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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. Examples of VSP's
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
a Sr Management level
Middle East and North Africa Financial Action Task Force

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

3. Who appear to be predominant users of hawalas and other alternative remittance systems?
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
Expatriates sending money back to their home country or by other individuals sending money abroad.

4. What is the goal of the Egmont group?

5. Cash Letter
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.

6. FATF Recommendation 9
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 merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
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.
Financial Action Task Force on Money Laundering in South America

7. Variable Annuity
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.
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.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
a chain-referral scheme.

8. FATF Recommendation 37
Open and Closed system
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.

9. White-Collar crime

10. Wholesale Banking
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.
Strengthen customer identification measures in iternational and domestic wire transfers.
Banking services between merchant banks and other financial institutions.
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.

11. Commodity Trading Advisor
Direct or indirect advisor on buying and selling futures or commodity options.
An account that does not show activity other than the posting of interest or account maintenance fees.
Reliable - independent source of documents - data or information.
Combines funds from various members and users them to trade in futures or options contracts.

12. What are some of the AML dangers of casino junkets?
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
Review customer files and conduct random sampling of accounts.
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.
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.

13. Why is a 'money order' attractive to a money launderer?
tipped off that they are being investigated.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
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.

14. Affidavit
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.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
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.

15. FATF Recommendation 7

16. Options/Options Contract
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
Financial Action Task Force
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.
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.

17. Basel's 'CDD for Banks' states that the decision to open an account for a PEP should be taken at...
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.
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.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.

18. FATF Recommendation 26
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
Canada
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.
Reliable - independent source of documents - data or information.

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

20. Commodity Pool Operator
www.artloss.com
Typical mass-market banking where individual customers use local branches of larger commercial banks.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.

21. Dematerialization of Securities

22. Structuring is a common technique in jurisdictions that...
that appear to be linked
tipped off that they are being investigated.
Canada
have in place compulsory currency reporting requirements.

23. FATF Recommendation 31
A deliberate attempt to interfere with the free and fair operation of the market and create artificial - false or misleading appearances with respect to the price of - or market for a security - commodity or currency.
Countries should recognize money laundering as an extraditable offense.
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.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.

24. What is meant by 'Know Your Correspondent Bank'?

25. What is important about the US Money Laundering Control Act (MCLA)?
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
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.
It was the first law in any country to make money laundering a crime.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws

26. Why does a launderer try to run transactions through a concentration account of a financial institution?
tipped off that they are being investigated.
An account that does not show activity other than the posting of interest or account maintenance fees.
www.artloss.com
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.

27. FATF Sepcial Recommendation on Terrorist Financing -- SR Eight
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 bank which uses the services of another bank - such as check clearing - wire transfers - etc. The bank providing the service is the 'Correspondent Bank'
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.

28. Arrest Warrant
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.
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.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.

29. GIABA
Financial Action Task Force
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
Intergovernmental Action Group against Money Laundering in Africa
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]

30. Distribution Channels (Insurance Industry)
Funds transfers - Shell Corporations - Contractual Transactions.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.
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]

31. FATF Sepcial Recommendation on Terrorist Financing -- SR Six
Impose AML requirements on alternative remittance systems.
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.

32. FATF Recommendation 36
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
Provide mutual legal assistance.
Open and Closed system
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.

33. Portfolio Manager
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
disrupt or adversely afftect the business of the bank.
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.
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.

34. FATF Recommendations examples of non-financial businesses and professions
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
People who help move the billions of dollars drug traffickers earn around the world.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.

35. What is the significance of 'Non-Financial Trades and Businesses' in realtion to Money Laundering?
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.

36. FATF Recommendation 6
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).
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.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
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.

37. FATF Recommendation 28
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
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.
Competent authorities should have powers of subpoena - search and seizure.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.

38. What was the target of UN Security Council Resolution 1267?
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.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
Combines funds from various members and users them to trade in futures or options contracts.

39. Dormant Account
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
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.
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]
An account that does not show activity other than the posting of interest or account maintenance fees.

40. 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
Person who - for compensation - provides advice on securities and investments and manages client assets.
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
Harmful or Preferrential Tax Regimes.

41. What tend to be the markings of Private Banking transactions?
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.

42. FATF Recommendation 16
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
no regulatory power or function
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.
Provide mutual legal assistance.

43. Fraud
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.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
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.

44. Examples of White-collar crime
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
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 - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
Letters Rogatory

45. What is the aim of Joint Money Laundering Steering Group? (UK)
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
An electronic quotation system that displays quotes of many securities traded over the counter.

46. FATF Recommendation 4
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
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.
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
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.

47. Market Manipulation
A deliberate attempt to interfere with the free and fair operation of the market and create artificial - false or misleading appearances with respect to the price of - or market for a security - commodity or currency.
Impose AML requirements on alternative remittance systems.
EurAsian Group
An electronic quotation system that displays quotes of many securities traded over the counter.

48. FATF Recommendation 25
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
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.
2% - 5% ($590B - $1.5T)
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.

49. (Credit Card) Issuing Bank
Solicits potential customers and issues the credit cards.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
EurAsian Group
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].

50. What the primary objectives of Offshore Group of Banking Supervisors?
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.
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.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
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.