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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. In Emerging Money Laundering Risks - what 3 methods are identified as 'Funds Transfers'?
Stored Value Cards - Mobile Payments - Internet Payments.
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
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).

2. Why does a launderer try to run transactions through a concentration account of a financial institution?
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
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.
Open and Closed system

3. FATF Recommendation 20
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.

4. Basel's 'CDD for Banks' states that the decision to open an account for a PEP should be taken at...
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.
Typical mass-market banking where individual customers use local branches of larger commercial banks.
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
a Sr Management level

5. Credit Card Associations
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.

6. FATF Sepcial Recommendation on Terrorist Financing -- SR Nine
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
disrupt or adversely afftect the business of the bank.

7. FATF Recommendation 17
Provide mutual legal assistance.
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
Freeze and confiscate terrorist assets.

8. FATF Recommendation 30
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.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
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.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.

9. White-Collar crime

10. What do boiler room salespeople typically do?

11. Who issues the Internationa Narcotics Control Strategy Report (INCSR) and how often?
Pouch activity.
The US State Dept issues the report annually.
Letters Rogatory
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.

12. May a shell bank maintain a correspondent account with a US bank?
A market is which securities are bought and sold outside of establisehd securities markets.
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.
No.
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.

13. What is a Private Investment company (PIC)?
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
a Sr Management level
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.

14. Why is understanding 'Product Diversion' important to the AML investigator?
that appear to be linked
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
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.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.

15. 'Open-end Mutual Fund' (or Company)

16. FATF Recommendation 16
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.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
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.
Provide mutual legal assistance.

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

18. 'Kiting' via credit card
A professional responsible for the securities portfolio of an individual or institutional investor. In return for a fee - the manager has the responsibility of choosing and managing assets.
The US State Dept issues the report annually.
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.

19. FATF Recommendation 31
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.
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
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.

20. Counter Party
The opposing part of a transaction or trade.
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.
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.
The FIU of the UK

21. Vital Service Providers (VSPs)
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
People who help move the billions of dollars drug traffickers earn around the world.

22. Penny Stocks
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.
bear the mark 'APOSTILLE'
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
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.

23. FATF Recommendation 38
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
Take expeditious action to requests by foreign countries to identify - freeze - seize and confiscate property that is proceeds of money laundering or a predicate crime.
Reliable - independent source of documents - data or information.

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

25. Examples of VSP's
2% - 5% ($590B - $1.5T)
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
foreign correspondent banks

26. FATF's designated transactional threshold for Casinos (including Internet Casinos) is _____.
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.
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.
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Penny Stocks

27. Who appear to be predominant users of hawalas and other alternative remittance systems?
Expatriates sending money back to their home country or by other individuals sending money abroad.
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
As 'felonies' or 'all offenses in the criminal code'.
To reduce financial crime - including money laundering and terrorit financing.

28. FATF Recommendation 12
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
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.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.

29. Three stages of money laundering
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.
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
Placement - Layering - Integration.
Solicits potential customers and issues the credit cards.

30. What is a Financial Intelligence Unit?
Provide mutual legal assistance.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
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.
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.

31. What does the 'SEC' (US Securities and Exchange Commission) do?
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.
a Sr Management level
bear the mark 'APOSTILLE'
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.

32. What tend to be the markings of Private Banking transactions?
tipped off that they are being investigated.
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
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

33. FATF Recommendation 40
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.

34. FATF Recommendation 24
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.
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.
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.

35. Distribution Channels (Insurance Industry)
The means through which the insurance products and services are provided to a customer [FATF Risk-Based approach - Guidance for the Life Insurance Sector - Oct 09]
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
People who help move the billions of dollars drug traffickers earn around the world.

36. FATF Sepcial Recommendation on Terrorist Financing -- SR Four
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.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
Report suspicious transactions linked to terrorism.
Penny Stocks

37. FATF Recommendation 3
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.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.

38. CFT
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
Countering the Financing of Terrorism (Counter Terrorist Financing).
a chain-referral scheme.
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.

39. What does the principal US money laundering law look for before implementing its 'Extraterritorial Reach'?
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
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
disrupt or adversely afftect the business of the bank.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.

40. What does theInternationa Narcotics Control Strategy Report (INCSR) entail?
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.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.
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.

41. 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
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.

42. How does 'Product Diversion' work?
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
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.
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
Funds transfers - Shell Corporations - Contractual Transactions.

43. Convertible Preferred
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]
Provide mutual legal assistance.
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.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.

44. Variable Annuity
www.artloss.com
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
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.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.

45. FATF Recommendation 36
Provide mutual legal assistance.
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.
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.
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.

46. What are the three main functions of a 'Transfer Agent'?
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
The right - but not the obligation - to buy or sell a set amount of something - such as a share or commodity - at a set price after a set expiration date.
Person who - for compensation - provides advice on securities and investments and manages client assets.
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.

47. What was the effect of the 1988 Vienna Convention as it relates to extradtition?
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.
If provided for money laundering to be an internationally extraditable offense.
People who help move the billions of dollars drug traffickers earn around the world.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.

48. Commodity Trading Advisor
The opposing part of a transaction or trade.
Direct or indirect advisor on buying and selling futures or commodity options.
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.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.

49. In what country is the Egmont Group Secretariat now located?
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).
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.
Canada
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.

50. The IMF estimates that laundered funds compromise ______ of the world's GDP
2% - 5% ($590B - $1.5T)
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
The opposing part of a transaction or trade.
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.