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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. Reverse Flip

2. US law prohibhits Foriegn Shell Banks from ____?
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.
Letters Rogatory
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
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.

3. Penny Stocks
no regulatory power or function
A US Federal Court
Often co-branded by financial institution; may have VISA or MasterCard logos; can be reloadable; usually can access ATMs for withdrawls globally; non-customers can buy them.
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.

4. Commodity
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
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.
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 Sr Management level

5. USA Patriot Act Section 312 'Offshore Bank'
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
A bank whose license has conditions that prohibhit the licensed entity from conducting banking activities with the citizens - or with the local currency - of the country that issued that license.
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.
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.

6. What does FIU do?
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
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.
Letters Rogatory
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.

7. Why is 'Know Your Correspondent Bank' important?
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.
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.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
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'

8. Three stages of money laundering
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
Placement - Layering - Integration.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
Take immediate steps to ratify and implement the UN instruments.

9. What is a 'Trust'?
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.
tipped off that they are being investigated.
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.

10. The 'Art Loss Register'

11. When was the Offshore Group of Banking Supervisors established? What was the impetus behind its establishment?
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
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]
EurAsian Group
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).

12. Corporate Bank

13. Free Look Period
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
Reliable - independent source of documents - data or information.
www.artloss.com

14. FATF Recommendation 31
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
Person who - for compensation - provides advice on securities and investments and manages client assets.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
Review customer files and conduct random sampling of accounts.

15. Futures Commission Merchant (FCM)
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 express trusts - including information on the settlor - trustee and beneficiaries.
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.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.

16. FATF Recommendation 39
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
Countries should recognize money laundering as an extraditable offense.
Typical mass-market banking where individual customers use local branches of larger commercial banks.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.

17. What is the goal of the Egmont group?

18. Operational risks in KYC context relate to...
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.

19. Variable Annuity
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
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.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
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. What does theInternationa Narcotics Control Strategy Report (INCSR) entail?
Direct money of Criminal A is sent to foreign bank account of company B. Investment company C is formed as A's country. A is appointed as director of C. C borrows money from B and buys building which is rented to 3rd parties. with rent - C pays off B
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.

21. FATF Recommendation 26
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
Stored Value Cards - Mobile Payments - Internet Payments.
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 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.

22. 'Competent Authorities' refers to _____.
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.
Terrorism and Terrorist Financing
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.

23. 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.
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'
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.

24. Cash Log

25. Who issues the Internationa Narcotics Control Strategy Report (INCSR) and how often?
The US State Dept issues the report annually.
Often co-branded by financial institution; may have VISA or MasterCard logos; can be reloadable; usually can access ATMs for withdrawls globally; non-customers can buy them.
Funds transfers - Shell Corporations - Contractual Transactions.
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.

26. FATF Recommendation 34
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
The US State Dept issues the report annually.
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 take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.

27. What is one of the cental stragetic tools required for effective action against money laundering?
Solicits potential customers and issues the credit cards.
Confiscation
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.
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.

28. What do 'Hedge Funds' attempt to do?
Funds transfers - Shell Corporations - Contractual Transactions.
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
Impose AML requirements on alternative remittance systems.
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.

29. (Credit Card) Issuing Bank
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.
Solicits potential customers and issues the credit cards.
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.
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.

30. Counter Party
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
The opposing part of a transaction or trade.
Intergovernmental Action Group against Money Laundering in Africa
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.

31. 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...
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.
no regulatory power or function
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 recognize money laundering as an extraditable offense.

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

33. Apostille

34. What were recently identified as Emerging Money Laundering risks?
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
Funds transfers - Shell Corporations - Contractual Transactions.
www.artloss.com
The UN Convention against Transnational Organized Crime [Adopted 12/2000].

35. What are the two types of Stored Value Cards?
Open and Closed system
Canada
The US State Dept issues the report annually.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.

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

37. Guaranteed Introducing Broker

38. OTC markets Over-The-Counter
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 principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.
Financial Action Task Force on Money Laundering in South America
A market is which securities are bought and sold outside of establisehd securities markets.

39. Dematerialization of Securities

40. FATF Recommendation 32
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 maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
If provided for money laundering to be an internationally extraditable offense.
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.

41. Many jurisdictions have legislation to ensure that suspects are not ____?
disrupt or adversely afftect the business of the bank.
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.
tipped off that they are being investigated.

42. Money Mules
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.
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.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
Stored Value Cards - Mobile Payments - Internet Payments.

43. FATF Recommendations examples of non-financial businesses and professions
disrupt or adversely afftect the business of the bank.
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.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.

44. FATF's designated transactional threshold for Financial Insitutions is _____.
The world's largest private DB of stolen art.
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
If provided for money laundering to be an internationally extraditable offense.

45. What are some of the AML dangers of casino junkets?
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
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.
Typical mass-market banking where individual customers use local branches of larger commercial banks.
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.

46. (Credit Card) Third-Party processor
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]
Solicits potential customers and issues the credit cards.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.

47. What are included in the Wolfsberg AML Principles on Private Banking?
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).
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
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.

48. Basel's 'CDD for Banks' states that the decision to open an account for a PEP should be taken at...
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.
Solicits potential customers and issues the credit cards.
a Sr Management level
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.

49. Who conducts the Financial Sector Assessment Program (FSAP)?
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.
The International Monetary Fund (IMF) and the world bank conduct the joint program.
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.
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.

50. FATF Recommendation 40
Reliable - independent source of documents - data or information.
disrupt or adversely afftect the business of the bank.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.