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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. What does Financial Sector AssessmentProgram (FSAP) do?
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
Provide mutual legal assistance.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.
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]

2. Convertible Preferred
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
Impose AML requirements on alternative remittance systems.
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.

3. A pyramid scheme is also called...
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
FATF principles should apply to all branches and subsidiaries of a financial institution - even those abroad. Inability to do should re reported to parent institution's regulatory/supervisory authority.
a chain-referral scheme.

4. What are the two types of Stored Value Cards?
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
Open and Closed system
Financial Action Task Force on Money Laundering in South America
The UN Convention against Transnational Organized Crime [Adopted 12/2000].

5. What was the target of UN Security Council Resolution 1373?
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
Terrorism and Terrorist Financing
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.

6. Arrest Warrant
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.
A market is which securities are bought and sold outside of establisehd securities markets.
Intergovernmental Action Group against Money Laundering in Africa
No.

7. GAFISUD
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
Financial Action Task Force on Money Laundering in South America

8. Pink Sheets
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.
An electronic quotation system that displays quotes of many securities traded over the counter.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
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).

9. Commodity Trading Advisor
The International Monetary Fund (IMF) and the world bank conduct the joint program.
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
Direct or indirect advisor on buying and selling futures or commodity 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.

10. Abusive Squeezes

11. Examples of VSP's
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
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.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.

12. Money Mules
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.
No.
Money Laundering and Tax Evasion
Provide mutual legal assistance.

13. What were recently identified as Emerging Money Laundering risks?
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.
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.
Funds transfers - Shell Corporations - Contractual Transactions.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.

14. Scheme
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.
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.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.

15. Underwriting
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
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.
Processes transactions for merchants who accept credit cards.
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.

16. FATF Recommendation 37
As 'felonies' or 'all offenses in the criminal code'.
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
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.
Corporate bond that includes an option for the holder to convert it into other securities after a specified period at the discretion of the bondholder.

17. FATF Recommendation 29
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.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
a chain-referral scheme.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.

18. FATF Recommendation 35
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
FATF principles should apply to all branches and subsidiaries of a financial institution - even those abroad. Inability to do should re reported to parent institution's regulatory/supervisory authority.
The world's largest private DB of stolen art.
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.

19. Agent (Insurance Industry)
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
Take immediate steps to ratify and implement the UN instruments.
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
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.

20. (Credit card) Acquiring Bank
Competent authorities should have powers of subpoena - search and seizure.
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.
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
Processes transactions for merchants who accept credit cards.

21. 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.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
Confiscation
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.

22. Many jurisdictions have legislation to ensure that suspects are not ____?
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
a Sr Management level
tipped off that they are being investigated.

23. FATF Recommendation 9
Banking services between merchant banks and other financial institutions.
It was the first law in any country to make money laundering a crime.
Placement - Layering - Integration.
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.

24. FATF Recommendation 28
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.
Competent authorities should have powers of subpoena - search and seizure.
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.
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.

25. Examples of White-collar crime
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.
To reduce financial crime - including money laundering and terrorit financing.
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)

26. FCPA (US)
EurAsian Group
Foreign Corrupt Practices Act
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.

27. What is the Wolfsberg group?
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 association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
People who help move the billions of dollars drug traffickers earn around the world.

28. FATF Sepcial Recommendation on Terrorist Financing -- SR Three
Freeze and confiscate terrorist assets.
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
As 'felonies' or 'all offenses in the criminal code'.
Report suspicious transactions linked to terrorism.

29. Express Trust
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
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.
Report suspicious transactions linked to terrorism.

30. Respondent Bank

31. What is a Private Investment company (PIC)?
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
that appear to be linked
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
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.

32. Who appoints a 'Federal Receiver' (US)?
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
Money Laundering and Tax Evasion
A US Federal Court
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.

33. Why is 'refining' critical to a money launderer's efforts?
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
Confiscation
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.

34. What do boiler room salespeople typically sell?
As a financial institution service that is very vulnerable to money laundering.
An account that does not show activity other than the posting of interest or account maintenance fees.
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.
Penny Stocks

35. Why is 'Know Your Customer's Customer' important?
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.
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.

36. 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.
A market is which securities are bought and sold outside of establisehd securities markets.
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.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.

37. What does an Extradition Treaty specify?
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 terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
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
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.

38. Portfolio Manager
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 grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
Financial Action Task Force on Money Laundering in South America
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.

39. 'Commission Rogatoire' known in English as?
Combines funds from various members and users them to trade in futures or options contracts.
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.
Letters Rogatory
no regulatory power or function

40. FATF Recommendation 39
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
Countries should recognize money laundering as an extraditable offense.
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.
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.

41. Vital Service Providers (VSPs)
People who help move the billions of dollars drug traffickers earn around the world.
Intergovernmental Action Group against Money Laundering in Africa
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.
They can accrue value as the price of the underlying stock rises.

42. What are included in the Wolfsberg AML Principles on Private Banking?
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
As 'felonies' or 'all offenses in the criminal code'.

43. FATF Recommendation 17
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
Financial Action Task Force on Money Laundering in South America
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.

44. Downstream Correspondent Clearer
Financial Action Task Force on Money Laundering in South America
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
A Correspondent Banking Client who receives Corresponding Banking services from an institution and itself provides Correspondent Banking services to other financial institutions in the same currency as the account it maintains with the institution.

45. What is the primary use of a 'Mutual Legal Assistance Treaty'?
Financial Action Task Force on Money Laundering in South America
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
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.

46. Investigative Log
Open and Closed system
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
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).

47. Fraud
An account that does not show activity other than the posting of interest or account maintenance fees.
A market is which securities are bought and sold outside of establisehd securities markets.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.

48. Foriegn Shell Banks are vehicles for ______ & ______?
foreign correspondent banks
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.
Money Laundering and Tax Evasion

49. Short Sale

50. Boiler Room
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.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.