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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. Account Monitoring Order (UK and several other countries)
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.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.

2. What are the three main functions of a 'Transfer Agent'?
Typical mass-market banking where individual customers use local branches of larger commercial banks.
Report suspicious transactions linked to terrorism.
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.
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.

3. What was the target of UN Security Council Resolution 1373?
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
have in place compulsory currency reporting requirements.
Terrorism and Terrorist Financing
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism

4. CFT
www.artloss.com
Countering the Financing of Terrorism (Counter Terrorist Financing).
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.
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.

5. FATF Sepcial Recommendation on Terrorist Financing -- SR Four
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
Report suspicious transactions linked to terrorism.
Stored Value Cards - Mobile Payments - Internet Payments.
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.

6. What criterion does the US need to enforce its 'Extraterritorial Reach'?

7. Corporate Bank

8. A public perception that a bank is not able to manage its operational risk effectively can...
disrupt or adversely afftect the business of the bank.
EurAsian Group
Combines funds from various members and users them to trade in futures or options contracts.
Impose AML requirements on alternative remittance systems.

9. What is meant by 'Know Your Customer's customer'?
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
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.
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.

10. FATF Recommendation 8
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
Foreign Corrupt Practices Act
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.

11. (Credit card) Acquiring Bank
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.
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.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
Processes transactions for merchants who accept credit cards.

12. What does an Extradition Treaty specify?
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
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.
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.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)

13. Moneyval
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
Typical mass-market banking where individual customers use local branches of larger commercial banks.
The FIU of Russia
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.

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

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

16. FATF Recommendation 2
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
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.

17. In what country is the Egmont Group Secretariat now located?
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.
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.
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.
Canada

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

19. Boiler Room
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.
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 apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
a chain-referral scheme.

20. Cash Log

21. What do 'Hedge Funds' attempt to do?
Solicits potential customers and issues the credit cards.
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
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.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.

22. Arrest Warrant
Countries should recognize money laundering as an extraditable offense.
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.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.

23. FATF Recommendation 29
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.
If provided for money laundering to be an internationally extraditable offense.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
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.

24. What do boiler room salespeople typically do?

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

26. What are included in the Wolfsberg AML Principles on Private Banking?
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
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'
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
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.

27. FATF Recommendation 32
a Sr Management level
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
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'.

28. EAG
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
EurAsian Group
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.
Confiscation

29. FATF Recommendation 5
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
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.
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.
Foreign Corrupt Practices Act

30. OCC Office of the Comptroller of the Currency
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
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]

31. Wholesale Banking
Banking services between merchant banks and other financial institutions.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.

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

33. Cash Letter
Processes transactions for merchants who accept credit cards.
Financial Action Task Force on Money Laundering in South America
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
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.

34. How do most governments view Private Banking?
The opposing part of a transaction or trade.
An electronic quotation system that displays quotes of many securities traded over the counter.
As a financial institution service that is very vulnerable to money laundering.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.

35. FATF Sepcial Recommendation on Terrorist Financing -- SR Nine
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.

36. Investigative Log
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
Funds transfers - Shell Corporations - Contractual Transactions.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.

37. A 'Cash Letter' can also be referred to as _____.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
Pouch activity.
As a financial institution service that is very vulnerable to money laundering.

38. Futures Commission Merchant (FCM)
Stored Value Cards - Mobile Payments - Internet Payments.
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
If provided for money laundering to be an internationally extraditable offense.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.

39. Mutual Fund
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.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.

40. USA Patriot Act Section 312 'Offshore Bank'
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.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
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.
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.

41. Short Sale

42. What is the Wolfsberg group?
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.

43. Automated Sale
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
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.
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.

44. FATF Recommendation 39
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
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'.
Countries should recognize money laundering as an extraditable offense.

45. FATF Recommendation 13
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.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
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.

46. The 'Art Loss Register'

47. FATF Recommendation 1
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
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.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).

48. In Emerging Money Laundering Risks - what 3 methods are identified as 'Funds Transfers'?
Stored Value Cards - Mobile Payments - Internet Payments.
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
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.
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.

49. Commodity Trading Advisor
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
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
Direct or indirect advisor on buying and selling futures or commodity options.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.

50. Nostro