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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. The 'Art Loss Register'

2. 'Coucil of Europe Convention on Laundering - Search - Seizure and Confiscation of the Proceeds from Crime' is known for what?
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.
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
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.

3. A pyramid scheme is also called...
a chain-referral scheme.
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.
Penny Stocks

4. FATF Recommendation 11
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.
It conducts investigations in support of a government's confiscation or seizure efforts.
www.artloss.com
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.

5. Structuring is a common technique in jurisdictions that...
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
have in place compulsory currency reporting requirements.
Take immediate steps to ratify and implement the UN instruments.
disrupt or adversely afftect the business of the bank.

6. Commodity Pool
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.
Combines funds from various members and users them to trade in futures or options contracts.
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.
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.

7. FATF Recommendation 18
Expatriates sending money back to their home country or by other individuals sending money abroad.
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.
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.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.

8. Common types of 'Derivatives'
Futures contracts - forwards - swaps or options.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.

9. Abusive Squeezes

10. White-Collar crime

11. In general terms - EDD requires what of a financial institution?

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

13. CFT
Countering the Financing of Terrorism (Counter Terrorist Financing).
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
The US State Dept issues the report annually.

14. Wire Transfers
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
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.
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.

15. FATF Recommendation 4
No.
Competent authorities should have powers of subpoena - search and seizure.
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
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.

16. The Palemo Convention
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
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.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
The UN Convention against Transnational Organized Crime [Adopted 12/2000].

17. FATF Recommendation 25
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.

18. Cash Letter
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
Often co-branded by financial institution; may have VISA or MasterCard logos; can be reloadable; usually can access ATMs for withdrawls globally; non-customers can buy them.
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

19. FATF Sepcial Recommendation on Terrorist Financing -- SR Six
Impose AML requirements on alternative remittance systems.
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
disrupt or adversely afftect the business of the bank.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.

20. FATF Recommendation 36
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.
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
Provide mutual legal assistance.
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.

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

22. Three stages of money laundering
As a financial institution service that is very vulnerable to money laundering.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
It was the first law in any country to make money laundering a crime.
Placement - Layering - Integration.

23. In Emerging Money Laundering Risks - what 3 methods are identified as 'Funds Transfers'?
Stored Value Cards - Mobile Payments - Internet Payments.
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.
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.
The International Monetary Fund (IMF) and the world bank conduct the joint program.

24. What normal business practise makes 'Product Division' possible?
Urge investors to buy 'house stocks' - stocks that the firm buys and sells as a market maker or has in its inventory. Oftentimes - they are running a 'pump-and-dumo' scheme.
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.

25. What does FIU do beyond what FIU does?

26. Bust-out
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.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
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 apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.

27. What are the three main functions of a 'Transfer Agent'?
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
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.
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
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.

28. What are some of the AML dangers of casino junkets?
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.
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.
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)

29. How does the Egmont group help its members?
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.
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.

30. FATF Recommendation 27
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
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.
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.

31. What does the 'SEC' (US Securities and Exchange Commission) do?
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
bear the mark 'APOSTILLE'
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.

32. FATF Recommendation 24
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.
A deliberate attempt to interfere with the free and fair operation of the market and create artificial - false or misleading appearances with respect to the price of - or market for a security - commodity or currency.
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.

33. 'Competent Authorities' refers to _____.
Report suspicious transactions linked to terrorism.
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).
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.

34. US law prohibhits Foriegn Shell Banks from ____?
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)

35. What were recently identified as Emerging Money Laundering risks?
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
Financial Action Task Force
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
Funds transfers - Shell Corporations - Contractual Transactions.

36. Apostille

37. Characteristics of an 'Open System Stored Value Card'
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
Often co-branded by financial institution; may have VISA or MasterCard logos; can be reloadable; usually can access ATMs for withdrawls globally; non-customers can buy them.
foreign correspondent banks
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.

38. Convertible Preferred
Futures contracts - forwards - swaps or options.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
Solicits potential customers and issues the credit cards.
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.

39. Why is 'refining' critical to a money launderer's efforts?
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.
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.
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.

40. Why do companies export their goods at prices far below those in their home country?
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.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.

41. Why is understanding 'Product Diversion' important to the AML investigator?
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.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
The International Monetary Fund (IMF) and the world bank conduct the joint program.
Placement - Layering - Integration.

42. Who issues the Internationa Narcotics Control Strategy Report (INCSR) and how often?
a chain-referral scheme.
The US State Dept issues the report annually.
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
Competent authorities should have powers of subpoena - search and seizure.

43. FATF Recommendation 28
Competent authorities should have powers of subpoena - search and seizure.
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.
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.
www.artloss.com

44. Futures Commission Merchant (FCM)
www.artloss.com
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.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
The US State Dept issues the report annually.

45. Respondent Bank

46. FATF Recommendation 13
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
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.
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.
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.

47. What do boiler room salespeople typically sell?
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
bear the mark 'APOSTILLE'
Penny Stocks
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.

48. What is the goal of FSAP?
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
Take immediate steps to ratify and implement the UN instruments.

49. Penny Stocks
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
It conducts investigations in support of a government's confiscation or seizure efforts.
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.

50. FATF Recommendation 35
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
The FIU of the UK
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).