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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. Basel's 'CDD for Banks' states that the decision to open an account for a PEP should be taken at...
Middle East and North Africa Financial Action Task Force
a Sr Management level
The opposing part of a transaction or trade.
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.

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

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3. FATF Recommendation 14
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.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.

4. Legal Arrangements (Insurance Industry)
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.
Harmful or Preferrential Tax Regimes.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
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]

5. FATF Sepcial Recommendation on Terrorist Financing -- SR Nine
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.

6. What is a Private Investment company (PIC)?
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
Canada
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.

7. What is meant by 'Know Your Customer's customer'?
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
Report suspicious transactions linked to terrorism.
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.

8. Open System Stored Value Card
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 corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
They can accrue value as the price of the underlying stock rises.
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.

9. What is a Financial Intelligence Unit?
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
As a financial institution service that is very vulnerable to money laundering.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.

10. Convertible Bond
They can accrue value as the price of the underlying stock rises.
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.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
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.

11. 'Commission Rogatoire' known in English as?
Intergovernmental Action Group against Money Laundering in Africa
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.
Letters Rogatory

12. Fraud
tipped off that they are being investigated.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)

13. Commodity Trading Advisor
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.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
Direct or indirect advisor on buying and selling futures or commodity options.

14. FATF Recommendation 25
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
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.
As a financial institution service that is very vulnerable to money laundering.
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.

15. FATF Recommendation 30
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.

16. Credit Card Associations
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.
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.
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
Intergovernmental Action Group against Money Laundering in Africa

17. FATF Recommendation 11
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
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.

18. FATF Recommendation 22

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19. What is the significance of 'Non-Financial Trades and Businesses' in realtion to Money Laundering?
Money Laundering and Tax Evasion
Funds transfers - Shell Corporations - Contractual Transactions.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).

20. FATF Recommendation 10
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
2% - 5% ($590B - $1.5T)

21. FATF Recommendation 1
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
People who help move the billions of dollars drug traffickers earn around the world.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.

22. A pyramid scheme is also called...
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
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
Direct or indirect advisor on buying and selling futures or commodity options.
a chain-referral scheme.

23. What must a financial institution do if they have 'Exempt Accounts'?
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
disrupt or adversely afftect the business of the bank.
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
An account that does not show activity other than the posting of interest or account maintenance fees.

24. What is the goal of the Egmont group?

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25. FATF Recommendation 26
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
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.
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
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.

26. Downstream Correspondent Clearer
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.
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.
The opposing part of a transaction or trade.
Placement - Layering - Integration.

27. SRO (Self-Regulatory Organizations)
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
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).
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.
Open and Closed system

28. Why is it imperative to have a strong Know Your Employee program?
The world's largest private DB of stolen art.
Solicits potential customers and issues the credit cards.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
As a financial institution service that is very vulnerable to money laundering.

29. FATF Recommendation 39
A person who tranfers stolen money (or merchandise) from one country to another - often as a result of online scams. Transfers - can be done electronically - via mail or courier service or in person.
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
Countries should recognize money laundering as an extraditable offense.
The UN Convention against Transnational Organized Crime [Adopted 12/2000].

30. What is the aim of Joint Money Laundering Steering Group? (UK)
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws

31. Variable Annuity
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.
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 recognize money laundering as an extraditable offense.
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.

32. FATF Recommendation 36
Provide mutual legal assistance.
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
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.
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.

33. FATF Recommendation 9
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
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.
Securities with very low marker price - volume and/or liquidity that are traded on a securities exchange or on the OTC markets. They tend to be more volatile than those on the major exchanges.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.

34. FATF Recommendation 40
Harmful or Preferrential Tax Regimes.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
Solicits potential customers and issues the credit cards.

35. 'Competent Authorities' refers to _____.
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
no regulatory power or function
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.

36. Identification data
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
Refers to dishonest broker-dealers who set up a group of high pressure salespeople who use banks of telephones to make cold calls to as many potential investors as possible.
Securities with very low marker price - volume and/or liquidity that are traded on a securities exchange or on the OTC markets. They tend to be more volatile than those on the major exchanges.
Reliable - independent source of documents - data or information.

37. Agent (Insurance Industry)
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.
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
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.
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

38. 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.
Placement - Layering - Integration.
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
Reliable - independent source of documents - data or information.

39. FATF Recommendation 12
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
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.

40. What were recently identified as Emerging Money Laundering risks?
The International Monetary Fund (IMF) and the world bank conduct the joint program.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
Funds transfers - Shell Corporations - Contractual Transactions.

41. FATF Recommendation 33
Countries should recognize money laundering as an extraditable offense.
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
foreign correspondent banks
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.

42. A 'panzi' scheme is named for whom?
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
no regulatory power or function
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
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.

43. Futures Commission Merchant (FCM)
Impose AML requirements on alternative remittance systems.
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.

44. Moneyval
Confiscation
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.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.

45. What do boiler room salespeople typically sell?
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
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.
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
Penny Stocks

46. Nostro

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47. Portfolio Manager
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.
Money Laundering and Tax Evasion
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
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

48. What are included in the Wolfsberg AML Principles on Private Banking?
Processes transactions for merchants who accept credit cards.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
Freeze and confiscate terrorist assets.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.

49. A 'Cash Letter' can also be referred to as _____.
The world's largest private DB of stolen art.
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.
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.
Pouch activity.

50. What is the goal of FSAP?
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
Futures contracts - forwards - swaps or options.
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.