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
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
Terrorism and Terrorist Financing


2. How does the Egmont group help its members?
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
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 merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.


3. The IMF estimates that laundered funds compromise ______ of the world's GDP
www.artloss.com
2% - 5% ($590B - $1.5T)
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.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.


4. FATF Recommendation 17
Processes transactions for merchants who accept credit cards.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
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.
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.


5. Why is 'refining' critical to a money launderer's efforts?
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
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]
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.


6. FATF Recommendation 22

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7. What does FIU do?
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
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.
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.


8. Operational risks in KYC context relate to...
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
that appear to be linked
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


9. Options/Options Contract
The right - but not the obligation - to buy or sell a set amount of something - such as a share or commodity - at a set price after a set expiration date.
It was the first law in any country to make money laundering a crime.
Open and Closed system
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.


10. The 'Art Loss Register'

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11. Account Monitoring Order (UK and several other countries)
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.


12. Why is 'Know Your Customer's Customer' important?
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'
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
Money Laundering and Tax Evasion
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.


13. Convertible Preferred
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
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.
As 'felonies' or 'all offenses in the criminal code'.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.


14. FATF Recommendation 36
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.
2% - 5% ($590B - $1.5T)
Provide mutual legal assistance.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.


15. FATF Recommendation 3
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
A contractual arrangement whereby the trustee manages the property for the benefit of the beneficiary in accordance with the contractual terms set by the grantor.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.


16. Cash Letter
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.
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.


17. What was the target of UN Security Council Resolution 1373?
Terrorism and Terrorist Financing
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.


18. FATF Recommendation 13
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
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.
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.


19. The USA Patriot Act enacted a number of statutory provisions that bear directly on the procedures US financial institutions must follow in connection with their...
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.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
foreign correspondent banks
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.


20. CFT
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
Countering the Financing of Terrorism (Counter Terrorist Financing).
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.


21. Apostille

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22. Examples of VSP's
An electronic quotation system that displays quotes of many securities traded over the counter.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
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.


23. OTC markets Over-The-Counter
A market is which securities are bought and sold outside of establisehd securities markets.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
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


24. What is a 'Trust'?
A contractual arrangement whereby the trustee manages the property for the benefit of the beneficiary in accordance with the contractual terms set by the grantor.
The International Monetary Fund (IMF) and the world bank conduct the joint program.
Terrorism and Terrorist Financing
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.


25. What is the Federal Service for Financial Monitoring?
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.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
The FIU of Russia
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.


26. GAFISUD
Financial Action Task Force on Money Laundering in South America
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.
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.
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.


27. White-Collar crime

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28. A public perception that a bank is not able to manage its operational risk effectively can...
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
No.
disrupt or adversely afftect the business of the bank.
Futures contracts - forwards - swaps or options.


29. FATF Recommendation 29
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
Passed in 1977 - the US law is primarily known for its anti-bribery provisions (it also applies to foreign companies with stocks covered by the Securities and Exchange Act of 1934).
foreign correspondent banks


30. FATF Recommendation 39
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
Countries should recognize money laundering as an extraditable offense.
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.
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).


31. What does Financial Sector AssessmentProgram (FSAP) do?
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.
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.
The FIU of the UK
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.


32. What is a 'NCCT'?
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.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
An account that does not show activity other than the posting of interest or account maintenance fees.
The opposing part of a transaction or trade.


33. (Credit card) Acquiring Bank
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
bear the mark 'APOSTILLE'
Processes transactions for merchants who accept credit cards.


34. What are the three main functions of a 'Transfer Agent'?
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.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
The right - but not the obligation - to buy or sell a set amount of something - such as a share or commodity - at a set price after a set expiration date.
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.


35. Variable Annuity
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'
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.
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.


36. How are 'Predicate Crimes' sometimes identified?

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

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38. Retail Banking
Typical mass-market banking where individual customers use local branches of larger commercial banks.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
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.


39. Why is understanding 'Product Diversion' important to the AML investigator?
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.
Their financial institution may - wittingly or unwittingly - handle the proceeds of this crime while believing it is serving a legitimate client with major account balances.
The FIU of Russia
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)


40. 'Coucil of Europe Convention on Laundering - Search - Seizure and Confiscation of the Proceeds from Crime' is known for what?
The FIU of Russia
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.
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].
Review customer files and conduct random sampling of accounts.


41. What was the effect of the 1988 Vienna Convention as it relates to extradtition?
If provided for money laundering to be an internationally extraditable offense.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
Canada
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.


42. Fraud
The opposing part of a transaction or trade.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
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).
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.


43. Who appoints a 'Federal Receiver' (US)?
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
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
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 US Federal Court


44. Abusive Squeezes

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45. Cash Log

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46. Bust-out
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.
www.artloss.com
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.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.


47. FATF Sepcial Recommendation on Terrorist Financing -- SR Two
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
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 bank which uses the services of another bank - such as check clearing - wire transfers - etc. The bank providing the service is the 'Correspondent Bank'


48. What can result from on institution's disregard for the Basel Due Diligence Principle?
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.
They pool investors' money and invest those funds in financial instruments in an effort to turn a profit. They typically issue securities in 'private offerings' that are usually not required to be registered with sa securities or financial regulator.
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.


49. Common types of 'Derivatives'
Futures contracts - forwards - swaps or options.
Financial institutions should pay special attention to (and examine & document) complex - unusual large transactions - and all transactions which have no apparent economic or lawful purpose.
Quite simply - a plan. While in the US - this term is often associated with a nefarious plan - it should NOT be assumed to be evil - especially as it may appear on the ACAMS exam.
Impose AML requirements on alternative remittance systems.


50. What are the two types of Stored Value Cards?
Open and Closed system
a chain-referral scheme.
Financial Action Task Force
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data