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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 10
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Take immediate steps to ratify and implement the UN instruments.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.

2. 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.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
Person who - for compensation - provides advice on securities and investments and manages client assets.
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.

3. FATF Sepcial Recommendation on Terrorist Financing -- SR One
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
Take immediate steps to ratify and implement the UN instruments.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.

4. FATF Recommendation 31
Funds transfers - Shell Corporations - Contractual Transactions.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
Competent authorities should have powers of subpoena - search and seizure.
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.

5. What is the Serious Organised Crime Agency (SOCA)?
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.
The FIU of the UK
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.

6. Dormant Account
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.
People who help move the billions of dollars drug traffickers earn around the world.
An account that does not show activity other than the posting of interest or account maintenance fees.
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.

7. May a shell bank maintain a correspondent account with a US bank?
No.
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
As a financial institution service that is very vulnerable to money laundering.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.

8. USA Patriot Act Section 312 'Offshore Bank'
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.
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'.
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.
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.

9. Structuring is a common technique in jurisdictions that...
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.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
have in place compulsory currency reporting requirements.

10. What is one of the cental stragetic tools required for effective action against money laundering?
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
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.
Confiscation
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.

11. Scheme
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.
Review customer files and conduct random sampling of accounts.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
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.

12. 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.
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
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.
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.

13. FATF Recommendation 7

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

15. How does the Egmont group help its members?
Freeze and confiscate terrorist assets.
Review customer files and conduct random sampling of accounts.
No.
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.

16. FATF Recommendation 9
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
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.
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.

17. FATF Recommendation 30
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.
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.
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.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.

18. What is a Financial Intelligence Unit?
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
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.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.

19. Why is 'Know Your Correspondent Bank' important?
Review customer files and conduct random sampling of accounts.
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.
As a financial institution service that is very vulnerable to money laundering.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.

20. How do 'Hedge Funds' operate?

21. When was the Offshore Group of Banking Supervisors established? What was the impetus behind its establishment?
Competent authorities should have powers of subpoena - search and seizure.
Processes transactions for merchants who accept credit cards.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
Impose AML requirements on alternative remittance systems.

22. FATF's designated transactional threshold for Financial Insitutions is _____.
Combines funds from various members and users them to trade in futures or options contracts.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
It conducts investigations in support of a government's confiscation or seizure efforts.
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.

23. What is one of the Financial Service Authority's (UK) tasks?
An account that does not show activity other than the posting of interest or account maintenance fees.
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.
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).
To reduce financial crime - including money laundering and terrorit financing.

24. The Vienns Convention
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.
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).
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.

25. 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.
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.
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.
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.

26. FATF Sepcial Recommendation on Terrorist Financing -- SR Four
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
Report suspicious transactions linked to terrorism.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].

27. Abusive Squeezes

28. Nostro

29. What must a financial institution do if they have 'Exempt Accounts'?
Competent authorities should have powers of subpoena - search and seizure.
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.
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.

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

31. Corporate Bank

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

33. Penny Stocks
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
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.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
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.

34. What is private investment company also known as?
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.
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.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
Expatriates sending money back to their home country or by other individuals sending money abroad.

35. Transparency International
2% - 5% ($590B - $1.5T)
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.

36. The Palemo Convention
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).

37. What was the target of UN Security Council Resolution 1373?
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
Terrorism and Terrorist Financing
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.

38. Operational risks in KYC context relate to...
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.
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.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.

39. Automated Sale
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.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
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.
Money Laundering and Tax Evasion

40. OCC Office of the Comptroller of the Currency
A market is which securities are bought and sold outside of establisehd securities markets.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.

41. FATF Recommendation 33
Person who - for compensation - provides advice on securities and investments and manages client assets.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.

42. FATF Recommendation 39
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
Countries should recognize money laundering as an extraditable offense.
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.

43. Short Sale

44. How is 'Legal Risk' defined by the 2001 Basel Due Diligence Principles?
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]
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.
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
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.

45. What tend to be the markings of Private Banking transactions?
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
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.
Processes transactions for merchants who accept credit cards.
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.

46. OTC markets Over-The-Counter
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'.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
A market is which securities are bought and sold outside of establisehd securities markets.

47. Variable Annuity
Placement - Layering - Integration.
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.
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.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.

48. Investment Adviser
Person who - for compensation - provides advice on securities and investments and manages client assets.
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]
Review customer files and conduct random sampling of accounts.
Solicits potential customers and issues the credit cards.

49. Why do companies export their goods at prices far below those in their home country?
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.
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
Placement - Layering - Integration.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.

50. Derivatives
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
Confiscation
2% - 5% ($590B - $1.5T)
Foreign Corrupt Practices Act