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. (Credit Card) Third-Party processor
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
Solicits potential customers and issues the credit cards.
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.
To reduce financial crime - including money laundering and terrorit financing.


2. How does the Egmont group help its members?
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
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.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)


3. How do 'Hedge Funds' operate?

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4. What criterion does the US need to enforce its 'Extraterritorial Reach'?

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5. FATF Recommendations examples of non-financial businesses and professions
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.


6. What is meant by 'Know Your Customer's customer'?
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
Type of foreign bank that is incorporated in the host country but is considered to be owned by a foreign parent bank. It only needs to operarted under the host country's regulations.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.


7. FATF
Financial Action Task Force
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 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.
Penny Stocks


8. Margin
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
Direct or indirect advisor on buying and selling futures or commodity options.
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.


9. What is a Financial Intelligence Unit?
disrupt or adversely afftect the business of the bank.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.


10. What is one of the Financial Service Authority's (UK) tasks?
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
To reduce financial crime - including money laundering and terrorit financing.
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.


11. MENAFATF
Middle East and North Africa Financial Action Task Force
Reliable - independent source of documents - data or information.
As 'felonies' or 'all offenses in the criminal code'.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.


12. Derivatives
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
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.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.


13. What does FIU do beyond what FIU does?

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14. What is the Wolfsberg group?
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.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.


15. Bust-out
Canada
Financial Action Task Force
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.


16. FATF Recommendation 4
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
Foreign Corrupt Practices Act
As a key tool in detecting suspicious or money laundering activity - it is important because correspondent accounts are often used as conduits to launder criminal proceeds in international settings.


17. 'Commission Rogatoire' known in English as?
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
Letters Rogatory
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
If provided for money laundering to be an internationally extraditable offense.


18. What are the two types of Stored Value Cards?
Open and Closed system
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
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 federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.


19. Market Manipulation
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.
Processes transactions for merchants who accept credit cards.
Typical mass-market banking where individual customers use local branches of larger commercial banks.
Countering the Financing of Terrorism (Counter Terrorist Financing).


20. How does 'Product Diversion' work?
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
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.
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.
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

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22. FATF Sepcial Recommendation on Terrorist Financing -- SR One
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
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.
Take immediate steps to ratify and implement the UN instruments.


23. Fraud
To provide a forum for FIU's (Financial Intelligence Unit) to improve support to their respective national AML progrmans and development protocols for the sharing of information.
Person who - for compensation - provides advice on securities and investments and manages client assets.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws


24. Cash Log

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25. What does the 'SEC' (US Securities and Exchange Commission) do?
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
Confiscation
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.


26. Nostro

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27. What are the three main functions of a 'Transfer Agent'?
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
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.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.


28. 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...
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.
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.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
no regulatory power or function


29. 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...
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.
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.
that appear to be linked
A US Federal Court


30. Legal Arrangements (Insurance Industry)
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]
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
Provide mutual legal assistance.
Take immediate steps to ratify and implement the UN instruments.


31. FATF Sepcial Recommendation on Terrorist Financing -- SR Four
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.
Report suspicious transactions linked to terrorism.
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
Freeze and confiscate terrorist assets.


32. FCPA (US)
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'
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
Foreign Corrupt Practices Act
Countries should recognize money laundering as an extraditable offense.


33. GIABA
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
Intergovernmental Action Group against Money Laundering in Africa
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.


34. 'Open-end Mutual Fund' (or Company)

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35. The 'Art Loss Register'

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36. FATF Recommendation 13
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
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.
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.


37. FATF Recommendation 28
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]
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.
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.
Competent authorities should have powers of subpoena - search and seizure.


38. Why is it imperative to have a strong Know Your Employee program?
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
An electronic quotation system that displays quotes of many securities traded over the counter.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
Processes transactions for merchants who accept credit cards.


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

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40. 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.

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41. In Emerging Money Laundering Risks - what 3 methods are identified as 'Funds Transfers'?
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
No.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
Stored Value Cards - Mobile Payments - Internet Payments.


42. Penny Stocks
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 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.
It conducts investigations in support of a government's confiscation or seizure efforts.
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.


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

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44. Mutual Fund
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.


45. (Credit Card) Issuing Bank
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
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).
Middle East and North Africa Financial Action Task Force
Solicits potential customers and issues the credit cards.


46. FATF Recommendation 14
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
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.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.


47. FATF Recommendation 12
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
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.
The International Monetary Fund (IMF) and the world bank conduct the joint program.
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.


48. A pyramid scheme is also called...
a chain-referral scheme.
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.
Person who - for compensation - provides advice on securities and investments and manages client assets.
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.


49. FATF Recommendation 19
Solicits potential customers and issues the credit cards.
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
Financial Action Task Force on Money Laundering in South America
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.


50. A 'Cash Letter' can also be referred to as _____.
Strengthen customer identification measures in iternational and domestic wire transfers.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
Pouch activity.
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.