit Card Associations
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
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).
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.

6. FCPA (US)
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
Harmful or Preferrential Tax Regimes.
Refers to where the agent is acting under a contractual arrangement with the insurer to carry out its CDD functions (i.e. the agent is regarded as synonymous with the insurer) [FATF Risk-Based approach - Guidance for the Life Insurance Sector - Oct 0
Foreign Corrupt Practices Act

7. FATF Recommendation 13
Take immediate steps to ratify and implement the UN instruments.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
Financial Action Task Force on Money Laundering in South America
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.

8. UK courts view on 'Suspicion'
Penny Stocks
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.
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]
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.

9. Moneyval
Freeze and confiscate terrorist assets.
Direct money of Criminal A is sent to foreign bank account of company B. Investment company C is formed as A's country. A is appointed as director of C. C borrows money from B and buys building which is rented to 3rd parties. with rent - C pays off B
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism

10. May a shell bank maintain a correspondent account with a US bank?
No.
Refers to where the agent is acting under a contractual arrangement with the insurer to carry out its CDD functions (i.e. the agent is regarded as synonymous with the insurer) [FATF Risk-Based approach - Guidance for the Life Insurance Sector - Oct 0
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.
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.

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).
The world's largest private DB of stolen art.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
EurAsian Group

12. What must a financial institution do if they have 'Exempt Accounts'?
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
The International Monetary Fund (IMF) and the world bank conduct the joint program.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.

13. The Vienns Convention
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
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.
Countries should recognize money laundering as an extraditable offense.

14. When is a jurisdiction considered to be 'ring-fenced'?
have in place compulsory currency reporting requirements.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.

15. What do boiler room salespeople typically do?

16. A pyramid scheme is also called...
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.
a chain-referral scheme.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.

17. Structuring is a common technique in jurisdictions that...
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
Money Laundering and Tax Evasion
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
have in place compulsory currency reporting requirements.

18. White-Collar crime

19. Investigative Log
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 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.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.

20. Scheme
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.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).

21. Mutual Fund
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.

22. Variable Annuity
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
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.
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'.
No.

23. What can result from on institution's disregard for the Basel Due Diligence Principle?
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 contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
Foreign Corrupt Practices Act

24. The 'Art Loss Register'

25. Example of use of an Apostille
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
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.
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)

26. (Stock) Warrants
Money Laundering and Tax Evasion
No.
Solicits potential customers and issues the credit cards.
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.

27. What are some of the AML dangers of casino junkets?
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
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.
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.

28. Vital Service Providers (VSPs)
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
People who help move the billions of dollars drug traffickers earn around the world.
a chain-referral scheme.

29. A public perception that a bank is not able to manage its operational risk effectively can...
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
Impose AML requirements on alternative remittance systems.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
disrupt or adversely afftect the business of the bank.

30. Dormant Account
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.
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.
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.
An account that does not show activity other than the posting of interest or account maintenance fees.

31. Express Trust
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
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.
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.

32. Margin
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
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.
that appear to be linked

33. What does the 'SEC' (US Securities and Exchange Commission) do?
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.
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
If provided for money laundering to be an internationally extraditable offense.

34. Commodity
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
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.
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
Terrorism and Terrorist Financing

35. 'Kiting' via credit card
As a financial institution service that is very vulnerable to money laundering.
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
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'.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)

36. Why is understanding 'Product Diversion' important to the AML investigator?
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
Report suspicious transactions linked to terrorism.
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.

37. What was the target of UN Security Council Resolution 1267?
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.

38. A 'Cash Letter' can also be referred to as _____.
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
Pouch activity.

39. Affidavit
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
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.
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.

40. Why is a 'money order' attractive to a money launderer?
Countries should recognize money laundering as an extraditable offense.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
Foreign Corrupt Practices Act

41. How does the Egmont group help its members?
Foreign Corrupt Practices Act
The opposing part of a transaction or trade.
have in place compulsory currency reporting requirements.
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.

42. Futures Commission Merchant (FCM)
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.
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
It was the first law in any country to make money laundering a crime.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.

43. FATF's designated transactional threshold for Casinos (including Internet Casinos) is _____.
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Penny Stocks
Countries should recognize money laundering as an extraditable offense.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.

44. EAG
Terrorism and Terrorist Financing
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
EurAsian Group

45. FATF Sepcial Recommendation on Terrorist Financing -- SR Six
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.
If provided for money laundering to be an internationally extraditable offense.
Impose AML requirements on alternative remittance systems.
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.

46. Portfolio Manager
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
a chain-referral scheme.
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.
Expatriates sending money back to their home country or by other individuals sending money abroad.

47. What is one of the cental stragetic tools required for effective action against money laundering?
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
Confiscation
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another 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.

48. Many jurisdictions have legislation to ensure that suspects are not ____?
tipped off that they are being investigated.
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'.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
Reliable - independent source of documents - data or information.

49. What is the Wolfsberg group?
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
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).
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.
Processes transactions for merchants who accept credit cards.

50. FATF Sepcial Recommendation on Terrorist Financing -- SR Three
Freeze and confiscate terrorist assets.
Confiscation
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
Futures contracts - forwards - swaps or options.