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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. FATF's designated transactional threshold for Delaers is Precious metals and / or Precious Stones is _____.
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.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Terrorism and Terrorist Financing
2% - 5% ($590B - $1.5T)

2. Open System Stored Value Card
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 terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
Combines funds from various members and users them to trade in futures or options contracts.
Freeze and confiscate terrorist assets.

3. FATF
Financial Action Task Force
Funds transfers - Shell Corporations - Contractual Transactions.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.

4. What is one of the Financial Service Authority's (UK) tasks?
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
To reduce financial crime - including money laundering and terrorit financing.
Canada
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.

5. FCPA (US)
The opposing part of a transaction or trade.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
Foreign Corrupt Practices Act
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.

6. FATF Recommendation 6
Competent authorities should have powers of subpoena - search and seizure.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.

7. Investment Adviser
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
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.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
Person who - for compensation - provides advice on securities and investments and manages client assets.

8. Foriegn Shell Banks are vehicles for ______ & ______?
Money Laundering and Tax Evasion
It conducts investigations in support of a government's confiscation or seizure efforts.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.

9. How do 'Hedge Funds' operate?

10. FATF Recommendation 32
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
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.
Freeze and confiscate terrorist assets.

11. Retail Banking
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.
Typical mass-market banking where individual customers use local branches of larger commercial banks.
It conducts investigations in support of a government's confiscation or seizure efforts.
foreign correspondent banks

12. (Stock) Warrants
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
Penny Stocks
Provide mutual legal assistance.
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.

13. What tend to be the markings of Private Banking transactions?
Stored Value Cards - Mobile Payments - Internet Payments.
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
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.
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.

14. What does the 'SEC' (US Securities and Exchange Commission) do?
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
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.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.

15. Many jurisdictions have legislation to ensure that suspects are not ____?
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
tipped off that they are being investigated.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.

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

17. FATF Recommendation 40
no regulatory power or function
Confiscation
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].

18. Commodity Trading Advisor
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
Direct or indirect advisor on buying and selling futures or commodity options.
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
Financial Action Task Force on Money Laundering in South America

19. Portfolio Manager
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
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.
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.
Foreign Corrupt Practices Act

20. When was the Offshore Group of Banking Supervisors established? What was the impetus behind its establishment?
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
Letters Rogatory

21. Cash Log

22. FATF Recommendation 10
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.
Terrorism and Terrorist Financing
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).
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data

23. FATF Recommendation 37
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
No.

24. Commodity
Confiscation
Direct or indirect advisor on buying and selling futures or commodity options.
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
Countries should recognize money laundering as an extraditable offense.

25. Market Manipulation
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.
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.
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 recognize money laundering as an extraditable offense.

26. Variable Annuity
Report suspicious transactions linked to terrorism.
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.
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.

27. In Emerging Money Laundering Risks - what 3 areas are associated with 'Contractual Transactions'?
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 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.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.

28. Who appear to be predominant users of hawalas and other alternative remittance systems?
Freeze and confiscate terrorist assets.
Expatriates sending money back to their home country or by other individuals sending money abroad.
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.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.

29. 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 UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
Pouch activity.

30. FATF Recommendation 24
Harmful or Preferrential Tax Regimes.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
Financial Action Task Force
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.

31. What does Financial Sector AssessmentProgram (FSAP) do?
Stored Value Cards - Mobile Payments - Internet Payments.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.
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.
Foreign Corrupt Practices Act

32. Identification data
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.
Reliable - independent source of documents - data or information.
No.
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.

33. Counter Party
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.
Money Laundering and Tax Evasion
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.
The opposing part of a transaction or trade.

34. Apostille

35. FATF Sepcial Recommendation on Terrorist Financing -- SR Four
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
Report suspicious transactions linked to terrorism.
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
Strengthen customer identification measures in iternational and domestic wire transfers.

36. What is the Wolfsberg group?
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
foreign correspondent banks
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.

37. What do 'Hedge Funds' attempt to do?
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.

38. FATF Recommendation 5
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.
tipped off that they are being investigated.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.

39. The USA Patriot Act enacted a number of statutory provisions that bear directly on the procedures US financial institutions must follow in connection with their...
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
foreign correspondent banks
Solicits potential customers and issues the credit cards.
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.

40. Why is it imperative to have a strong Know Your Employee program?
The FIU of the UK
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
disrupt or adversely afftect the business of the bank.

41. Why is a 'money order' attractive to a money launderer?
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].

42. What does an Extradition Treaty specify?
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.
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.
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].

43. Legal Arrangements (Insurance Industry)
Reliable - independent source of documents - data or information.
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.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
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]

44. FATF Recommendation 29
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
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.
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

45. Pink Sheets
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.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
Foreign Corrupt Practices Act
An electronic quotation system that displays quotes of many securities traded over the counter.

46. FATF Sepcial Recommendation on Terrorist Financing -- SR One
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
Take immediate steps to ratify and implement the UN instruments.
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.
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.

47. FATF Recommendation 15
Foreign Corrupt Practices Act
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.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.

48. EAG
EurAsian Group
Confiscation
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.

49. Abusive Squeezes

50. SRO (Self-Regulatory Organizations)
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
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.
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.