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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 primary use of a 'Mutual Legal Assistance Treaty'?
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
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 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.
Penny Stocks

2. MENAFATF
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.
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.
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.
Middle East and North Africa Financial Action Task Force

3. Why is it imperative to have a strong Know Your Employee program?
Impose AML requirements on alternative remittance systems.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.

4. OTC markets Over-The-Counter
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
A market is which securities are bought and sold outside of establisehd securities markets.

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

6. Variable Annuity
As 'felonies' or 'all offenses in the criminal code'.
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 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.
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.

7. Commodity
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
Placement - Layering - Integration.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.

8. 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.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data

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

10. FATF Recommendation 28
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.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
Competent authorities should have powers of subpoena - search and seizure.

11. How do 'Hedge Funds' operate?

12. Fraud
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
Strengthen customer identification measures in iternational and domestic wire transfers.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
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.

13. What does FIU do?
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
Refers to where the agent is acting under a contractual arrangement with the insurer to carry out its CDD functions (i.e. the agent is regarded as synonymous with the insurer) [FATF Risk-Based approach - Guidance for the Life Insurance Sector - Oct 0
Processes transactions for merchants who accept credit cards.

14. Foriegn Shell Banks are vehicles for ______ & ______?
Money Laundering and Tax Evasion
foreign correspondent banks
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.
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.

15. FATF Recommendation 23
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
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.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.

16. FATF Recommendation 4
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.
They can accrue value as the price of the underlying stock rises.
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.

17. FATF Recommendation 8
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
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'
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.

18. Investigative Log
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.
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.
The sale of a stock that the investor does not own. To do so - a securities intermediary 'loans' the stock to the investor - which comes from the intermediary's own inventory - another client's margin account or another intermediary.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.

19. How is 'Legal Risk' defined by the 2001 Basel Due Diligence Principles?
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.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
A US Federal Court

20. In general terms - EDD requires what of a financial institution?

21. 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.

22. Examples of VSP's
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.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
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.
disrupt or adversely afftect the business of the bank.

23. 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.
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.
a chain-referral scheme.
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.

24. Three stages of money laundering
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
The US State Dept issues the report annually.
Placement - Layering - Integration.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.

25. What were recently identified as Emerging Money Laundering risks?
Funds transfers - Shell Corporations - Contractual Transactions.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
Banking services between merchant banks and other financial institutions.

26. FATF Recommendation 36
Placement - Layering - Integration.
Provide mutual legal assistance.
Direct money of Criminal A is sent to foreign bank account of company B. Investment company C is formed as A's country. A is appointed as director of C. C borrows money from B and buys building which is rented to 3rd parties. with rent - C pays off B
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.

27. FATF Sepcial Recommendation on Terrorist Financing -- SR Two
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.

28. GAFISUD
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.
Financial Action Task Force on Money Laundering in South America
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.
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.

29. Agent (Insurance Industry)
Refers to where the agent is acting under a contractual arrangement with the insurer to carry out its CDD functions (i.e. the agent is regarded as synonymous with the insurer) [FATF Risk-Based approach - Guidance for the Life Insurance Sector - Oct 0
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.
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.
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.

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

31. Pink Sheets
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
An electronic quotation system that displays quotes of many securities traded over the counter.
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 apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.

32. Abusive Squeezes

33. A pyramid scheme is also called...
Strengthen customer identification measures in iternational and domestic wire transfers.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
a chain-referral scheme.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.

34. What is one of the Financial Service Authority's (UK) tasks?
It conducts investigations in support of a government's confiscation or seizure efforts.
tipped off that they are being investigated.
To reduce financial crime - including money laundering and terrorit financing.
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.

35. FATF Recommendation 40
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
foreign correspondent banks
Confiscation
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.

36. Short Sale

37. Transparency International
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
Stored Value Cards - Mobile Payments - Internet Payments.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
Direct or indirect advisor on buying and selling futures or commodity options.

38. Distribution Channels (Insurance Industry)
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.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
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]
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.

39. How does the Egmont group help its members?
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.
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.

40. 'Closed-end Mutual Fund' (Or Comany)

41. Basel's 'CDD for Banks' states that the decision to open an account for a PEP should be taken at...
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.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
The FIU of the UK
a Sr Management level

42. FATF Recommendation 5
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
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.
Expatriates sending money back to their home country or by other individuals sending money abroad.
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.

43. FATF Recommendation 35
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.
Pouch activity.
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
Typical mass-market banking where individual customers use local branches of larger commercial banks.

44. (Stock) Warrants
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
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.
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.
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.

45. Moneyval
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.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism

46. What was the target of UN Security Council Resolution 1373?
bear the mark 'APOSTILLE'
Terrorism and Terrorist Financing
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.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.

47. What is the significance of 'Non-Financial Trades and Businesses' in realtion to Money Laundering?
Review customer files and conduct random sampling of accounts.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
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.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.

48. White-Collar crime

49. What is private investment company also known as?
As a financial institution service that is very vulnerable to money laundering.
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 US Federal Court
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.

50. FATF Recommendation 37
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
If provided for money laundering to be an internationally extraditable offense.
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.