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. A public perception that a bank is not able to manage its operational risk effectively can...
Solicits potential customers and issues the credit cards.
disrupt or adversely afftect the business of the bank.
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
Banking services between merchant banks and other financial institutions.


2. Vital Service Providers (VSPs)
Middle East and North Africa Financial Action Task Force
People who help move the billions of dollars drug traffickers earn around the world.
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.
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].


3. FATF Recommendation 28
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
Competent authorities should have powers of subpoena - search and seizure.


4. Distribution Channels (Insurance Industry)
Letters Rogatory
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
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]


5. Wholesale Banking
The FIU of Russia
Banking services between merchant banks and other financial institutions.
As a financial institution service that is very vulnerable to money laundering.
It conducts investigations in support of a government's confiscation or seizure efforts.


6. FATF Recommendation 25
The FIU of Russia
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.


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

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8. What tend to be the markings of Private Banking transactions?
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.
2% - 5% ($590B - $1.5T)
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
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).


9. FATF Recommendation 4
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
Money Laundering and Tax Evasion


10. FATF Sepcial Recommendation on Terrorist Financing -- SR Eight
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
The International Monetary Fund (IMF) and the world bank conduct the joint program.


11. Boiler Room
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).
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.
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.
a Sr Management level


12. Why is 'Know Your Customer's Customer' important?
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
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.
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.


13. Free Look Period
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
Direct or indirect advisor on buying and selling futures or commodity options.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.


14. FATF Recommendations examples of non-financial businesses and professions
To reduce financial crime - including money laundering and terrorit financing.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.


15. Downstream Correspondent Clearer
Financial Action Task Force
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 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.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).


16. (Credit Card) Third-Party processor
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'
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.
The FIU of the UK


17. Why does a launderer try to run transactions through a concentration account of a financial institution?
It was the first law in any country to make money laundering a crime.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
People who help move the billions of dollars drug traffickers earn around the world.


18. FATF Recommendation 1
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
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.


19. What is the Wolfsberg group?
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).
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 grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).


20. SRO (Self-Regulatory Organizations)
Financial Action Task Force
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 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.
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.


21. What is the Federal Service for Financial Monitoring?
The FIU of Russia
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
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.
Provide mutual legal assistance.


22. Variable Annuity
A fund setup by an investment trust that issues a fixed number of shares to its investors. As such - the market price of the shares fluctuates - often selling at a premium or discount to the fund's net asset value (NAV).
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
a chain-referral scheme.
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.


23. GIABA
Intergovernmental Action Group against Money Laundering in Africa
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
The FIU of Russia
Solicits potential customers and issues the credit cards.


24. FATF Recommendation 38
Take expeditious action to requests by foreign countries to identify - freeze - seize and confiscate property that is proceeds of money laundering or a predicate crime.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
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.
No.


25. The Vienns Convention
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.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
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.


26. 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...
foreign correspondent banks
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.
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
The nature of the request - the relevant criminal charges in the requesting country - the legal provision under which the request is made - and the information that is sought.


27. What can result from on institution's disregard for the Basel Due Diligence Principle?
EurAsian Group
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
Financial Action Task Force


28. What is the primary use of a 'Mutual Legal Assistance Treaty'?
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
Penny Stocks
Countering the Financing of Terrorism (Counter Terrorist Financing).


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

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30. FATF Recommendation 20
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 CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
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. FATF Recommendation 32
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
A professional responsible for the securities portfolio of an individual or institutional investor. In return for a fee - the manager has the responsibility of choosing and managing assets.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.


32. How are 'Predicate Crimes' sometimes identified?

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33. Commodity Pool
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
Combines funds from various members and users them to trade in futures or options contracts.
a Sr Management level


34. US law prohibhits Foriegn Shell Banks from ____?
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
Futures contracts - forwards - swaps or options.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)


35. FATF Recommendation 24
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].
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.
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.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.


36. Affidavit
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
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.
Penny Stocks
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.


37. Open System Stored Value Card
Funds transfers - Shell Corporations - Contractual Transactions.
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
An introducing broker-dealer with an exclusive written agreement with a Futures Commission Merchant (FCM) that obligates the FCM to assume responsibility for the introducing broker's performance.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.


38. UK courts view on 'Suspicion'
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
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.
Intergovernmental Action Group against Money Laundering in Africa
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.


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

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40. Why is a 'money order' attractive to a money launderer?
Futures contracts - forwards - swaps or options.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.


41. Money Mules
Type of foreign bank that is incorporated in the host country but is considered to be owned by a foreign parent bank. It only needs to operarted under the host country's regulations.
A 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.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
To reduce financial crime - including money laundering and terrorit financing.


42. What do 'Hedge Funds' attempt to do?
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
The FIU of the UK


43. FATF Recommendation 40
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
Confiscation
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.


44. Fraud
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
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.
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.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.


45. FATF Recommendation 27
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
a chain-referral scheme.
A market is which securities are bought and sold outside of establisehd securities markets.


46. What is meant by 'Know Your Correspondent Bank'?

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47. FATF Recommendation 9
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
Harmful or Preferrential Tax Regimes.
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.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.


48. EAG
Solicits potential customers and issues the credit cards.
Freeze and confiscate terrorist assets.
EurAsian Group
Dealers in precious metals/stones - trust and company services providers - lawyers - notaries and accountants should all be required to report suspicious activity - but legal privilege cannot be violated.


49. Who appoints a 'Federal Receiver' (US)?
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
A US Federal Court
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.
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.


50. FATF Recommendation 7

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