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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. White-Collar crime

2. Under the US Bank Secrecy Act - SAR filings are confidential and the institutions employees cannot ____?

3. FATF
People who help move the billions of dollars drug traffickers earn around the world.
Financial Action Task Force
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
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.

4. Examples of VSP's
Countries should recognize money laundering as an extraditable offense.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
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
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

5. Investment Adviser
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
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.
Person who - for compensation - provides advice on securities and investments and manages client assets.
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.

6. FATF Recommendation 17
Harmful or Preferrential Tax Regimes.
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.
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
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

7. Convertible Bond
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
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 UN Convention against Transnational Organized Crime [Adopted 12/2000].
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).

8. What normal business practise makes 'Product Division' possible?
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
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.
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
EurAsian Group

9. The IMF estimates that laundered funds compromise ______ of the world's GDP
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
2% - 5% ($590B - $1.5T)
tipped off that they are being investigated.

10. Three stages of money laundering
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.
Placement - Layering - Integration.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
Countering the Financing of Terrorism (Counter Terrorist Financing).

11. What is the Serious Organised Crime Agency (SOCA)?
The FIU of the UK
It was the first law in any country to make money laundering a crime.
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.

12. Counter Party
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
The opposing part of a transaction or trade.
Take immediate steps to ratify and implement the UN instruments.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.

13. FATF Recommendation 22

14. 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.
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.
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 instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.

15. Account Monitoring Order (UK and several other countries)
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
Expatriates sending money back to their home country or by other individuals sending money abroad.
Banking services between merchant banks and other financial institutions.

16. Operational risks in KYC context relate to...
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.
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
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.

17. Who are the parties involved in a trust?
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
Open and Closed system
Harmful or Preferrential Tax Regimes.
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.

18. Why is 'Know Your Correspondent Bank' important?
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
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.
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.
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.

19. What does an Extradition Treaty specify?
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
The possibility that lawsuits adverse judgements or contracts that turn out to be unenforceable can disrupt or adversely affect the operatinos or condition of a financial siutation.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
Middle East and North Africa Financial Action Task Force

20. What is private investment company also known as?
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.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
2% - 5% ($590B - $1.5T)
The FIU of Russia

21. Why is it imperative to have a strong Know Your Employee program?
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.
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.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.

22. What is a 'NCCT'?
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.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
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.
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.

23. FATF Recommendation 32
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.
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
www.artloss.com
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.

24. Arrest Warrant
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.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
A fund setup by an investment trust that issues a fixed number of shares to its investors. As such - the market price of the shares fluctuates - often selling at a premium or discount to the fund's net asset value (NAV).
tipped off that they are being investigated.

25. 'Commission Rogatoire' known in English as?
Letters Rogatory
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.
No.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.

26. FATF Recommendation 3
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.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
Confiscation
Impose AML requirements on alternative remittance systems.

27. FATF Recommendation 2
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
Countering the Financing of Terrorism (Counter Terrorist Financing).
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.

28. FATF Recommendation 25
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
Harmful or Preferrential Tax Regimes.
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.

29. 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.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
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.

30. Transparency International
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
Freeze and confiscate terrorist assets.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.

31. FATF Sepcial Recommendation on Terrorist Financing -- SR Two
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.
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
Placement - Layering - Integration.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.

32. Example of use of an Apostille
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.
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.
Placement - Layering - Integration.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws

33. CFT
The FIU of Russia
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
www.artloss.com
Countering the Financing of Terrorism (Counter Terrorist Financing).

34. FATF Recommendation 21
Processes transactions for merchants who accept credit cards.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.

35. What does theInternationa Narcotics Control Strategy Report (INCSR) entail?
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
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.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.

36. Variable Annuity
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.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
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.

37. Penny Stocks
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].
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.

38. Basel's 'CDD for Banks' states that the decision to open an account for a PEP should be taken at...
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
a Sr Management level
The world's largest private DB of stolen art.

39. Why do companies export their goods at prices far below those in their home country?
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
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.

40. Why is a 'money order' attractive to a money launderer?
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.
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.

41. FATF's designated transactional threshold for Delaers is Precious metals and / or Precious Stones is _____.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.

42. 'Kiting' via credit card
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
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).
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.

43. What is the aim of Joint Money Laundering Steering Group? (UK)
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.
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.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.

44. Cash Letter
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
Provide mutual legal assistance.
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.

45. GIABA
Intergovernmental Action Group against Money Laundering in Africa
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
Banking services between merchant banks and other financial institutions.
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.

46. Retail Banking
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.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
Typical mass-market banking where individual customers use local branches of larger commercial banks.
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.

47. Why is 'refining' critical to a money launderer's efforts?
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.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
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.

48. FATF Recommendation 4
Direct or indirect advisor on buying and selling futures or commodity options.
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.
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.

49. FATF Recommendation 38
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.
It was the first law in any country to make money laundering a crime.
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
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.

50. FATF Recommendation 20
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.
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.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
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.