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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 28
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
Competent authorities should have powers of subpoena - search and seizure.

2. Who appear to be predominant users of hawalas and other alternative remittance systems?
Canada
a Sr Management level
As 'felonies' or 'all offenses in the criminal code'.
Expatriates sending money back to their home country or by other individuals sending money abroad.

3. (Stock) Warrants
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
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.
Processes transactions for merchants who accept credit cards.

4. 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.
Futures contracts - forwards - swaps or options.
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.
Report suspicious transactions linked to terrorism.

5. Convertible Bond
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.
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.
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.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.

6. (Credit card) Acquiring Bank
Processes transactions for merchants who accept credit cards.
have in place compulsory currency reporting requirements.
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.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.

7. FATF Recommendation 3
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
To reduce financial crime - including money laundering and terrorit financing.
A US Federal Court
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.

8. FATF Recommendation 37
People who help move the billions of dollars drug traffickers earn around the world.
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
If provided for money laundering to be an internationally extraditable offense.

9. Wholesale Banking
Charles Ponzi - an Italian immigrant to the US who spent 10 years in jail for a scheme that defrauded 40 -000 people out of $15 million.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
Harmful or Preferrential Tax Regimes.
Banking services between merchant banks and other financial institutions.

10. 'Competent Authorities' refers to _____.
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.

11. Abusive Squeezes

12. Wire Transfers
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.
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.

13. A 'panzi' scheme is named for whom?
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
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.
Charles Ponzi - an Italian immigrant to the US who spent 10 years in jail for a scheme that defrauded 40 -000 people out of $15 million.

14. Pink Sheets
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
An electronic quotation system that displays quotes of many securities traded over the counter.
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.
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.

15. As considered by UN and OECD - these are jurisdictions that have no or low tax rates - and do not attract real business or foreign investment
Solicits potential customers and issues the credit cards.
Harmful or Preferrential Tax Regimes.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)

16. OTC markets Over-The-Counter
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
EurAsian Group
A market is which securities are bought and sold outside of establisehd securities markets.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.

17. What are the two types of Stored Value Cards?
Open and Closed system
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.
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.
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.

18. Respondent Bank

19. How do most governments view Private Banking?
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.
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
As a financial institution service that is very vulnerable to money laundering.
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.

20. How is 'Identity theft' often accomplished?
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.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.

21. Open System Stored Value Card
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.

22. Why is it imperative to have a strong Know Your Employee program?
have in place compulsory currency reporting requirements.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
Banking services between merchant banks and other financial institutions.
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.

23. 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...
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 enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
no regulatory power or function
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.

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

25. FATF Recommendation 6
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
As a financial institution service that is very vulnerable to money laundering.

26. 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.
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.

27. 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.

28. Short Sale

29. What does the principal US money laundering law look for before implementing its 'Extraterritorial Reach'?
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
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
Terrorism and Terrorist Financing
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.

30. Behaviour detection

31. FATF Recommendation 40
Charles Ponzi - an Italian immigrant to the US who spent 10 years in jail for a scheme that defrauded 40 -000 people out of $15 million.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
To reduce financial crime - including money laundering and terrorit financing.

32. What is the FCPA primarily known for?
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).
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'.
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
Confiscation

33. (Credit Card) Third-Party processor
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 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.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.

34. What tend to be the markings of Private Banking transactions?
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
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.
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)

35. FATF Recommendation 12
Futures contracts - forwards - swaps or options.
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)

36. Examples of VSP's
As a financial institution service that is very vulnerable to money laundering.
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.
have in place compulsory currency reporting requirements.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.

37. FATF Sepcial Recommendation on Terrorist Financing -- SR Five

38. How do 'Hedge Funds' operate?

39. FATF Recommendation 13
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
Canada
Charles Ponzi - an Italian immigrant to the US who spent 10 years in jail for a scheme that defrauded 40 -000 people out of $15 million.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.

40. Who are the parties involved in a trust?
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
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.
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.
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).

41. Futures Commission Merchant (FCM)
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.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
Financial Action Task Force on Money Laundering in South America

42. What was the effect of the 1988 Vienna Convention as it relates to extradtition?
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
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]
If provided for money laundering to be an internationally extraditable offense.
Countries should recognize money laundering as an extraditable offense.

43. FATF Recommendation 4
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
The FIU of Russia
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.

44. What is the Federal Service for Financial Monitoring?
Review customer files and conduct random sampling of accounts.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
The FIU of Russia
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.

45. What is a Financial Intelligence Unit?
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
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]
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.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.

46. Three stages of money laundering
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.
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
Placement - Layering - Integration.

47. (Credit Card) Issuing Bank
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
disrupt or adversely afftect the business of the bank.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
Solicits potential customers and issues the credit cards.

48. 'Kiting' via credit card
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
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)
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.

49. Should one ever file a Suspicious Transaction Report (STR/SAR) based on a person's profile?

50. When is a jurisdiction considered to be 'ring-fenced'?
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
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.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.