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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. Mutual Fund
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.
The US State Dept issues the report annually.
Quite simply - a plan. While in the US - this term is often associated with a nefarious plan - it should NOT be assumed to be evil - especially as it may appear on the ACAMS exam.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.

2. Why is a 'money order' attractive to a money launderer?
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
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.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.

3. Penny Stocks
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 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.
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
Pouch activity.

4. Automated Sale
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.
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
The FIU of Russia

5. Agent (Insurance Industry)
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
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
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.

6. How do 'Hedge Funds' operate?

7. What was the target of UN Security Council Resolution 1373?
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.
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.
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
Terrorism and Terrorist Financing

8. FATF Recommendation 18
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
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.
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.

9. What must a financial institution do if they have 'Exempt Accounts'?
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.

10. FATF Recommendation 8
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)

11. The Palemo Convention
No.
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.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
The UN Convention against Transnational Organized Crime [Adopted 12/2000].

12. OCC Office of the Comptroller of the Currency
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
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.
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.

13. FATF Recommendation 26
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.

14. FATF Sepcial Recommendation on Terrorist Financing -- SR Nine
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.
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.
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.

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

16. (Credit Card) Third-Party processor
The FIU of the UK
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
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.
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.

17. Legal Arrangements (Insurance Industry)
Expatriates sending money back to their home country or by other individuals sending money abroad.
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
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.
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]

18. FATF Recommendation 7

19. What is a 'Trust'?
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
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.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws

20. A 'panzi' scheme is named for whom?
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.
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.
They can accrue value as the price of the underlying stock rises.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws

21. Portfolio Manager
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.
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
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'
Processes transactions for merchants who accept credit cards.

22. Moneyval
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).
It conducts investigations in support of a government's confiscation or seizure efforts.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
Placement - Layering - Integration.

23. Free Look Period
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.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)

24. White-Collar crime

25. Cash Equivalent

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

27. FCPA (US)
Confiscation
Foreign Corrupt Practices Act
Solicits potential customers and issues the credit cards.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.

28. What are some of the AML dangers of casino junkets?
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.
Futures contracts - forwards - swaps or options.
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.
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

29. Cash Log

30. FATF Recommendation 33
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
Terrorism and Terrorist Financing
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 the beneficial ownership and control of legal persons.

31. What does an Extradition Treaty specify?
Futures contracts - forwards - swaps or options.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
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.
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.

32. Affidavit
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
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.
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.
Report suspicious transactions linked to terrorism.

33. Account Monitoring Order (UK and several other countries)
To reduce financial crime - including money laundering and terrorit financing.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
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.

34. What are the three main functions of a 'Transfer Agent'?
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
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.
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]

35. FATF Recommendation 4
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.
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.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.

36. 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.

37. What is meant by 'Know Your Customer's customer'?
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
Strengthen customer identification measures in iternational and domestic wire transfers.

38. What is the significance of 'Non-Financial Trades and Businesses' in realtion to Money Laundering?
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
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.
EurAsian Group
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.

39. GIABA
Intergovernmental Action Group against Money Laundering in Africa
A market is which securities are bought and sold outside of establisehd securities markets.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.

40. 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.
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.
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.

41. May a shell bank maintain a correspondent account with a US bank?
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
No.
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.
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.

42. FATF Recommendation 24
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.

43. 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
Harmful or Preferrential Tax Regimes.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
EurAsian Group
Penny Stocks

44. Commodity Pool
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.
Combines funds from various members and users them to trade in futures or options contracts.
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 opposing part of a transaction or trade.

45. What do 'Hedge Funds' attempt to do?
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
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.
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.

46. How are 'Predicate Crimes' sometimes identified?

47. UK courts view on 'Suspicion'
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.
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
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.
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.

48. What was the target of UN Security Council Resolution 1267?
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.

49. In Emerging Money Laundering Risks - what 3 methods are identified as 'Funds Transfers'?
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
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.
Stored Value Cards - Mobile Payments - Internet Payments.
If provided for money laundering to be an internationally extraditable offense.

50. Many jurisdictions have legislation to ensure that suspects are not ____?
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.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
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.
tipped off that they are being investigated.