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 26
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
a chain-referral scheme.
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.


2. FATF Sepcial Recommendation on Terrorist Financing -- SR Three
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
They can accrue value as the price of the underlying stock rises.
Freeze and confiscate terrorist assets.
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.


3. GIABA
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
Intergovernmental Action Group against Money Laundering in Africa
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.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).


4. Convertible Preferred
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.
Canada
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
Reliable - independent source of documents - data or information.


5. What does FIU do beyond what FIU does?

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6. FATF Recommendation 25
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.


7. Variable Annuity
Direct or indirect advisor on buying and selling futures or commodity options.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
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
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.


8. FATF Recommendation 12
disrupt or adversely afftect the business of the bank.
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
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.
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.


9. FATF Recommendation 38
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
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
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.
No.


10. FATF Recommendation 24
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
Impose AML requirements on alternative remittance systems.
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.
As 'felonies' or 'all offenses in the criminal code'.


11. FATF Recommendation 2
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
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.


12. What was the target of UN Security Council Resolution 1267?
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
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.
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization


13. UK courts view on 'Suspicion'
Money Laundering and Tax Evasion
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.
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.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.


14. Account Monitoring Order (UK and several other countries)
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
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.


15. Commodity Pool
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
Letters Rogatory
Combines funds from various members and users them to trade in futures or options contracts.


16. What is important about the US Money Laundering Control Act (MCLA)?
It was the first law in any country to make money laundering a crime.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
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).


17. Cash Log

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18. FATF Recommendation 17
a chain-referral scheme.
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]
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 have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.


19. FATF Recommendation 8
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
Freeze and confiscate terrorist assets.
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.


20. FATF Recommendation 23
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
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.


21. FATF Recommendation 37
2% - 5% ($590B - $1.5T)
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
Direct or indirect advisor on buying and selling futures or commodity options.
People who help move the billions of dollars drug traffickers earn around the world.


22. 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
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.
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 ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
Harmful or Preferrential Tax Regimes.


23. Underwriting
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
Intergovernmental Action Group against Money Laundering in Africa
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.
It conducts investigations in support of a government's confiscation or seizure efforts.


24. Abusive Squeezes

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25. CFT
Countering the Financing of Terrorism (Counter Terrorist Financing).
The world's largest private DB of stolen art.
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.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.


26. Legal Arrangements (Insurance Industry)
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 order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
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]
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.


27. Wholesale Banking
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
Banking services between merchant banks and other financial institutions.
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
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.


28. What the primary objectives of Offshore Group of Banking Supervisors?
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
The FIU of the UK
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.


29. What does a 'Commission Rogatoire' normally specify?
A US Federal Court
The world's largest private DB of stolen art.
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.
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.


30. FATF's designated transactional threshold for Financial Insitutions is _____.
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
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).
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.


31. A 'Cash Letter' can also be referred to as _____.
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.
Pouch activity.
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.


32. Cash Equivalent

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33. FATF Recommendation 20
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
The world's largest private DB of stolen art.


34. Corporate Bank

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35. What is the goal of FSAP?
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.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.


36. In general terms - EDD requires what of a financial institution?

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37. FATF Sepcial Recommendation on Terrorist Financing -- SR Five

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38. The 'Art Loss Register'

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39. Portfolio Manager
that appear to be linked
A US Federal Court
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.
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.


40. Retail Banking
Typical mass-market banking where individual customers use local branches of larger commercial banks.
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 ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.


41. FATF Recommendation 22

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42. What are included in the Wolfsberg AML Principles on Private Banking?
a chain-referral scheme.
As 'felonies' or 'all offenses in the criminal code'.
Reliable - independent source of documents - data or information.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.


43. FATF Recommendation 29
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
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.


44. Investigative Log
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.


45. A pyramid scheme is also called...
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]
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
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
a chain-referral scheme.


46. 'Closed-end Mutual Fund' (Or Comany)

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47. 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...
that appear to be linked
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.
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.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.


48. How does the Egmont group help its members?
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.
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'
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.
Reliable - independent source of documents - data or information.


49. Open System Stored Value Card
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 prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
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.


50. Why is 'Know Your Correspondent Bank' important?
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.
Intergovernmental Action Group against Money Laundering in Africa
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
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.