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 Sepcial Recommendation on Terrorist Financing -- SR Two
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
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.
Open and Closed system
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).


2. Pink Sheets
that appear to be linked
tipped off that they are being investigated.
An electronic quotation system that displays quotes of many securities traded over the counter.
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.


3. What are some of the AML dangers of casino junkets?
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
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 exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
Financial Action Task Force on Money Laundering in South America


4. FATF Recommendation 11
Foreign Corrupt Practices Act
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.
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.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.


5. What is important about the US Money Laundering Control Act (MCLA)?
It was the first law in any country to make money laundering a crime.
The opposing part of a transaction or trade.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
tipped off that they are being investigated.


6. Reverse Flip

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7. FATF Sepcial Recommendation on Terrorist Financing -- SR Eight
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.


8. What is one of the cental stragetic tools required for effective action against money laundering?
Letters Rogatory
Futures contracts - forwards - swaps or options.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
Confiscation


9. What do boiler room salespeople typically sell?
Penny Stocks
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
a chain-referral scheme.


10. FATF Sepcial Recommendation on Terrorist Financing -- SR One
A market is which securities are bought and sold outside of establisehd securities markets.
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.
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
Take immediate steps to ratify and implement the UN instruments.


11. Convertible Preferred
no regulatory power or 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.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.


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

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13. FATF Recommendation 40
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.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
Provide mutual legal assistance.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.


14. Why do companies export their goods at prices far below those in their home country?
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
It was the first law in any country to make money laundering a crime.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.


15. What is a 'NCCT'?
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
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.


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

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17. Penny Stocks
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
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.
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.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism


18. Who appoints a 'Federal Receiver' (US)?
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.
A US Federal Court
www.artloss.com
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. Example of use of an Apostille
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.
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.
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.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.


20. How does 'Product Diversion' work?
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.
It conducts investigations in support of a government's confiscation or seizure efforts.
A US Federal Court
Expatriates sending money back to their home country or by other individuals sending money abroad.


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

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22. What normal business practise makes 'Product Division' possible?
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
Canada
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
Use of electronic clearing houses to facilitate electronic transfers of money that complete transactions between two parties where the buyer receives securities - goods - services etc. in exchange for the money.


23. CFT
Countering the Financing of Terrorism (Counter Terrorist Financing).
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
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'
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.


24. FATF Recommendation 7

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25. Money Mules
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.
Contract issued by an insurance company under which an investor provides the insurer with funds (a lump-sum or series of payments). The insurer then agrees to make periodic payments to the investor starting the immediately or in the future.
A 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.
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.


26. FATF Recommendation 15
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
They can accrue value as the price of the underlying stock rises.
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.


27. Distribution Channels (Insurance Industry)
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]
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
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.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.


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

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29. Cash Letter
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.


30. FATF Recommendation 16
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
Stored Value Cards - Mobile Payments - Internet Payments.
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.
Typical mass-market banking where individual customers use local branches of larger commercial banks.


31. The 'Art Loss Register'

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32. 'Commission Rogatoire' known in English as?
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
Letters Rogatory
People who help move the billions of dollars drug traffickers earn around the world.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.


33. What is the goal of the Egmont group?

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34. FATF Recommendation 6
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.


35. What can result from on institution's disregard for the Basel Due Diligence Principle?
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
disrupt or adversely afftect the business of the bank.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.


36. FATF Recommendation 37
Review customer files and conduct random sampling of accounts.
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.


37. Who issues the Internationa Narcotics Control Strategy Report (INCSR) and how often?
The US State Dept issues the report annually.
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.


38. FATF Recommendation 8
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Banking services between merchant banks and other financial institutions.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.


39. What is one of the Financial Service Authority's (UK) tasks?
A market is which securities are bought and sold outside of establisehd securities markets.
To reduce financial crime - including money laundering and terrorit financing.
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.


40. Market Manipulation
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.
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'.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.


41. 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.
Securities with very low marker price - volume and/or liquidity that are traded on a securities exchange or on the OTC markets. They tend to be more volatile than those on the major exchanges.
A 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 transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.


42. 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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43. FATF Recommendation 23
Penny Stocks
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
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.


44. Structuring is a common technique in jurisdictions that...
have in place compulsory currency reporting requirements.
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
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.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.


45. A 'panzi' scheme is named for whom?
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.
Charles Ponzi - an Italian immigrant to the US who spent 10 years in jail for a scheme that defrauded 40 -000 people out of $15 million.
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.


46. FATF's designated transactional threshold for Casinos (including Internet Casinos) is _____.
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
Financial Action Task Force
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
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]


47. Who appear to be predominant users of hawalas and other alternative remittance systems?
Expatriates sending money back to their home country or by other individuals sending money abroad.
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.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.


48. 'Competent Authorities' refers to _____.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.


49. Why is 'Know Your Customer's Customer' important?
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).
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.


50. What does a 'Commission Rogatoire' normally specify?
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.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.
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.
tipped off that they are being investigated.