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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. 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.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization

2. May a shell bank maintain a correspondent account with a US bank?
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.
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.
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data

3. Why does a launderer try to run transactions through a concentration account of a financial institution?
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
The US State Dept issues the report annually.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
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.

4. FATF Recommendation 11
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.
The opposing part of a transaction or trade.
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
The FIU of the UK

5. Foriegn Shell Banks are vehicles for ______ & ______?
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.
The FIU of the UK
Money Laundering and Tax Evasion
disrupt or adversely afftect the business of the bank.

6. FATF Recommendation 17
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.
Penny Stocks
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.

7. Moneyval
The opposing part of a transaction or trade.
As 'felonies' or 'all offenses in the criminal code'.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism

8. OCC Office of the Comptroller of the Currency
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.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
The UN Convention against Transnational Organized Crime [Adopted 12/2000].

9. FATF Recommendation 19
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.
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
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.
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.

10. A public perception that a bank is not able to manage its operational risk effectively can...
bear the mark 'APOSTILLE'
disrupt or adversely afftect the business of the bank.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
Terrorism and Terrorist Financing

11. Margin
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
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.
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.

12. Who appear to be predominant users of hawalas and other alternative remittance systems?
Placement - Layering - Integration.
Expatriates sending money back to their home country or by other individuals sending money abroad.
If provided for money laundering to be an internationally extraditable offense.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).

13. Cash Equivalent

14. The 'Art Loss Register'

15. A 'panzi' scheme is named for whom?
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
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.
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
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.

16. Investigative Log
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
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]
To reduce financial crime - including money laundering and terrorit financing.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.

17. The Vienns Convention
Canada
EurAsian Group
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.
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].

18. 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?
Review customer files and conduct random sampling of accounts.
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.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.

19. What is important about the US Money Laundering Control Act (MCLA)?
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
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.
It was the first law in any country to make money laundering a crime.
Pouch activity.

20. 'Loan Back' method. Give example of how it works.

21. FATF Recommendation 40
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
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.

22. Corporate Bank

23. In Emerging Money Laundering Risks - what 3 methods are identified as 'Funds Transfers'?
Stored Value Cards - Mobile Payments - Internet Payments.
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.
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
A US Federal Court

24. Cash Log

25. What is private investment company also known as?
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.
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.
Penny Stocks
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.

26. Commodity Trading Advisor
bear the mark 'APOSTILLE'
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
Direct or indirect advisor on buying and selling futures or commodity options.
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.

27. Agent (Insurance Industry)
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
Reliable - independent source of documents - data or information.
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

28. Dormant Account
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
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
An account that does not show activity other than the posting of interest or account maintenance fees.
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.

29. FATF Recommendation 36
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
Provide mutual legal assistance.
Strengthen customer identification measures in iternational and domestic wire transfers.

30. FATF Recommendation 34
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
The opposing part of a transaction or trade.
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.

31. Operational risks in KYC context relate to...
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
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]
Competent authorities should have powers of subpoena - search and seizure.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.

32. Pink Sheets
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.
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
An electronic quotation system that displays quotes of many securities traded over the counter.
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.

33. Underwriting
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
Reliable - independent source of documents - data or information.
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.
Strengthen customer identification measures in iternational and domestic wire transfers.

34. Cash Letter
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.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
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.
tipped off that they are being investigated.

35. FATF's designated transactional threshold for Delaers is Precious metals and / or Precious Stones is _____.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
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.

36. 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 detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
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
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data

37. MENAFATF
Middle East and North Africa Financial Action Task Force
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
Person who - for compensation - provides advice on securities and investments and manages client assets.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).

38. Why is 'Know Your Customer's Customer' important?
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.
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.

39. What were recently identified as Emerging Money Laundering risks?
Terrorism and Terrorist Financing
Funds transfers - Shell Corporations - Contractual Transactions.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
have in place compulsory currency reporting requirements.

40. What are the three main functions of a 'Transfer Agent'?
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
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.
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.
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.

41. Characteristics of an 'Open System Stored Value Card'
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.
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.
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
Harmful or Preferrential Tax Regimes.

42. What do boiler room salespeople typically sell?
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.
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
Penny Stocks
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.

43. Examples of VSP's
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
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.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.

44. FATF Recommendation 28
Competent authorities should have powers of subpoena - search and seizure.
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
Passed in 1977 - the US law is primarily known for its anti-bribery provisions (it also applies to foreign companies with stocks covered by the Securities and Exchange Act of 1934).

45. What is one of the Financial Service Authority's (UK) tasks?
disrupt or adversely afftect the business of the bank.
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
To reduce financial crime - including money laundering and terrorit financing.

46. Investment Adviser
Person who - for compensation - provides advice on securities and investments and manages client assets.
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.
Pouch activity.
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.

47. Derivatives
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.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.

48. UK courts view on 'Suspicion'
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.
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
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.

49. FATF Recommendation 31
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.

50. What can result from on institution's disregard for the Basel Due Diligence Principle?
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.
Funds transfers - Shell Corporations - Contractual Transactions.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
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.