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. FATF Recommendation 39
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
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.
Countries should recognize money laundering as an extraditable offense.
Terrorism and Terrorist Financing

2. FATF Recommendation 29
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
Countries should recognize money laundering as an extraditable offense.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.

3. Automated Sale
Review customer files and conduct random sampling of accounts.
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.
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.
The UN Convention against Transnational Organized Crime [Adopted 12/2000].

4. Fraud
People who help move the billions of dollars drug traffickers earn around the world.
Impose AML requirements on alternative remittance systems.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
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.

5. What does a 'Commission Rogatoire' normally specify?
It conducts investigations in support of a government's confiscation or seizure efforts.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
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.
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.

6. Account Monitoring Order (UK and several other countries)
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
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.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws

7. Operational risks in KYC context relate to...
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.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
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
To reduce financial crime - including money laundering and terrorit financing.

8. Under the US Bank Secrecy Act - SAR filings are confidential and the institutions employees cannot ____?

9. Transparency International
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.
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.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
Freeze and confiscate terrorist assets.

10. EAG
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.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
Harmful or Preferrential Tax Regimes.
EurAsian Group

11. FATF Recommendation 21
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
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.
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.

12. Counter Party
Money Laundering and Tax Evasion
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.
Banking services between merchant banks and other financial institutions.
The opposing part of a transaction or trade.

13. FATF Recommendation 2
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
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
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.

14. FATF Recommendation 23
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
Middle East and North Africa Financial Action Task Force
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.
It conducts investigations in support of a government's confiscation or seizure efforts.

15. How does the Egmont group help its members?
no regulatory power or function
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 pay special attention to (and examine & document) complex - unusual large transactions - and all transactions which have no apparent economic or lawful purpose.
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.

16. FATF Recommendation 12
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
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.

17. The IMF estimates that laundered funds compromise ______ of the world's GDP
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.
2% - 5% ($590B - $1.5T)
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.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.

18. As considered by UN and OECD - these are jurisdictions that have no or low tax rates - and do not attract real business or foreign investment
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
Reliable - independent source of documents - data or information.
Harmful or Preferrential Tax Regimes.
Countering the Financing of Terrorism (Counter Terrorist Financing).

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

20. FATF's designated transactional threshold for Financial Insitutions is _____.
Combines funds from various members and users them to trade in futures or options contracts.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
2% - 5% ($590B - $1.5T)
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)

21. Margin
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
An electronic quotation system that displays quotes of many securities traded over the counter.
A fund setup by an investment trust in which the number of shares can fluctuate as investors' move in and out the fund. Share prices moves in direct proportion of the net asset value of the underlying investments (no premium or discount).

22. Why does a launderer try to run transactions through a concentration account of a financial institution?
Strengthen customer identification measures in iternational and domestic wire transfers.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
It was the first law in any country to make money laundering a crime.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.

23. Money Mules
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
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
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.
Competent authorities should have powers of subpoena - search and seizure.

24. Examples of White-collar crime
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
It conducts investigations in support of a government's confiscation or seizure efforts.
have in place compulsory currency reporting requirements.

25. Pink Sheets
tipped off that they are being investigated.
Impose AML requirements on alternative remittance systems.
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.
An electronic quotation system that displays quotes of many securities traded over the counter.

26. How does 'Product Diversion' work?
Provide mutual legal assistance.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
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.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.

27. Why do convertible bonds oftern have lower interest rates than non-convertible bonds?
It conducts investigations in support of a government's confiscation or seizure efforts.
Confiscation
They can accrue value as the price of the underlying stock rises.
As 'felonies' or 'all offenses in the criminal code'.

28. Why is 'refining' critical to a money launderer's efforts?
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
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.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.

29. 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.
Middle East and North Africa Financial Action Task Force
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.
Foreign Corrupt Practices Act

30. SRO (Self-Regulatory Organizations)
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 bank which uses the services of another bank - such as check clearing - wire transfers - etc. The bank providing the service is the 'Correspondent Bank'
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
It was the first law in any country to make money laundering a crime.

31. Futures Commission Merchant (FCM)
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].
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.
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.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.

32. Commodity
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.
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.
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.

33. Investment Adviser
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
Person who - for compensation - provides advice on securities and investments and manages client assets.
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
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.

34. Affidavit
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
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.
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
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.

35. Penny Stocks
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.
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.

36. Agent (Insurance Industry)
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 prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
Placement - Layering - Integration.

37. FATF Sepcial Recommendation on Terrorist Financing -- SR Nine
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.
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.

38. Why is 'Know Your Customer's Customer' important?
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
Processes transactions for merchants who accept credit cards.
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.

39. FATF Recommendation 10
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.

40. What are the two types of Stored Value Cards?
Open and Closed system
Person who - for compensation - provides advice on securities and investments and manages client assets.
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.
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.

41. Dematerialization of Securities

42. 'Competent Authorities' refers to _____.
a Sr Management level
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
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.

43. Who issues the Internationa Narcotics Control Strategy Report (INCSR) and how often?
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.
The US State Dept issues the report annually.
a chain-referral scheme.
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.

44. Mutual Fund
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
The FIU of the UK
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.

45. FATF Sepcial Recommendation on Terrorist Financing -- SR Eight
The US State Dept issues the report annually.
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.

46. What is the Serious Organised Crime Agency (SOCA)?
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
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 FIU of the UK

47. FATF Recommendation 19
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered 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.

48. What is the goal of the Egmont group?

49. FATF Recommendation 3
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
Stored Value Cards - Mobile Payments - Internet Payments.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.

50. FATF Recommendation 30
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
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.