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. Fraud
While it is normally known as a Personal Investment Company (PIC) - in some jurisdictions - the international business company or exempt company is also the same.
The opposing part of a transaction or trade.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
Intergovernmental Action Group against Money Laundering in Africa


2. 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.
Harmful or Preferrential Tax Regimes.
Money Laundering and Tax Evasion
Financial Action Task Force on Money Laundering in South America


3. What is the Wolfsberg group?
Countering the Financing of Terrorism (Counter Terrorist Financing).
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
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.


4. Reverse Flip

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5. Bust-out
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.


6. 'Kiting' via credit card
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.
Financial Action Task Force on Money Laundering in South America
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
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.


7. A 'Cash Letter' can also be referred to as _____.
Pouch activity.
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.
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
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.


8. Arrest Warrant
Competent authorities should have powers of subpoena - search and seizure.
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
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.


9. Derivatives
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.
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
that appear to be linked


10. Guaranteed Introducing Broker

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11. FATF Recommendation 39
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
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.
Countries should recognize money laundering as an extraditable offense.


12. How do most governments view Private Banking?
As a financial institution service that is very vulnerable to money laundering.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
Intergovernmental Action Group against Money Laundering in Africa
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.


13. (Credit Card) Third-Party processor
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
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.
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
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.


14. Moneyval
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
The world's largest private DB of stolen art.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism


15. Market Manipulation
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
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.


16. FATF Recommendation 27
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
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.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
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


17. FATF Recommendation 13
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.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)


18. FATF Sepcial Recommendation on Terrorist Financing -- SR Five

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19. What does the principal US money laundering law look for before implementing its 'Extraterritorial Reach'?
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
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.
Futures contracts - forwards - swaps or options.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.


20. EAG
foreign correspondent banks
The world's largest private DB of stolen art.
An electronic quotation system that displays quotes of many securities traded over the counter.
EurAsian Group


21. FATF Recommendation 40
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
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 contractual arrangement whereby the trustee manages the property for the benefit of the beneficiary in accordance with the contractual terms set by the grantor.
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.


22. What is the primary use of a 'Mutual Legal Assistance Treaty'?
Placement - Layering - Integration.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
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.
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.


23. What must a financial institution do if they have 'Exempt Accounts'?
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
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.
Report suspicious transactions linked to terrorism.
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.


24. 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...
Harmful or Preferrential Tax Regimes.
A US Federal Court
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.
foreign correspondent banks


25. What are the three main functions of a 'Transfer Agent'?
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
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.
Open and Closed system


26. Wholesale Banking
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
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.
Strengthen customer identification measures in iternational and domestic wire transfers.
Banking services between merchant banks and other financial institutions.


27. FATF Recommendation 9
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.
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 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 FIU of the UK


28. What is a Financial Intelligence Unit?
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.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
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.


29. FATF Recommendation 24
As a financial institution service that is very vulnerable to money laundering.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.


30. Commodity
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
Typical mass-market banking where individual customers use local branches of larger commercial banks.


31. Abusive Squeezes

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32. What do boiler room salespeople typically do?

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33. What does FIU do?
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.
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
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.


34. What are included in the Wolfsberg AML Principles on Private Banking?
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
If provided for money laundering to be an internationally extraditable offense.
Terrorism and Terrorist Financing


35. What normal business practise makes 'Product Division' possible?
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
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.
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
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.


36. Why is 'Know Your Customer's Customer' important?
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
Terrorism and Terrorist Financing
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.
The FIU of the UK


37. FATF Recommendation 25
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
To reduce financial crime - including money laundering and terrorit financing.


38. Scheme
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
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.
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.


39. FATF's designated transactional threshold for Financial Insitutions is _____.
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.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
Banking services between merchant banks and other financial institutions.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)


40. FATF Sepcial Recommendation on Terrorist Financing -- SR One
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
Take immediate steps to ratify and implement the UN instruments.
Market participants intentionally restrict a security's liquidity. May lead to increased profits when the security's price rises due to the lack of 'supply'.
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.


41. Penny Stocks
People who help move the billions of dollars drug traffickers earn around the world.
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.
Securities with very low marker price - volume and/or liquidity that are traded on a securities exchange or on the OTC markets. They tend to be more volatile than those on the major exchanges.
Financial institutions may rely upon intermediaries to perform certain CDD elements provided the intermediary is supervised and regulated. However - ultimate responsibility remains with the financial institution.


42. Open System Stored Value Card
Market participants intentionally restrict a security's liquidity. May lead to increased profits when the security's price rises due to the lack of 'supply'.
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
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.
Foreign Corrupt Practices Act


43. FATF Recommendation 8
Direct or indirect advisor on buying and selling futures or commodity options.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)


44. Under the US Bank Secrecy Act - SAR filings are confidential and the institutions employees cannot ____?

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45. FATF Recommendation 6
a chain-referral scheme.
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
Procedures used to determine the beneficial owners of a correspondent bank and the type of activity that wil be 'normal and expected' for the bank.


46. Commodity Pool Operator
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.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
foreign correspondent banks
Market participants intentionally restrict a security's liquidity. May lead to increased profits when the security's price rises due to the lack of 'supply'.


47. Characteristics of an 'Open System Stored Value Card'
Combines funds from various members and users them to trade in futures or options contracts.
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 contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.


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

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49. FATF Recommendation 15
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.


50. 'Competent Authorities' refers to _____.
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
Canada
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 grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).