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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. Free Look Period
If provided for money laundering to be an internationally extraditable offense.
Middle East and North Africa Financial Action Task Force
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.

2. A pyramid scheme is also called...
that appear to be linked
a chain-referral scheme.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
Money Laundering and Tax Evasion

3. Why do convertible bonds oftern have lower interest rates than non-convertible bonds?
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
Futures contracts - forwards - swaps or options.
They can accrue value as the price of the underlying stock rises.

4. FATF Recommendation 29
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
As a financial institution service that is very vulnerable to money laundering.
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.

5. Credit Card Associations
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.
Penny Stocks
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.

6. What does FIU do beyond what FIU does?

7. 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.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
foreign correspondent banks
www.artloss.com

8. Why is understanding 'Product Diversion' important to the AML investigator?
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.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.

9. Bust-out
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
Foreign Corrupt Practices Act
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
Money Laundering and Tax Evasion

10. FATF Recommendation 31
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
Countering the Financing of Terrorism (Counter Terrorist Financing).
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.

11. Characteristics of an 'Open System Stored Value Card'
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
Typical mass-market banking where individual customers use local branches of larger commercial banks.
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).
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.

12. (Credit card) Acquiring Bank
Processes transactions for merchants who accept credit cards.
Placement - Layering - Integration.
If provided for money laundering to be an internationally extraditable offense.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.

13. What is one of the cental stragetic tools required for effective action against money laundering?
Letters Rogatory
An account that does not show activity other than the posting of interest or account maintenance fees.
Confiscation
Open and Closed system

14. In Emerging Money Laundering Risks - what 3 areas are associated with 'Contractual Transactions'?
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
If provided for money laundering to be an internationally extraditable offense.

15. According to FATF - financial transactions above a designated threshold may include situations where the transaction takes place in a single operation or in several operations...
tipped off that they are being investigated.
Countries should not allow shell banks. Financial institutions should not have correspondent banking relationships with shell banks or banks that allow shell banks to do business through their accounts.
that appear to be linked
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.

16. USA Patriot Act Section 312 'Offshore Bank'
Reliable - independent source of documents - data or information.
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.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
Impose AML requirements on alternative remittance systems.

17. FATF Recommendation 33
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.
Impose AML requirements on alternative remittance systems.
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.

18. Abusive Squeezes

19. The Joint Money Laundering Steering Group (UK) has published a series of AML Guidance Notes for different sectors of the financial community. But - As a group of trade associations - it has...
no regulatory power or function
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
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.
Financial Action Task Force

20. In Emerging Money Laundering Risks - what 3 methods are identified as 'Funds Transfers'?
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
Stored Value Cards - Mobile Payments - Internet Payments.
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.

21. Apostille

22. FATF Recommendation 35
Countries should not allow shell banks. Financial institutions should not have correspondent banking relationships with shell banks or banks that allow shell banks to do business through their accounts.
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.

23. Underwriting
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
Freeze and confiscate terrorist assets.
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.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.

24. Portfolio Manager
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.
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
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.
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.

25. The Palemo Convention
Money Laundering and Tax Evasion
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.
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 Transnational Organized Crime [Adopted 12/2000].

26. GIABA
Intergovernmental Action Group against Money Laundering in Africa
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.

27. Why does a launderer try to run transactions through a concentration account of a financial institution?
Banking services between merchant banks and other financial institutions.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.

28. 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.
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).
The sale of a stock that the investor does not own. To do so - a securities intermediary 'loans' the stock to the investor - which comes from the intermediary's own inventory - another client's margin account or another intermediary.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.

29. What is the Wolfsberg group?
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.
Banking services between merchant banks and other financial institutions.
Pouch activity.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.

30. What is the Serious Organised Crime Agency (SOCA)?
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
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 FIU of the UK

31. The IMF estimates that laundered funds compromise ______ of the world's GDP
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
An electronic quotation system that displays quotes of many securities traded over the counter.
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].
2% - 5% ($590B - $1.5T)

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

33. What is a 'NCCT'?
The FIU of Russia
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.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).

34. Many jurisdictions have legislation to ensure that suspects are not ____?
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.
tipped off that they are being investigated.
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.

35. FATF Sepcial Recommendation on Terrorist Financing -- SR Nine
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.

36. Why is 'Know Your Correspondent Bank' important?
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
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.
foreign correspondent banks
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.

37. Transparency International
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
Provide mutual legal assistance.
Foreign Corrupt Practices Act

38. FATF's designated transactional threshold for Delaers is Precious metals and / or Precious Stones is _____.
The opposing part of a transaction or trade.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.

39. UK courts view on 'Suspicion'
Money Laundering and Tax Evasion
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.
Letters Rogatory
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.

40. What do 'Hedge Funds' attempt to do?
Confiscation
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.
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.

41. Why is 'Know Your Customer's Customer' important?
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
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.
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.

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

43. Distribution Channels (Insurance Industry)
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]
Penny Stocks
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
Report suspicious transactions linked to terrorism.

44. What does an Extradition Treaty specify?
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
As a financial institution service that is very vulnerable to money laundering.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
no regulatory power or function

45. What does theInternationa Narcotics Control Strategy Report (INCSR) entail?
An account that does not show activity other than the posting of interest or account maintenance fees.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
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).

46. FATF Recommendation 21
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
An electronic quotation system that displays quotes of many securities traded over the counter.
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.

47. Pink Sheets
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.
An electronic quotation system that displays quotes of many securities traded over the counter.
It was the first law in any country to make money laundering a crime.

48. Corporate Bank

49. Cash Letter
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
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.

50. What are some of the AML dangers of casino junkets?
Money Laundering and Tax Evasion
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
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 take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.