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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 37
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.

2. 'Loan Back' method. Give example of how it works.

3. FATF Sepcial Recommendation on Terrorist Financing -- SR Nine
Placement - Layering - Integration.
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.
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.

4. What is a Private Investment company (PIC)?
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.
foreign correspondent banks
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.

5. Boiler Room
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.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
have in place compulsory currency reporting requirements.
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.

6. What does the principal US money laundering law look for before implementing its 'Extraterritorial Reach'?
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
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
Middle East and North Africa Financial Action Task Force

7. A public perception that a bank is not able to manage its operational risk effectively can...
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.
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.
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.
disrupt or adversely afftect the business of the bank.

8. OTC markets Over-The-Counter
A market is which securities are bought and sold outside of establisehd securities markets.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
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.

9. FCPA (US)
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.
Foreign Corrupt Practices Act
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
Funds transfers - Shell Corporations - Contractual Transactions.

10. (Credit Card) Third-Party processor
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]
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.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.

11. Abusive Squeezes

12. Basel's 'CDD for Banks' states that the decision to open an account for a PEP should be taken at...
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
EurAsian Group
Placement - Layering - Integration.
a Sr Management level

13. When is a jurisdiction considered to be 'ring-fenced'?
To reduce financial crime - including money laundering and terrorit financing.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.

14. EAG
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
EurAsian Group
As 'felonies' or 'all offenses in the criminal code'.

15. Respondent Bank

16. FATF Recommendation 13
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
As a key tool in detecting suspicious or money laundering activity - it is important because correspondent accounts are often used as conduits to launder criminal proceeds in international settings.

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

18. FATF Recommendation 27
Penny Stocks
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
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.

19. What is the aim of Joint Money Laundering Steering Group? (UK)
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.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
It was the first law in any country to make money laundering a crime.
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.

20. What is a 'Trust'?
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.
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
a chain-referral scheme.
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.

21. Commodity Pool Operator
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.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.

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

23. What is a Financial Intelligence Unit?
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.

24. Short Sale

25. What do 'Hedge Funds' attempt to do?
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).
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.

26. 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.
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.
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
Review customer files and conduct random sampling of accounts.

27. Dematerialization of Securities

28. Convertible Bond
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
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.
The US State Dept issues the report annually.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.

29. FATF Recommendation 38
disrupt or adversely afftect the business of the bank.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
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.
Canada

30. A pyramid scheme is also called...
a chain-referral scheme.
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.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
Freeze and confiscate terrorist assets.

31. FATF Recommendation 24
Placement - Layering - Integration.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
A market is which securities are bought and sold outside of establisehd securities markets.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.

32. FATF Recommendation 30
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)

33. FATF Recommendation 32
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.
foreign correspondent banks
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.

34. Who conducts the Financial Sector Assessment Program (FSAP)?
Reliable - independent source of documents - data or information.
Account established by a domestic banking institution to receive deposits from - make payments on behalf of - or handle other financial transactions for a foreign financial institution - usually in the foreign financial institutions's cureency.
The International Monetary Fund (IMF) and the world bank conduct the joint program.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.

35. UK courts view on 'Suspicion'
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 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.
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
It was the first law in any country to make money laundering a crime.

36. Apostille

37. FATF Recommendation 6
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
tipped off that they are being investigated.
Harmful or Preferrential Tax Regimes.
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.

38. What do boiler room salespeople typically sell?
An account that does not show activity other than the posting of interest or account maintenance fees.
Provide mutual legal assistance.
Penny Stocks
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.

39. Money Mules
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
A person who tranfers stolen money (or merchandise) from one country to another - often as a result of online scams. Transfers - can be done electronically - via mail or courier service or in person.
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.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.

40. Three stages of money laundering
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).
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
Placement - Layering - Integration.
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.

41. US law prohibhits Foriegn Shell Banks from ____?
A person who tranfers stolen money (or merchandise) from one country to another - often as a result of online scams. Transfers - can be done electronically - via mail or courier service or in person.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.

42. Characteristics of an 'Open System Stored Value Card'
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
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.
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.

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

44. How do most governments view Private Banking?
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
As a financial institution service that is very vulnerable to money laundering.
www.artloss.com

45. Mutual Fund
Report suspicious transactions linked to terrorism.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
bear the mark 'APOSTILLE'

46. Why is 'refining' critical to a money launderer's efforts?
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.

47. Operational risks in KYC context relate to...
Foreign Corrupt Practices Act
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.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.

48. What the primary objectives of Offshore Group of Banking Supervisors?
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.
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.
Funds transfers - Shell Corporations - Contractual Transactions.

49. FATF Recommendation 28
Competent authorities should have powers of subpoena - search and seizure.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
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.
The US State Dept issues the report annually.

50. Automated Sale
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.
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.
Intergovernmental Action Group against Money Laundering in Africa
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.