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 12
The opposing part of a transaction or trade.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
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.


2. Who issues the Internationa Narcotics Control Strategy Report (INCSR) and how often?
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.
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.
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
The US State Dept issues the report annually.


3. Structuring is a common technique in jurisdictions that...
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'
have in place compulsory currency reporting requirements.
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].
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.


4. Who appoints a 'Federal Receiver' (US)?
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
A US Federal Court
Placement - Layering - Integration.
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.


5. What does Financial Sector AssessmentProgram (FSAP) do?
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
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.
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.


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

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7. FATF Recommendation 20
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
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.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.


8. (Credit card) Acquiring Bank
Financial Action Task Force
Processes transactions for merchants who accept credit cards.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
Direct or indirect advisor on buying and selling futures or commodity options.


9. A public perception that a bank is not able to manage its operational risk effectively can...
bear the mark 'APOSTILLE'
disrupt or adversely afftect the business of the bank.
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.


10. Portfolio Manager
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
Financial institutions should have adequate supervision and regulation. Ensure no criminal element in position on control. Money transfer/exchangers should be registered and subjected to monitoring.
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.


11. 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.
Financial Action Task Force
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.


12. Why is 'Know Your Correspondent Bank' important?
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.
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
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.


13. FATF's designated transactional threshold for Financial Insitutions is _____.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.


14. FATF Recommendation 14
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
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.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.


15. FATF Sepcial Recommendation on Terrorist Financing -- SR One
Take immediate steps to ratify and implement the UN instruments.
Stored Value Cards - Mobile Payments - Internet Payments.
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
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.


16. Boiler Room
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].
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 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.
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.


17. FATF Recommendation 39
Countries should recognize money laundering as an extraditable offense.
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.


18. Express Trust
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
Intergovernmental Action Group against Money Laundering in Africa
that appear to be linked


19. FATF Recommendation 3
Countries should recognize money laundering as an extraditable offense.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
Open and Closed system
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.


20. A 'Cash Letter' can also be referred to as _____.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
Pouch activity.
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.


21. Examples of VSP's
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.
An electronic quotation system that displays quotes of many securities traded over the counter.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
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.


22. In what country is the Egmont Group Secretariat now located?
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
Middle East and North Africa Financial Action Task Force
An account that does not show activity other than the posting of interest or account maintenance fees.
Canada


23. What is the FCPA primarily known for?
Futures contracts - forwards - swaps or options.
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.
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 world's largest private DB of stolen art.


24. FATF Sepcial Recommendation on Terrorist Financing -- SR Nine
disrupt or adversely afftect the business of the bank.
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.
Freeze and confiscate terrorist assets.
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.


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

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26. What does FIU do?
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
The opposing part of a transaction or trade.
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.


27. Margin
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
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]
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
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.


28. FATF Recommendation 18
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
Placement - Layering - Integration.
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.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism


29. Bust-out
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
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.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
Financial Action Task Force


30. Commodity Pool
Combines funds from various members and users them to trade in futures or options contracts.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
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.


31. Vital Service Providers (VSPs)
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
People who help move the billions of dollars drug traffickers earn around the world.
have in place compulsory currency reporting requirements.
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.


32. Reverse Flip

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33. Example of use of an Apostille
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.
Competent authorities should have powers of subpoena - search and seizure.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].


34. Options/Options Contract
Pouch activity.
The right - but not the obligation - to buy or sell a set amount of something - such as a share or commodity - at a set price after a set expiration date.
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.
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.


35. FATF Recommendation 16
They can accrue value as the price of the underlying stock rises.
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.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.


36. Arrest Warrant
Confiscation
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
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.


37. What is the goal of FSAP?
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
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


38. What does the principal US money laundering law look for before implementing its 'Extraterritorial Reach'?
Take immediate steps to ratify and implement the UN instruments.
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.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
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


39. FCPA (US)
Foreign Corrupt Practices Act
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.


40. A notary can issue a Apostille but it must be in a country that signed The Hague Convention (1961) and it must ___________. If the notary doesn't understand - find another one.

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41. Convertible Preferred
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.
As 'felonies' or 'all offenses in the criminal code'.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
Banking services between merchant banks and other financial institutions.


42. Commodity Trading Advisor
EurAsian Group
Direct or indirect advisor on buying and selling futures or commodity options.
Processes transactions for merchants who accept credit cards.
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.


43. (Credit Card) Issuing Bank
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
Solicits potential customers and issues the credit cards.
Person who - for compensation - provides advice on securities and investments and manages client assets.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.


44. Common types of 'Derivatives'
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
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.
Futures contracts - forwards - swaps or options.


45. FATF Recommendation 40
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
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.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.


46. FATF Sepcial Recommendation on Terrorist Financing -- SR Eight
Strengthen customer identification measures in iternational and domestic wire transfers.
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.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.


47. What is the Wolfsberg group?
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.
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.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.


48. Basel's 'CDD for Banks' states that the decision to open an account for a PEP should be taken at...
a Sr Management level
Money Laundering and Tax Evasion
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.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.


49. What are included in the Wolfsberg AML Principles on Private Banking?
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
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.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.


50. Abusive Squeezes

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