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Certified Anti Money Laundering Specialist Cams

Instructions:

Answer 50 questions in 15 minutes.
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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. 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.
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).
The world's largest private DB of stolen art.
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.

2. FATF Recommendation 39
Freeze and confiscate terrorist assets.
Countries should recognize money laundering as an extraditable offense.
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 account that does not show activity other than the posting of interest or account maintenance fees.

3. When is a jurisdiction considered to be 'ring-fenced'?
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
Middle East and North Africa Financial Action Task Force
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.

4. The Palemo Convention
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
Processes transactions for merchants who accept credit cards.

5. Counter Party
Terrorism and Terrorist Financing
The opposing part of a transaction or trade.
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
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

6. Example of use of an Apostille
Combines funds from various members and users them to trade in futures or options contracts.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
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.

7. Basel's 'CDD for Banks' states that the decision to open an account for a PEP should be taken at...
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
Countries should recognize money laundering as an extraditable offense.
The FIU of Russia
a Sr Management level

8. Commodity
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
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.
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
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.

9. FATF Sepcial Recommendation on Terrorist Financing -- SR Six
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
Processes transactions for merchants who accept credit cards.
Impose AML requirements on alternative remittance systems.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.

10. Account Monitoring Order (UK and several other countries)
Intergovernmental Action Group against Money Laundering in Africa
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.

11. What is the goal of the Egmont group?
Provide mutual legal assistance.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
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.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.

12. FATF Recommendation 33
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.
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.
EurAsian Group

13. What is a 'Trust'?
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
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.
Open and Closed system
A contractual arrangement whereby the trustee manages the property for the benefit of the beneficiary in accordance with the contractual terms set by the grantor.

14. Common types of 'Derivatives'
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
Expatriates sending money back to their home country or by other individuals sending money abroad.
Futures contracts - forwards - swaps or options.
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.

15. What normal business practise makes 'Product Division' possible?
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
It was the first law in any country to make money laundering a crime.
Person who - for compensation - provides advice on securities and investments and manages client assets.
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.

16. (Credit Card) Issuing Bank
A record that financial institutions must retain for each cash sale of bank checks - drafts - money orders - cashier's checks and traveller's checks between $3 -000 and $10 -000.
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.
If provided for money laundering to be an internationally extraditable offense.
Solicits potential customers and issues the credit cards.

17. 'Introducing Broker-Dealers in Commodities' (IB-C)
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.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)

18. FATF Recommendation 8
Money Laundering and Tax Evasion
no regulatory power or function
It was the first law in any country to make money laundering a crime.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.

19. What is the Federal Service for Financial Monitoring?
Futures contracts - forwards - swaps or options.
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'
The FIU of Russia
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.

20. FATF Recommendation 11
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 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.
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.

21. Dematerialization of Securities
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)

22. What are some of the AML dangers of casino junkets?
The world's largest private DB of stolen art.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
Open and Closed system
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.

23. FATF Recommendation 31
The FIU of the UK
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.

24. What do boiler room salespeople typically sell?
Penny Stocks
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
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.
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.

25. What is the Wolfsberg group?
No.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
It was the first law in any country to make money laundering a crime.

26. FATF Recommendation 3
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
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.

27. 'Commission Rogatoire' known in English as?
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
Review customer files and conduct random sampling of accounts.
Letters Rogatory
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.

28. Characteristics of an 'Open System Stored Value Card'
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.
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
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'.

29. OTC markets Over-The-Counter
A market is which securities are bought and sold outside of establisehd securities markets.
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
Typical mass-market banking where individual customers use local branches of larger commercial banks.

30. Basel committee's 'Customer Due Diligence for Banks' when verifying a unit's compliance with KYC policies and procedures - the home country supervisors or auditors should do what?
Review customer files and conduct random sampling of accounts.
Intergovernmental Action Group against Money Laundering in Africa
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
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'.

31. Cash Equivalent
It conducts investigations in support of a government's confiscation or seizure efforts.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.

32. Why is understanding 'Product Diversion' important to the AML investigator?
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
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.
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.

33. Examples of White-collar crime
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
An electronic quotation system that displays quotes of many securities traded over the counter.
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.

34. FATF Recommendation 29
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
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.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.

35. Abusive Squeezes
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.
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'.
Competent authorities should have powers of subpoena - search and seizure.
Solicits potential customers and issues the credit cards.

36. Mutual Fund
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
Financial Action Task Force on Money Laundering in South America
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.

37. Boiler Room
Placement - Layering - Integration.
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
Money Laundering and Tax Evasion
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.

38. FATF Recommendation 36
Provide mutual legal assistance.
A record that financial institutions must retain for each cash sale of bank checks - drafts - money orders - cashier's checks and traveller's checks between $3 -000 and $10 -000.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.

39. 'Closed-end Mutual Fund' (Or Comany)
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
While it is normally known as a Personal Investment Company (PIC) - in some jurisdictions - the international business company or exempt company is also the same.
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).

40. What were recently identified as Emerging Money Laundering risks?
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
People who help move the billions of dollars drug traffickers earn around the world.
Countries should not allow shell banks. Financial institutions should not have correspondent banking relationships with shell banks or banks that allow shell banks to do business through their accounts.
Funds transfers - Shell Corporations - Contractual Transactions.

41. FATF Recommendation 37
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
that appear to be linked
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
Reliable - independent source of documents - data or information.

42. Investment Adviser
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
Person who - for compensation - provides advice on securities and investments and manages client assets.
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
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.

43. What must a financial institution do if they have 'Exempt Accounts'?
Impose AML requirements on alternative remittance systems.
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
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.
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]

44. GAFISUD
Financial Action Task Force on Money Laundering in South America
tipped off that they are being investigated.
a Sr Management level
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.

45. FATF Recommendation 22
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.
To reduce financial crime - including money laundering and terrorit financing.
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
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.

46. FATF Recommendation 28
Open and Closed system
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
Competent authorities should have powers of subpoena - search and seizure.
The UN Convention against Transnational Organized Crime [Adopted 12/2000].

47. What does the principal US money laundering law look for before implementing its 'Extraterritorial Reach'?
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.
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.
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
Money Laundering and Tax Evasion

48. Why is 'Know Your Correspondent Bank' important?
Canada
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.
tipped off that they are being investigated.
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.

49. Where is the Art Loss Register found?
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.
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
www.artloss.com
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).

50. 'Loan Back' method. Give example of how it works.
People who help move the billions of dollars drug traffickers earn around the world.
They can accrue value as the price of the underlying stock rises.
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
A market is which securities are bought and sold outside of establisehd securities markets.

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