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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. Dormant Account
2% - 5% ($590B - $1.5T)
An account that does not show activity other than the posting of interest or account maintenance fees.
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.

2. Short Sale

3. What is a 'NCCT'?
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.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
that appear to be linked
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.

4. Why is a 'money order' attractive to a money launderer?
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
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.
Competent authorities should have powers of subpoena - search and seizure.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.

5. What is the significance of 'Non-Financial Trades and Businesses' in realtion to Money Laundering?
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.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
People who help move the billions of dollars drug traffickers earn around the world.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).

6. FATF Recommendation 34
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.

7. Mutual Fund
Typical mass-market banking where individual customers use local branches of larger commercial banks.
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.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.

8. FATF Recommendation 38
Money Laundering and Tax Evasion
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
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.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.

9. FATF Sepcial Recommendation on Terrorist Financing -- SR Eight
Take immediate steps to ratify and implement the UN instruments.
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.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.

10. FATF Recommendation 16
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
2% - 5% ($590B - $1.5T)
As a financial institution service that is very vulnerable to money laundering.
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.

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

12. How is 'Legal Risk' defined by the 2001 Basel Due Diligence Principles?
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
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.
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
Strengthen customer identification measures in iternational and domestic wire transfers.

13. 'Open-end Mutual Fund' (or Company)

14. FATF Recommendation 19
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
It one wants to open a bank account overseas - but do it through the mail - the bank may need to be assured that the copy of the passport is correct. The Apostille mark can assure this.
Funds transfers - Shell Corporations - Contractual Transactions.
Review customer files and conduct random sampling of accounts.

15. Three stages of money laundering
Middle East and North Africa Financial Action Task Force
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.
Placement - Layering - Integration.
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.

16. 'Kiting' via credit card
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.
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
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).
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.

17. Who are the parties involved in a trust?
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
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.

18. FATF Recommendation 25
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.
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'.
Middle East and North Africa Financial Action Task Force
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.

19. FATF Recommendation 28
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.
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.
Competent authorities should have powers of subpoena - search and seizure.
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.

20. Express Trust
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.

21. MENAFATF
Stored Value Cards - Mobile Payments - Internet Payments.
Money Laundering and Tax Evasion
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
Middle East and North Africa Financial Action Task Force

22. USA Patriot Act Section 312 'Offshore Bank'
2% - 5% ($590B - $1.5T)
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.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.

23. Credit Card Associations
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
that appear to be linked
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.
People who help move the billions of dollars drug traffickers earn around the world.

24. What is the primary use of a 'Mutual Legal Assistance Treaty'?
An electronic quotation system that displays quotes of many securities traded over the counter.
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
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.

25. Abusive Squeezes

26. What criterion does the US need to enforce its 'Extraterritorial Reach'?

27. Examples of White-collar crime
An account that does not show activity other than the posting of interest or account maintenance fees.
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 - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
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).

28. Commodity Trading Advisor
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].
Direct or indirect advisor on buying and selling futures or commodity options.
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.

29. FATF Sepcial Recommendation on Terrorist Financing -- SR Seven
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'
To reduce financial crime - including money laundering and terrorit financing.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
Strengthen customer identification measures in iternational and domestic wire transfers.

30. As considered by UN and OECD - these are jurisdictions that have no or low tax rates - and do not attract real business or foreign investment
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
Harmful or Preferrential Tax Regimes.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.

31. Characteristics of an 'Open System Stored Value Card'
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).
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
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.

32. Affidavit
They can accrue value as the price of the underlying stock rises.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
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.
Person who - for compensation - provides advice on securities and investments and manages client assets.

33. Commodity Pool
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
An electronic quotation system that displays quotes of many securities traded over the counter.
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]
Combines funds from various members and users them to trade in futures or options contracts.

34. A pyramid scheme is also called...
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
Intergovernmental Action Group against Money Laundering in Africa
a chain-referral scheme.
As a financial institution service that is very vulnerable to money laundering.

35. FATF Sepcial Recommendation on Terrorist Financing -- SR Three
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
Freeze and confiscate terrorist assets.
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.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.

36. Margin
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.
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.
Countering the Financing of Terrorism (Counter Terrorist Financing).
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.

37. Vital Service Providers (VSPs)
People who help move the billions of dollars drug traffickers earn around the world.
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.
An account that does not show activity other than the posting of interest or account maintenance fees.
Reliable - independent source of documents - data or information.

38. GAFISUD
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
Strengthen customer identification measures in iternational and domestic wire transfers.
Financial Action Task Force on Money Laundering in South America
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.

39. The Palemo Convention
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
Countries should recognize money laundering as an extraditable offense.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
a chain-referral scheme.

40. What does an Extradition Treaty specify?
Typical mass-market banking where individual customers use local branches of larger commercial banks.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.

41. FATF Recommendation 22

42. FATF Recommendations examples of non-financial businesses and professions
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
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.
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.

43. FATF
Financial Action Task Force
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
www.artloss.com
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.

44. FATF Recommendation 18
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.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
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
The opposing part of a transaction or trade.

45. FATF Sepcial Recommendation on Terrorist Financing -- SR Six
Impose AML requirements on alternative remittance systems.
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.
The FIU of the UK
Competent authorities should have powers of subpoena - search and seizure.

46. When is a jurisdiction considered to be 'ring-fenced'?
Letters Rogatory
Reliable - independent source of documents - data or information.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
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.

47. May a shell bank maintain a correspondent account with a US bank?
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
No.
Banking services between merchant banks and other financial institutions.

48. FATF Recommendation 14
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
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.
a chain-referral scheme.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.

49. FATF Recommendation 30
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
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).

50. Basel's 'CDD for Banks' states that the decision to open an account for a PEP should be taken at...
a Sr Management level
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
Foreign Corrupt Practices Act
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'