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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 6
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.
bear the mark 'APOSTILLE'
Harmful or Preferrential Tax Regimes.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.

2. Cash Log

3. FATF Recommendation 24
Solicits potential customers and issues the credit cards.
A record that financial institutions must retain for each cash sale of bank checks - drafts - money orders - cashier's checks and traveller's checks between $3 -000 and $10 -000.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.

4. Convertible Preferred
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.
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.

5. FATF Recommendation 11
A market is which securities are bought and sold outside of establisehd securities markets.
Countering the Financing of Terrorism (Counter Terrorist Financing).
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.
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.

6. Automated Sale
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
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.
bear the mark 'APOSTILLE'

7. OCC Office of the Comptroller of the Currency
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
Countries should recognize money laundering as an extraditable offense.

8. What is the goal of the Egmont group?

9. The Palemo Convention
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
Confiscation
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.

10. FATF's designated transactional threshold for Delaers is Precious metals and / or Precious Stones is _____.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Intergovernmental Action Group against Money Laundering in Africa

11. What do boiler room salespeople typically sell?
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
Processes transactions for merchants who accept credit cards.
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.
Penny Stocks

12. FATF Recommendation 29
Review customer files and conduct random sampling of accounts.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
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.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.

13. FATF Recommendation 26
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
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.
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 establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.

14. 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.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
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.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.

15. FATF Recommendation 20
Penny Stocks
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
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.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.

16. Open System Stored Value Card
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
Expatriates sending money back to their home country or by other individuals sending money abroad.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
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.

17. Wholesale Banking
As a financial institution service that is very vulnerable to money laundering.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
Banking services between merchant banks and other financial institutions.
Letters Rogatory

18. Operational risks in KYC context relate to...
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.

19. Apostille

20. Vital Service Providers (VSPs)
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
People who help move the billions of dollars drug traffickers earn around the world.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.

21. Investment Adviser
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.
Person who - for compensation - provides advice on securities and investments and manages client assets.
They can accrue value as the price of the underlying stock rises.
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.

22. Penny Stocks
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.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
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.
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.

23. 'Kiting' via credit card
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
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.
Strengthen customer identification measures in iternational and domestic wire transfers.

24. Reverse Flip

25. Futures Commission Merchant (FCM)
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
Review customer files and conduct random sampling of accounts.
Solicits potential customers and issues the credit cards.

26. Where is the Art Loss Register found?
www.artloss.com
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
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.
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.

27. White-Collar crime

28. USA Patriot Act Section 312 'Offshore Bank'
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
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 detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
The UN Convention against Transnational Organized Crime [Adopted 12/2000].

29. Who appoints a 'Federal Receiver' (US)?
tipped off that they are being investigated.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
A US Federal Court
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.

30. FATF Recommendation 13
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
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.
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)

31. As considered by UN and OECD - these are jurisdictions that have no or low tax rates - and do not attract real business or foreign investment
Foreign Corrupt Practices Act
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
Harmful or Preferrential Tax Regimes.
Middle East and North Africa Financial Action Task Force

32. Why do convertible bonds oftern have lower interest rates than non-convertible bonds?
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.
They can accrue value as the price of the underlying stock rises.
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.

33. 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?
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
Review customer files and conduct random sampling of accounts.
A bank which uses the services of another bank - such as check clearing - wire transfers - etc. The bank providing the service is the 'Correspondent Bank'
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.

34. FATF Sepcial Recommendation on Terrorist Financing -- SR One
Take immediate steps to ratify and implement the UN instruments.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
Person who - for compensation - provides advice on securities and investments and manages client 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.

35. (Credit card) Acquiring Bank
Processes transactions for merchants who accept credit cards.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
As 'felonies' or 'all offenses in the criminal code'.
Issue and cancel securities certificates to reflect chagnes in ownership - act as an intermediary for the issuing company - and hanlde lost - stolen or destroyed certificates.

36. FATF Sepcial Recommendation on Terrorist Financing -- SR Two
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
Foreign Corrupt Practices Act
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.

37. What does an Extradition Treaty specify?
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
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
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]

38. What is the FCPA primarily known for?
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
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).
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.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.

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

40. 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.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
Competent authorities should have powers of subpoena - search and seizure.
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.

41. UK courts view on 'Suspicion'
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.
2% - 5% ($590B - $1.5T)
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.
tipped off that they are being investigated.

42. What was the target of UN Security Council Resolution 1267?
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
Banking services between merchant banks and other financial institutions.
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
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.

43. What is private investment company also known as?
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
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.
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.
Processes transactions for merchants who accept credit cards.

44. FATF Sepcial Recommendation on Terrorist Financing -- SR Seven
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Strengthen customer identification measures in iternational and domestic wire transfers.
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.

45. Pink Sheets
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
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.
2% - 5% ($590B - $1.5T)
An electronic quotation system that displays quotes of many securities traded over the counter.

46. Distribution Channels (Insurance Industry)
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
An electronic quotation system that displays quotes of many securities traded over the counter.
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]
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.

47. Commodity Trading Advisor
no regulatory power or function
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.
Direct or indirect advisor on buying and selling futures or commodity options.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.

48. What are some of the AML dangers of casino junkets?
A US Federal Court
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.
They pool investors' money and invest those funds in financial instruments in an effort to turn a profit. They typically issue securities in 'private offerings' that are usually not required to be registered with sa securities or financial regulator.
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.

49. What is the significance of 'Non-Financial Trades and Businesses' in realtion to Money Laundering?
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
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.

50. The Vienns Convention
To reduce financial crime - including money laundering and terrorit financing.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
The International Monetary Fund (IMF) and the world bank conduct the joint program.
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].