Test your basic knowledge |

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. Commodity Pool Operator
Intergovernmental Action Group against Money Laundering in Africa
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.
Futures contracts - forwards - swaps or options.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.

2. What is the goal of FSAP?
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
Countries should recognize money laundering as an extraditable offense.
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.
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.

3. FATF's designated transactional threshold for Financial Insitutions is _____.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Pouch activity.
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
To reduce financial crime - including money laundering and terrorit financing.

4. Fraud
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
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.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
Money Laundering and Tax Evasion

5. Who appoints a 'Federal Receiver' (US)?
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.
A US Federal Court
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
Countering the Financing of Terrorism (Counter Terrorist Financing).

6. USA Patriot Act Section 312 'Offshore Bank'
Intergovernmental Action Group against Money Laundering in Africa
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.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.

7. (Credit Card) Third-Party processor
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.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
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.

8. FATF Recommendation 13
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.

9. What do boiler room salespeople typically sell?
The International Monetary Fund (IMF) and the world bank conduct the joint program.
Processes transactions for merchants who accept credit cards.
Penny Stocks
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

10. What is a Financial Intelligence Unit?
Penny Stocks
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.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
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.

11. Wholesale Banking
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
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.
Banking services between merchant banks and other financial institutions.
tipped off that they are being investigated.

12. FATF Sepcial Recommendation on Terrorist Financing -- SR Eight
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
2% - 5% ($590B - $1.5T)
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.

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

14. In Emerging Money Laundering Risks - what 3 areas are associated with 'Contractual Transactions'?
Confiscation
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.

15. What tend to be the markings of Private Banking transactions?
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
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.
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.

16. White-Collar crime

17. 'Commission Rogatoire' known in English as?
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
Letters Rogatory
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
Open and Closed system

18. FATF Recommendation 23
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
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.
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
Middle East and North Africa Financial Action Task Force

19. OTC markets Over-The-Counter
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.
A market is which securities are bought and sold outside of establisehd securities markets.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.

20. Examples of VSP's
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
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.
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.

21. FATF's designated transactional threshold for Delaers is Precious metals and / or Precious Stones is _____.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
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.
Financial Action Task Force
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.

22. What does Financial Sector AssessmentProgram (FSAP) do?
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
Harmful or Preferrential Tax Regimes.
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.

23. Investigative Log
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.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.

24. Underwriting
Money Laundering and Tax Evasion
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.
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).

25. What is a Private Investment company (PIC)?
have in place compulsory currency reporting requirements.
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
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.

26. Nostro

27. FATF Recommendation 10
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data

28. Commodity Trading Advisor
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.
A US Federal Court
Direct or indirect advisor on buying and selling futures or commodity options.
They can accrue value as the price of the underlying stock rises.

29. FCPA (US)
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
Foreign Corrupt Practices Act
Intergovernmental Action Group against Money Laundering in Africa

30. Dormant Account
Processes transactions for merchants who accept credit cards.
The FIU of Russia
Confiscation
An account that does not show activity other than the posting of interest or account maintenance fees.

31. Credit Card Associations
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
Confiscation
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
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.

32. The 'Art Loss Register'

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

34. FATF Recommendation 6
Impose AML requirements on alternative remittance systems.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.

35. 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.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
The US State Dept issues the report annually.

36. What is one of the cental stragetic tools required for effective action against money laundering?
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
Confiscation
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.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.

37. Three stages of 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.
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.
Placement - Layering - Integration.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).

38. Why is 'refining' critical to a money launderer's efforts?
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.
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.

39. MENAFATF
Middle East and North Africa Financial Action Task Force
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.
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.
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.

40. FATF Sepcial Recommendation on Terrorist Financing -- SR Three
2% - 5% ($590B - $1.5T)
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
Freeze and confiscate terrorist assets.

41. Market Manipulation
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
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.
no regulatory power or function
The International Monetary Fund (IMF) and the world bank conduct the joint program.

42. Express Trust
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
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
Combines funds from various members and users them to trade in futures or options contracts.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)

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

44. FATF Recommendation 11
foreign correspondent banks
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.
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
disrupt or adversely afftect the business of the bank.

45. A 'panzi' scheme is named for whom?
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.
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)

46. Commodity Pool
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.
Combines funds from various members and users them to trade in futures or options contracts.
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).
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.

47. Why do convertible bonds oftern have lower interest rates than non-convertible bonds?
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.
They can accrue value as the price of the underlying stock rises.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
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]

48. Example of use of an Apostille
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
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.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
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.

49. What normal business practise makes 'Product Division' possible?
Futures contracts - forwards - swaps or options.
Firm or person that solicits and accepts commodity futures orders from customers but does not accept funds. Two types of IB_C's: Guaranteed and Independent.
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.

50. Corporate Bank