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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. FATF Recommendation 30
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
Provide mutual legal assistance.

2. Dematerialization of Securities

3. What criterion does the US need to enforce its 'Extraterritorial Reach'?

4. FATF Recommendation 33
tipped off that they are being investigated.
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
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.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)

5. Convertible Bond
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
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.
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.

6. What tend to be the markings of Private Banking transactions?
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.
2% - 5% ($590B - $1.5T)
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
Provide mutual legal assistance.

7. Why do companies export their goods at prices far below those in their home country?
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
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]
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.

8. Examples of White-collar crime
Financial Action Task Force
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.
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
Person who - for compensation - provides advice on securities and investments and manages client assets.

9. FATF Recommendation 28
Competent authorities should have powers of subpoena - search and seizure.
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.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).

10. What is the Serious Organised Crime Agency (SOCA)?
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
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.
Review customer files and conduct random sampling of accounts.
The FIU of the UK

11. FATF Recommendation 6
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.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
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.

12. Fraud
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.
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 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.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.

13. What must a financial institution do if they have 'Exempt Accounts'?
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
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 exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.

14. FATF Recommendation 37
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
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.
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.

15. Abusive Squeezes

16. How is 'Identity theft' often accomplished?
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
2% - 5% ($590B - $1.5T)
Middle East and North Africa Financial Action Task Force
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.

17. How do most governments view Private Banking?
As a financial institution service that is very vulnerable to money laundering.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
Combines funds from various members and users them to trade in futures or options contracts.
Money Laundering and Tax Evasion

18. Dormant Account
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
An account that does not show activity other than the posting of interest or account maintenance fees.

19. FATF Sepcial Recommendation on Terrorist Financing -- SR Two
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
The sale of a stock that the investor does not own. To do so - a securities intermediary 'loans' the stock to the investor - which comes from the intermediary's own inventory - another client's margin account or another intermediary.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.

20. The Palemo Convention
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
Solicits potential customers and issues the credit cards.
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
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.

21. FATF Recommendation 11
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
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.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.

22. What does a 'Commission Rogatoire' normally specify?
The nature of the request - the relevant criminal charges in the requesting country - the legal provision under which the request is made - and the information that is sought.
The 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.
It conducts investigations in support of a government's confiscation or seizure efforts.
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.

23. The Vienns Convention
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
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.
Terrorism and Terrorist Financing
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].

24. 'Coucil of Europe Convention on Laundering - Search - Seizure and Confiscation of the Proceeds from Crime' is known for what?
www.artloss.com
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].
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.
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.

25. FATF Recommendation 13
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.
They can accrue value as the price of the underlying stock rises.
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.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.

26. How does 'Product Diversion' work?
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.
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.

27. 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.

28. GIABA
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.
Intergovernmental Action Group against Money Laundering in Africa
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.

29. FATF Sepcial Recommendation on Terrorist Financing -- SR Eight
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.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
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.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.

30. FATF's designated transactional threshold for Financial Insitutions is _____.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)

31. What are some of the AML dangers of casino junkets?
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
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.
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.

32. Agent (Insurance Industry)
Middle East and North Africa Financial Action Task Force
They can accrue value as the price of the underlying stock rises.
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 institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.

33. SRO (Self-Regulatory Organizations)
Represents a profession and is made up of member professionals; has a role in regulating the persons who are qualified to enter and who practise the profession; performs cetain supervisory or monitoring type function.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
Confiscation

34. FATF Recommendation 5
Foreign Corrupt Practices Act
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
Reliable - independent source of documents - data or information.

35. FATF Sepcial Recommendation on Terrorist Financing -- SR Six
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.
Impose AML requirements on alternative remittance systems.
Expanding/Systemising the exchange of financial intelligence - improving expertise/capabilities of their personnel - fostering better communication by applying new technologies and sharing financial crimes investigations information.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.

36. FATF Recommendation 17
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
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]
It was the first law in any country to make money laundering a crime.
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.

37. Who appoints a 'Federal Receiver' (US)?
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.
Money Laundering and Tax Evasion
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
A US Federal Court

38. What are the two types of Stored Value Cards?
Open and Closed system
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
No.

39. Basel committee's 'Customer Due Diligence for Banks' when verifying a unit's compliance with KYC policies and procedures - the home country supervisors or auditors should do what?
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.
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
Review customer files and conduct random sampling of accounts.
Financial institutions may rely upon intermediaries to perform certain CDD elements provided the intermediary is supervised and regulated. However - ultimate responsibility remains with the financial institution.

40. Why is 'Know Your Customer's Customer' important?
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.
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.
Competent authorities should have powers of subpoena - search and seizure.
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.

41. Portfolio Manager
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 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.
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
An electronic quotation system that displays quotes of many securities traded over the counter.

42. In what country is the Egmont Group Secretariat now located?
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]
Canada
Placement - Layering - Integration.
that appear to be linked

43. Downstream Correspondent Clearer
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 prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
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 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).

44. Why is a 'money order' attractive to a money launderer?
Canada
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
Processes transactions for merchants who accept credit cards.

45. 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.
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.
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
Solicits potential customers and issues the credit cards.

46. In Emerging Money Laundering Risks - what 3 methods are identified as 'Funds Transfers'?
Stored Value Cards - Mobile Payments - Internet Payments.
As a financial institution service that is very vulnerable to money laundering.
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]
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.

47. Vital Service Providers (VSPs)
People who help move the billions of dollars drug traffickers earn around the world.
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.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].

48. FATF Recommendation 10
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
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.
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
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.

49. FATF Recommendation 4
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 ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.

50. FATF Recommendation 20
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
Terrorism and Terrorist Financing
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.