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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. Wholesale Banking
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
Banking services between merchant banks and other financial institutions.
The FIU of Russia
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.

2. Who appoints a 'Federal Receiver' (US)?
A US Federal Court
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.
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
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.

3. How does 'Product Diversion' work?
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
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.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
The opposing part of a transaction or trade.

4. EAG
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.
EurAsian Group
Processes transactions for merchants who accept credit cards.
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]

5. Transparency International
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
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.
The FIU of Russia
Letters Rogatory

6. Counter Party
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
The opposing part of a transaction or trade.

7. What is the Federal Service for Financial Monitoring?
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
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 FIU of Russia
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.

8. Cash Equivalent

9. How is 'Identity theft' often accomplished?
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.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
An account that does not show activity other than the posting of interest or account maintenance fees.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.

10. Underwriting
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.
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.
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.
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).

11. Moneyval
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
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.
Middle East and North Africa Financial Action Task Force
It conducts investigations in support of a government's confiscation or seizure efforts.

12. FATF Sepcial Recommendation on Terrorist Financing -- SR Seven
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.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
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.
Strengthen customer identification measures in iternational and domestic wire transfers.

13. Common types of 'Derivatives'
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
that appear to be linked
Futures contracts - forwards - swaps or options.

14. FATF Recommendation 12
Direct or indirect advisor on buying and selling futures or commodity options.
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
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.
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.

15. Commodity Pool
Direct or indirect advisor on buying and selling futures or commodity options.
Combines funds from various members and users them to trade in futures or options contracts.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
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.

16. FATF Recommendation 29
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.
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.
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]

17. FATF Recommendation 2
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
The right - but not the obligation - to buy or sell a set amount of something - such as a share or commodity - at a set price after a set expiration date.

18. Who conducts the Financial Sector Assessment Program (FSAP)?
The International Monetary Fund (IMF) and the world bank conduct the joint program.
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.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.

19. What does theInternationa Narcotics Control Strategy Report (INCSR) entail?
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
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 ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.

20. FATF Recommendation 3
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.

21. What is private investment company also known as?
EurAsian Group
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Solicits potential customers and issues the credit cards.
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.

22. What does a 'Commission Rogatoire' normally specify?
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
The nature of the request - the relevant criminal charges in the requesting country - the legal provision under which the request is made - and the information that is sought.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
Confiscation

23. FATF Sepcial Recommendation on Terrorist Financing -- SR Four
EurAsian Group
Letters Rogatory
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
Report suspicious transactions linked to terrorism.

24. When is a jurisdiction considered to be 'ring-fenced'?
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
EurAsian Group
A market is which securities are bought and sold outside of establisehd securities markets.
People who help move the billions of dollars drug traffickers earn around the world.

25. What can result from on institution's disregard for the Basel Due Diligence Principle?
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
The FIU of the UK
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.
Provide mutual legal assistance.

26. How are 'Predicate Crimes' sometimes identified?

27. The Vienns Convention
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.

28. Legal Arrangements (Insurance Industry)
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]
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.
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
The world's largest private DB of stolen art.

29. FATF Recommendation 40
The International Monetary Fund (IMF) and the world bank conduct the joint program.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
A US Federal Court
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.

30. Examples of VSP's
Report suspicious transactions linked to terrorism.
An account that does not show activity other than the posting of interest or account maintenance fees.
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.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.

31. What is the goal of the Egmont group?

32. 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.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data

33. Investigative Log
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
Combines funds from various members and users them to trade in futures or options contracts.
Direct or indirect advisor on buying and selling futures or commodity options.

34. Retail Banking
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.
Typical mass-market banking where individual customers use local branches of larger commercial banks.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.

35. Arrest Warrant
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.
Reliable - independent source of documents - data or information.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
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.

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

37. Portfolio Manager
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
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.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.

38. FATF Recommendation 4
that appear to be linked
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.

39. Options/Options Contract
Canada
An account that does not show activity other than the posting of interest or account maintenance fees.
Typical mass-market banking where individual customers use local branches of larger commercial banks.
The right - but not the obligation - to buy or sell a set amount of something - such as a share or commodity - at a set price after a set expiration date.

40. The Joint Money Laundering Steering Group (UK) has published a series of AML Guidance Notes for different sectors of the financial community. But - As a group of trade associations - it has...
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
no regulatory power or function
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.

41. (Stock) Warrants
The US State Dept issues the report annually.
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.
Money Laundering and Tax Evasion
It conducts investigations in support of a government's confiscation or seizure efforts.

42. What the primary objectives of Offshore Group of Banking Supervisors?
To promote the effective supervision of banks in their jurisdictions; to further international cooperation in the supervision between the Offshore Banking Supervisors - and with Basel committee member nations and other banking supervisors.
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
Competent authorities should have powers of subpoena - search and seizure.
Money Laundering and Tax Evasion

43. Examples of White-collar crime
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).
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.

44. FATF Recommendation 39
Countries should recognize money laundering as an extraditable offense.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
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.

45. Who appear to be predominant users of hawalas and other alternative remittance systems?
To reduce financial crime - including money laundering and terrorit financing.
The world's largest private DB of stolen art.
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.
Expatriates sending money back to their home country or by other individuals sending money abroad.

46. What was the effect of the 1988 Vienna Convention as it relates to extradtition?
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.
Financial Action Task Force on Money Laundering in South America
Person who - for compensation - provides advice on securities and investments and manages client assets.
If provided for money laundering to be an internationally extraditable offense.

47. Who issues the Internationa Narcotics Control Strategy Report (INCSR) and how often?
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.
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'.
The US State Dept issues the report annually.
Provide mutual legal assistance.

48. Free Look Period
foreign correspondent banks
that appear to be linked
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.

49. 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...
foreign correspondent banks
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)
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).

50. CFT
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 contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
Countering the Financing of Terrorism (Counter Terrorist Financing).
bear the mark 'APOSTILLE'