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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 31
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
EurAsian Group
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.

2. 'Introducing Broker-Dealers in Commodities' (IB-C)

3. Operational risks in KYC context relate to...
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.

4. FATF's designated transactional threshold for Delaers is Precious metals and / or Precious Stones is _____.
Middle East and North Africa Financial Action Task Force
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
The opposing part of a transaction or trade.
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.

5. What is important about the US Money Laundering Control Act (MCLA)?
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
It was the first law in any country to make money laundering a crime.
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.

6. Why is 'refining' critical to a money launderer's efforts?
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.
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
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'
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.

7. FATF Recommendation 28
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
Competent authorities should have powers of subpoena - search and seizure.
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.
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.

8. What do boiler room salespeople typically do?

9. FATF Recommendation 8
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
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.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
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.

10. What is a 'Trust'?
Financial Action Task Force
Letters Rogatory
Penny Stocks
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.

11. Arrest Warrant
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.
Court order directing a law enforcement officer to seize and detain a particular person and require them to provide an answer to a compliant or otherqise appear in court.
It conducts investigations in support of a government's confiscation or seizure efforts.

12. What is the FCPA primarily known for?
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
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).
Countering the Financing of Terrorism (Counter Terrorist Financing).
Futures contracts - forwards - swaps or options.

13. FATF Recommendation 21
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.
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
Canada
EurAsian Group

14. Open System Stored Value Card
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
The International Monetary Fund (IMF) and the world bank conduct the joint program.
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.

15. What is the Federal Service for Financial Monitoring?
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
The FIU of Russia

16. Vital Service Providers (VSPs)
People who help move the billions of dollars drug traffickers earn around the world.
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
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.

17. What does an Extradition Treaty specify?
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
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
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.

18. What does theInternationa Narcotics Control Strategy Report (INCSR) entail?
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.
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.
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.

19. What is one of the cental stragetic tools required for effective action against money laundering?
Person who - for compensation - provides advice on securities and investments and manages client assets.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
Confiscation

20. A 'Cash Letter' can also be referred to as _____.
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).
Pouch activity.
Impose AML requirements on alternative remittance systems.
To reduce financial crime - including money laundering and terrorit financing.

21. FATF Recommendation 19
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
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.

22. FATF Recommendation 39
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
Countries should recognize money laundering as an extraditable offense.
Placement - Layering - Integration.

23. Guaranteed Introducing Broker

24. Who issues the Internationa Narcotics Control Strategy Report (INCSR) and how often?
The US State Dept issues the report annually.
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.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
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.

25. 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.

26. MENAFATF
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
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.
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.
Middle East and North Africa Financial Action Task Force

27. Counter Party
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
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
The opposing part of a transaction or trade.
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.

28. Commodity Pool Operator
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
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.
Countries should recognize money laundering as an extraditable offense.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.

29. Scheme
EurAsian Group
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.
Terrorism and Terrorist Financing
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.

30. FATF Recommendation 29
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
Court order directing a law enforcement officer to seize and detain a particular person and require them to provide an answer to a compliant or otherqise appear in court.

31. The Palemo Convention
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
Pouch activity.

32. 'Commission Rogatoire' known in English as?
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).
Letters Rogatory
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.
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.

33. What do boiler room salespeople typically sell?
As 'felonies' or 'all offenses in the criminal code'.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
Penny Stocks
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.

34. How is 'Legal Risk' defined by the 2001 Basel Due Diligence Principles?
As a financial institution service that is very vulnerable to money laundering.
A market is which securities are bought and sold outside of establisehd securities markets.
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.
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.

35. What is the significance of 'Non-Financial Trades and Businesses' in realtion to Money Laundering?
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.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
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.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).

36. A public perception that a bank is not able to manage its operational risk effectively can...
disrupt or adversely afftect the business of the bank.
Intergovernmental Action Group against Money Laundering in Africa
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.

37. Abusive Squeezes

38. FATF Recommendation 9
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.
To reduce financial crime - including money laundering and terrorit financing.
Person who - for compensation - provides advice on securities and investments and manages client assets.
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.

39. Wire Transfers
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
Take immediate steps to ratify and implement the UN instruments.
Countering the Financing of Terrorism (Counter Terrorist Financing).

40. What normal business practise makes 'Product Division' possible?
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
Foreign Corrupt Practices Act
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.

41. EAG
EurAsian Group
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
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.

42. Distribution Channels (Insurance Industry)
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.
Intergovernmental Action Group against Money Laundering in Africa
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.
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]

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

44. UK courts view on 'Suspicion'
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
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.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.

45. Dormant Account
Futures contracts - forwards - swaps or options.
An account that does not show activity other than the posting of interest or account maintenance fees.
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 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.

46. FATF Sepcial Recommendation on Terrorist Financing -- SR Three
Stored Value Cards - Mobile Payments - Internet Payments.
Freeze and confiscate terrorist assets.
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.
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.

47. What is meant by 'Know Your Customer's customer'?
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
Harmful or Preferrential Tax Regimes.
Placement - Layering - Integration.
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.

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

49. (Credit Card) Issuing Bank
Solicits potential customers and issues the credit cards.
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
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.
Banking services between merchant banks and other financial institutions.

50. FATF Recommendation 18
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.
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'.
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.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.