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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. Investigative Log
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
The opposing part of a transaction or trade.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.

2. What is the aim of Joint Money Laundering Steering Group? (UK)
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
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.
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.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws

3. FATF Recommendation 28
The FIU of Russia
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
Competent authorities should have powers of subpoena - search and seizure.
The FIU of the UK

4. The Vienns Convention
Impose AML requirements on alternative remittance systems.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
Financial Action Task Force on Money Laundering in South America
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].

5. What do boiler room salespeople typically sell?
People who help move the billions of dollars drug traffickers earn around the world.
Penny Stocks
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.

6. FATF Recommendation 18
It conducts investigations in support of a government's confiscation or seizure efforts.
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.
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
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.

7. In Emerging Money Laundering Risks - what 3 areas are associated with 'Contractual Transactions'?
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
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.

8. FCPA (US)
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.
Strengthen customer identification measures in iternational and domestic wire transfers.
Foreign Corrupt Practices Act
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.

9. Why is it imperative to have a strong Know Your Employee program?
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.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
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.
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.

10. What does FIU do?
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
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]

11. How is 'Identity theft' often accomplished?
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
An electronic quotation system that displays quotes of many securities traded over the counter.
The opposing part of a transaction or trade.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.

12. When was the Offshore Group of Banking Supervisors established? What was the impetus behind its establishment?
a chain-referral scheme.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
Processes transactions for merchants who accept credit cards.
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.

13. UK courts view on 'Suspicion'
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.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
If provided for money laundering to be an internationally extraditable offense.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.

14. (Credit Card) Issuing Bank
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.
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.
Solicits potential customers and issues the credit cards.
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.

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.
The FIU of Russia
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)

16. What are the three main functions of a 'Transfer Agent'?
Processes transactions for merchants who accept credit cards.
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 contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.

17. Commodity Trading Advisor
Penny Stocks
Direct or indirect advisor on buying and selling futures or commodity options.
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
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

18. Corporate Bank

19. FATF Recommendation 8
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.
Confiscation
Canada
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.

20. Wholesale Banking
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.
Banking services between merchant banks and other financial institutions.
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.
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.

21. Vital Service Providers (VSPs)
The International Monetary Fund (IMF) and the world bank conduct the joint program.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
People who help move the billions of dollars drug traffickers earn around the world.

22. Example of use of an Apostille
Often co-branded by financial institution; may have VISA or MasterCard logos; can be reloadable; usually can access ATMs for withdrawls globally; non-customers can buy them.
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.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.

23. What are some of the AML dangers of casino junkets?
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.
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
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.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)

24. A pyramid scheme is also called...
a chain-referral scheme.
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 may rely upon intermediaries to perform certain CDD elements provided the intermediary is supervised and regulated. However - ultimate responsibility remains with the financial institution.
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).

25. Futures Commission Merchant (FCM)
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
Often co-branded by financial institution; may have VISA or MasterCard logos; can be reloadable; usually can access ATMs for withdrawls globally; non-customers can buy them.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.

26. What must a financial institution do if they have 'Exempt Accounts'?
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
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
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.
The opposing part of a transaction or trade.

27. Commodity Pool Operator
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.

28. FATF Recommendation 25
a chain-referral scheme.
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.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.

29. Why is 'refining' critical to a money launderer's efforts?
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
Banking services between merchant banks and other financial institutions.
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.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.

30. What do 'Hedge Funds' attempt to do?
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.
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.

31. Bust-out
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).
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
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.

32. Why do convertible bonds oftern have lower interest rates than non-convertible bonds?
a chain-referral scheme.
They can accrue value as the price of the underlying stock rises.
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.
www.artloss.com

33. What is the goal of the Egmont group?

34. 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...
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
have in place compulsory currency reporting requirements.
no regulatory power or function
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.

35. How do most governments view Private Banking?
Penny Stocks
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.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
As a financial institution service that is very vulnerable to money laundering.

36. FATF Recommendation 10
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
Processes transactions for merchants who accept credit cards.
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.

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

38. Who conducts the Financial Sector Assessment Program (FSAP)?
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.
The International Monetary Fund (IMF) and the world bank conduct the joint program.
A degree of satisfaction not necessarily amounting to belief but extending beyond specualtionas to whether an event has occured or not. Though suspicion requires a lesser factual basis than a belief - it must be built upon some foundation.
tipped off that they are being investigated.

39. (Stock) Warrants
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
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.
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.
Take immediate steps to ratify and implement the UN instruments.

40. US law prohibhits Foriegn Shell Banks from ____?
They can accrue value as the price of the underlying stock rises.
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
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).
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)

41. FATF Recommendation 32
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
To reduce financial crime - including money laundering and terrorit financing.
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.

42. What is important about the US Money Laundering Control Act (MCLA)?
It was the first law in any country to make money laundering a crime.
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
Funds transfers - Shell Corporations - Contractual Transactions.
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.

43. What is a 'NCCT'?
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
Harmful or Preferrential Tax Regimes.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.

44. FATF Recommendation 1
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
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.
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.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.

45. FATF Sepcial Recommendation on Terrorist Financing -- SR Four
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 International Monetary Fund (IMF) and the world bank conduct the joint program.
Report suspicious transactions linked to terrorism.
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

46. Agent (Insurance Industry)
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 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
Futures contracts - forwards - swaps or options.

47. CFT
The US State Dept issues the report annually.
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).
Countering the Financing of Terrorism (Counter Terrorist Financing).
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.

48. FATF Recommendation 13
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
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.
To reduce financial crime - including money laundering and terrorit financing.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.

49. FATF Recommendation 29
Confiscation
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.

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