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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. (Credit Card) Issuing Bank
Futures contracts - forwards - swaps or options.
Solicits potential customers and issues the credit cards.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.

2. 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.
Strengthen customer identification measures in iternational and domestic wire transfers.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.

3. What is the Federal Service for Financial Monitoring?
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.
no regulatory power or function
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.
The FIU of Russia

4. FATF Recommendation 29
Urge investors to buy 'house stocks' - stocks that the firm buys and sells as a market maker or has in its inventory. Oftentimes - they are running a 'pump-and-dumo' scheme.
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.
A US Federal Court
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.

5. Guaranteed Introducing Broker

6. FATF Recommendation 16
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
Terrorism and Terrorist Financing
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.
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.

7. OTC markets Over-The-Counter
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
A market is which securities are bought and sold outside of establisehd securities markets.
Financial Action Task Force
Harmful or Preferrential Tax Regimes.

8. Where is the Art Loss Register found?
Financial Action Task Force on Money Laundering in South America
www.artloss.com
An electronic quotation system that displays quotes of many securities traded over the counter.
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.

9. Arrest Warrant
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.
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.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
Banking services between merchant banks and other financial institutions.

10. Why do companies export their goods at prices far below those in their home country?
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.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
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).

11. 'Introducing Broker-Dealers in Commodities' (IB-C)

12. FATF Recommendation 19
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 have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
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.
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.

13. Moneyval
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.

14. FATF Sepcial Recommendation on Terrorist Financing -- SR Four
Report suspicious transactions linked to terrorism.
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.
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.
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.

15. FATF Recommendation 8
A market is which securities are bought and sold outside of establisehd securities markets.
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.
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.

16. FATF Recommendation 7

17. FATF Recommendation 15
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
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.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.

18. What are included in the Wolfsberg AML Principles on Private Banking?
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
disrupt or adversely afftect the business of the bank.

19. In Emerging Money Laundering Risks - what 3 areas are associated with 'Contractual Transactions'?
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
The International Monetary Fund (IMF) and the world bank conduct the joint program.
Type of foreign bank that is incorporated in the host country but is considered to be owned by a foreign parent bank. It only needs to operarted under the host country's regulations.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.

20. How do most governments view Private Banking?
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
As a financial institution service that is very vulnerable to money laundering.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.

21. FATF Recommendation 34
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.

22. FATF Recommendation 9
Futures contracts - forwards - swaps or options.
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.
Penny Stocks
Impose AML requirements on alternative remittance systems.

23. FATF Recommendation 26
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
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.
Typical mass-market banking where individual customers use local branches of larger commercial banks.
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

24. May a shell bank maintain a correspondent account with a US bank?
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.
No.
Typical mass-market banking where individual customers use local branches of larger commercial banks.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.

25. FATF Recommendation 11
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
Foreign Corrupt Practices Act
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.

26. Bust-out
Funds transfers - Shell Corporations - Contractual Transactions.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
Letters Rogatory
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.

27. The IMF estimates that laundered funds compromise ______ of the world's GDP
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
A US Federal Court
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.

28. FATF Sepcial Recommendation on Terrorist Financing -- SR Two
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
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.
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
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.

29. The USA Patriot Act enacted a number of statutory provisions that bear directly on the procedures US financial institutions must follow in connection with their...
foreign correspondent banks
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).
Refers to dishonest broker-dealers who set up a group of high pressure salespeople who use banks of telephones to make cold calls to as many potential investors as possible.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.

30. Fraud
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
Countries should 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 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.
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.

31. OCC Office of the Comptroller of the Currency
Financial Action Task Force
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.

32. Commodity Pool
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.
Combines funds from various members and users them to trade in futures or options contracts.
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.

33. Options/Options Contract
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 federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
Intergovernmental Action Group against Money Laundering in Africa

34. Portfolio Manager
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
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.
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
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.

35. FATF Recommendation 23
Competent authorities should have powers of subpoena - search and seizure.
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
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.
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.

36. What must a financial institution do if they have 'Exempt Accounts'?
It was the first law in any country to make money laundering a crime.
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.
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 exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.

37. Wholesale Banking
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.
Banking services between merchant banks and other financial institutions.
The International Monetary Fund (IMF) and the world bank conduct the joint program.
If provided for money laundering to be an internationally extraditable offense.

38. Penny Stocks
Banking services between merchant banks and other financial institutions.
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.
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.

39. The Joint Money Laundering Steering Group (UK) has published a series of AML Guidance Notes for different sectors of the financial community. But - As a group of trade associations - it has...
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
no regulatory power or function
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.
Take immediate steps to ratify and implement the UN instruments.

40. Margin
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
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.
Penny Stocks

41. Identification data
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
Reliable - independent source of documents - data or information.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
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.

42. Why do convertible bonds oftern have lower interest rates than non-convertible bonds?
They can accrue value as the price of the underlying stock rises.
The opposing part of a transaction or trade.
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
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.

43. Open System Stored Value Card
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 ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
Processes transactions for merchants who accept credit cards.

44. What is the goal of FSAP?
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism

45. Corporate Bank

46. How is 'Legal Risk' defined by the 2001 Basel Due Diligence Principles?
a chain-referral scheme.
The FIU of the UK
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
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.

47. FATF Recommendation 20
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
An account that does not show activity other than the posting of interest or account maintenance fees.
Strengthen customer identification measures in iternational and domestic wire transfers.
Funds transfers - Shell Corporations - Contractual Transactions.

48. Commodity Trading Advisor
bear the mark 'APOSTILLE'
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
Direct or indirect advisor on buying and selling futures or commodity options.

49. Scheme
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
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.
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.
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.

50. FATF's designated transactional threshold for Financial Insitutions is _____.
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.
No.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Combines funds from various members and users them to trade in futures or options contracts.