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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. What is the goal of the Egmont group?

2. What does a 'Commission Rogatoire' normally specify?
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.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
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.

3. 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.
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.
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.
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.

4. FATF Recommendation 11
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.
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.
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.
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.

5. Legal Arrangements (Insurance Industry)
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.
Harmful or Preferrential Tax Regimes.
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]
tipped off that they are being investigated.

6. FATF Sepcial Recommendation on Terrorist Financing -- SR Eight
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
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.
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.

7. What do boiler room salespeople typically sell?
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
Penny Stocks

8. Why do convertible bonds oftern have lower interest rates than non-convertible bonds?
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
They can accrue value as the price of the underlying stock rises.
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
Review customer files and conduct random sampling of accounts.

9. How is 'Legal Risk' defined by the 2001 Basel Due Diligence Principles?
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
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 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.
Letters Rogatory

10. GAFISUD
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
Financial Action Task Force on Money Laundering in South America
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.

11. Futures Commission Merchant (FCM)
Banking services between merchant banks and other financial institutions.
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.
Countering the Financing of Terrorism (Counter Terrorist Financing).
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.

12. What must a financial institution do if they have 'Exempt Accounts'?
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
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.
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.

13. A public perception that a bank is not able to manage its operational risk effectively can...
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
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.
disrupt or adversely afftect the business of the bank.

14. 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...
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.
Expatriates sending money back to their home country or by other individuals sending money abroad.
The opposing part of a transaction or trade.
no regulatory power or function

15. CFT
Intergovernmental Action Group against Money Laundering in Africa
Take immediate steps to ratify and implement the UN instruments.
Countering the Financing of Terrorism (Counter Terrorist Financing).
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.

16. FATF Recommendation 29
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.
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.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.

17. Commodity Trading Advisor
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.
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
Direct or indirect advisor on buying and selling futures or commodity options.
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.

18. Account Monitoring Order (UK and several other countries)
Financial Action Task Force on Money Laundering in South America
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization

19. What are included in the Wolfsberg AML Principles on Private Banking?
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)

20. FATF Recommendation 3
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.
Market participants intentionally restrict a security's liquidity. May lead to increased profits when the security's price rises due to the lack of 'supply'.
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.

21. Bust-out
no regulatory power or function
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.

22. Dormant Account
Terrorism and Terrorist Financing
As a financial institution service that is very vulnerable to money laundering.
An account that does not show activity other than the posting of interest or account maintenance fees.
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.

23. (Credit Card) Issuing Bank
The FIU of Russia
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.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
Solicits potential customers and issues the credit cards.

24. What is the FCPA primarily known for?
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).
Foreign Corrupt Practices Act
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.

25. When is a jurisdiction considered to be 'ring-fenced'?
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).
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.
disrupt or adversely afftect the business of the bank.

26. FATF Recommendation 1
disrupt or adversely afftect the business of the bank.
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
Penny Stocks

27. A notary can issue a Apostille but it must be in a country that signed The Hague Convention (1961) and it must ___________. If the notary doesn't understand - find another one.

28. FATF Recommendation 13
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
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.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.

29. Scheme
Absolutely NOT. If the decision is based purely on profile - then you are discriminating. you need to file such reports on the ACTIVITY especially if it differs from the 'normal and expected' as reflected in the customer profile.
A co-operative property seller agrees to sell home at a well-below market reported price - then accepts the difference 'under the table'. When launderer later sells house - he recognizes 'gain' and all funds appear legitimate as it sold at market.
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.
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.

30. Moneyval
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
A US Federal Court
No.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.

31. Downstream Correspondent Clearer
Competent authorities should have powers of subpoena - search and seizure.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
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.
The opposing part of a transaction or trade.

32. What does the 'SEC' (US Securities and Exchange Commission) do?
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.

33. Apostille

34. FATF Recommendation 39
Countries should recognize money laundering as an extraditable offense.
Impose AML requirements on alternative remittance systems.
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.
Penny Stocks

35. White-Collar crime

36. OCC Office of the Comptroller of the Currency
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.

37. FATF Recommendation 27
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
Financial Action Task Force
a chain-referral scheme.
Freeze and confiscate terrorist assets.

38. FATF Recommendation 14
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
Terrorism and Terrorist Financing
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.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.

39. Structuring is a common technique in jurisdictions that...
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
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.
have in place compulsory currency reporting requirements.

40. Retail Banking
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
Typical mass-market banking where individual customers use local branches of larger commercial 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.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.

41. 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
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
Harmful or Preferrential Tax Regimes.
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.
Expanding/Systemising the exchange of financial intelligence - improving expertise/capabilities of their personnel - fostering better communication by applying new technologies and sharing financial crimes investigations information.

42. What do boiler room salespeople typically do?

43. FATF Sepcial Recommendation on Terrorist Financing -- SR Nine
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
The world's largest private DB of stolen art.

44. FATF Recommendation 23
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
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.
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.
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

45. Example of use of an Apostille
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
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.
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.
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.

46. Penny Stocks
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
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.
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.
no regulatory power or function

47. Margin
Pouch activity.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
Typical mass-market banking where individual customers use local branches of larger commercial banks.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.

48. Money Mules
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.
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.

49. 'Kiting' via credit card
Financial Action Task Force on Money Laundering in South America
Typical mass-market banking where individual customers use local branches of larger commercial banks.
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.
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.

50. Behaviour detection