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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.
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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 was the target of UN Security Council Resolution 1267?
No.
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
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).

2. What is important about the US Money Laundering Control Act (MCLA)?
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.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
It was the first law in any country to make money laundering a crime.

3. FATF Recommendation 4
To reduce financial crime - including money laundering and terrorit financing.
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.
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.

4. What is meant by 'Know Your Customer's customer'?
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
The opposing part of a transaction or trade.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
Typical mass-market banking where individual customers use local branches of larger commercial banks.

5. FATF Recommendations examples of non-financial businesses and professions
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.
have in place compulsory currency reporting requirements.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)

6. Dematerialization of Securities
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
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

7. What tend to be the markings of Private Banking transactions?
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
www.artloss.com
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.
Financial Action Task Force

8. How is 'Identity theft' often accomplished?
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.
tipped off that they are being investigated.
Dealers in precious metals/stones - trust and company services providers - lawyers - notaries and accountants should all be required to report suspicious activity - but legal privilege cannot be violated.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.

9. FATF Recommendation 2
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.
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).
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
Person who - for compensation - provides advice on securities and investments and manages client assets.

10. What are the two types of Stored Value Cards?
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
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
Open and Closed system

11. FATF Recommendation 18
a Sr Management level
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.
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
foreign correspondent banks

12. What do boiler room salespeople typically sell?
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.
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
Penny Stocks
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.

13. What is one of the cental stragetic tools required for effective action against money laundering?
Solicits potential customers and issues the credit cards.
Confiscation
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
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.

14. Identification data
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.
Reliable - independent source of documents - data or information.
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.

15. Credit Card Associations
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
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.
The International Monetary Fund (IMF) and the world bank conduct the joint program.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.

16. EAG
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).
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
The FIU of the UK
EurAsian Group

17. What is one of the Financial Service Authority's (UK) tasks?
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
To reduce financial crime - including money laundering and terrorit financing.
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.
bear the mark 'APOSTILLE'

18. FATF Recommendation 10
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
Provide mutual legal assistance.

19. FATF Recommendation 32
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
Funds transfers - Shell Corporations - Contractual Transactions.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
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.

20. FATF Recommendation 35
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 take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.

21. What must a financial institution do if they have 'Exempt Accounts'?
A degree of satisfaction not necessarily amounting to belief but extending beyond specualtionas to whether an event has occured or not. Though suspicion requires a lesser factual basis than a belief - it must be built upon some foundation.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
To reduce financial crime - including money laundering and terrorit financing.

22. How do most governments view Private Banking?
have in place compulsory currency reporting requirements.
As a financial institution service that is very vulnerable to money laundering.
Person who - for compensation - provides advice on securities and investments and manages client assets.
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.

23. UK courts view on 'Suspicion'
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.
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.

24. Who appear to be predominant users of hawalas and other alternative remittance systems?
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.
Expatriates sending money back to their home country or by other individuals sending money abroad.
The possibility that lawsuits adverse judgements or contracts that turn out to be unenforceable can disrupt or adversely affect the operatinos or condition of a financial siutation.
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.

25. FATF Recommendation 21
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
no regulatory power or function
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.

26. 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.
It was the first law in any country to make money laundering a crime.
a Sr Management level
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.

27. What is the Federal Service for Financial Monitoring?
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
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.
The FIU of Russia
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.

28. 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...
A market is which securities are bought and sold outside of establisehd securities markets.
The world's largest private DB of stolen art.
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.
foreign correspondent banks

29. Penny Stocks
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.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
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.
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.

30. Many jurisdictions have legislation to ensure that suspects are not ____?
Dealers in precious metals/stones - trust and company services providers - lawyers - notaries and accountants should all be required to report suspicious activity - but legal privilege cannot be violated.
tipped off that they are being investigated.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
Middle East and North Africa Financial Action Task Force

31. A notary can issue a Apostille but it must be in a country that signed The Hague Convention (1961) and it must ___________. If the notary doesn't understand - find another one.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
bear the mark 'APOSTILLE'
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.

32. Reverse Flip
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.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
A co-operative property seller agrees to sell home at a well-below market reported price - then accepts the difference 'under the table'. When launderer later sells house - he recognizes 'gain' and all funds appear legitimate as it sold at market.
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).

33. Examples of VSP's
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
Solicits potential customers and issues the credit cards.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.

34. Should one ever file a Suspicious Transaction Report (STR/SAR) based on a person's profile?
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
have in place compulsory currency reporting requirements.
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.
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization

35. What is private investment company also known as?
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
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.
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'.

36. 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
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
Harmful or Preferrential Tax Regimes.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.

37. MENAFATF
Middle East and North Africa Financial Action Task Force
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.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
a Sr Management level

38. What was the effect of the 1988 Vienna Convention as it relates to extradtition?
As 'felonies' or 'all offenses in the criminal code'.
If provided for money laundering to be an internationally extraditable offense.
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.
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.

39. FATF Recommendation 30
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
It was the first law in any country to make money laundering a crime.

40. In general terms - EDD requires what of a financial institution?
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.
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.
Solicits potential customers and issues the credit cards.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.

41. FATF Sepcial Recommendation on Terrorist Financing -- SR Nine
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
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
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.

42. FATF Sepcial Recommendation on Terrorist Financing -- SR Two
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
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).
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)

43. 'Kiting' via credit card
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.
Canada
EurAsian Group
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.

44. (Stock) Warrants
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.
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.
Futures contracts - forwards - swaps or options.
Typical mass-market banking where individual customers use local branches of larger commercial banks.

45. FATF Sepcial Recommendation on Terrorist Financing -- SR Eight
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.
Expatriates sending money back to their home country or by other individuals sending money abroad.
Placement - Layering - Integration.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.

46. Investigative Log
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
The opposing part of a transaction or trade.
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.

47. Dormant Account
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
An account that does not show activity other than the posting of interest or account maintenance fees.
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.
Direct or indirect advisor on buying and selling futures or commodity options.

48. 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.
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].
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.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.

49. According to FATF - financial transactions above a designated threshold may include situations where the transaction takes place in a single operation or in several operations...
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
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
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
that appear to be linked

50. Fraud
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.
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.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.

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