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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. Fraud
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
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.
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.
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.

2. What was the effect of the 1988 Vienna Convention as it relates to extradtition?
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
If provided for money laundering to be an internationally extraditable offense.

3. Abusive Squeezes

4. Open System Stored Value Card
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
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]

5. FATF Recommendation 37
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
It was the first law in any country to make money laundering a crime.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
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.

6. Agent (Insurance Industry)
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
that appear to be linked
A market is which securities are bought and sold outside of establisehd securities markets.
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).

7. 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
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.
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
Harmful or Preferrential Tax Regimes.
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.

8. Pink Sheets
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.
An electronic quotation system that displays quotes of many securities traded over the counter.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
Open and Closed system

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

10. Bust-out
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.

11. GIABA
Freeze and confiscate terrorist assets.
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.
Intergovernmental Action Group against Money Laundering in Africa
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.

12. Distribution Channels (Insurance Industry)
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.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
The FIU of Russia
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]

13. What does Financial Sector AssessmentProgram (FSAP) do?
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
Countering the Financing of Terrorism (Counter Terrorist Financing).
A US Federal Court

14. Who conducts the Financial Sector Assessment Program (FSAP)?
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
The International Monetary Fund (IMF) and the world bank conduct the joint program.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.

15. FATF Recommendation 20
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
Foreign Corrupt Practices Act

16. What is one of the cental stragetic tools required for effective action against money laundering?
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
Confiscation
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.

17. Investigative Log
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
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.
Strengthen customer identification measures in iternational and domestic wire transfers.
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.

18. In Emerging Money Laundering Risks - what 3 methods are identified as 'Funds Transfers'?
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
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.
Stored Value Cards - Mobile Payments - Internet Payments.
Harmful or Preferrential Tax Regimes.

19. FATF Sepcial Recommendation on Terrorist Financing -- SR Seven
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
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.
foreign correspondent banks
Strengthen customer identification measures in iternational and domestic wire transfers.

20. Express Trust
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.
Money Laundering and Tax Evasion
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.

21. What is the goal of FSAP?
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'
The FIU of Russia
People who help move the billions of dollars drug traffickers earn around the world.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.

22. FATF Sepcial Recommendation on Terrorist Financing -- SR Six
The FIU of the UK
They can accrue value as the price of the underlying stock rises.
Impose AML requirements on alternative remittance systems.
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.

23. Why is understanding 'Product Diversion' important to the AML investigator?
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
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.
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.
Typical mass-market banking where individual customers use local branches of larger commercial banks.

24. A notary can issue a Apostille but it must be in a country that signed The Hague Convention (1961) and it must ___________. If the notary doesn't understand - find another one.

25. FATF's designated transactional threshold for Delaers is Precious metals and / or Precious Stones is _____.
Funds transfers - Shell Corporations - Contractual Transactions.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
A US Federal Court
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.

26. FATF Sepcial Recommendation on Terrorist Financing -- SR Eight
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.
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.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
A fund setup by an investment trust in which the number of shares can fluctuate as investors' move in and out the fund. Share prices moves in direct proportion of the net asset value of the underlying investments (no premium or discount).

27. Legal Arrangements (Insurance Industry)
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]
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.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].

28. Penny Stocks
Futures contracts - forwards - swaps or options.
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
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.
To reduce financial crime - including money laundering and terrorit financing.

29. A pyramid scheme is also called...
Combines funds from various members and users them to trade in futures or options contracts.
a chain-referral scheme.
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.
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.

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

31. FATF Recommendation 12
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.
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].
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]
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.

32. FATF
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.
Financial Action Task Force
Countries should recognize money laundering as an extraditable offense.
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.

33. FATF Recommendation 7

34. What is the FCPA primarily known for?
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.
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).
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
No.

35. Commodity Pool Operator
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
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.

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

37. FATF Sepcial Recommendation on Terrorist Financing -- SR Four
Report suspicious transactions linked to terrorism.
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
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.

38. EAG
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
www.artloss.com
EurAsian Group

39. Investment Adviser
Person who - for compensation - provides advice on securities and investments and manages client assets.
Penny Stocks
have in place compulsory currency reporting requirements.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.

40. What tend to be the markings of Private Banking transactions?
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
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
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.

41. Cash Letter
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
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.
Harmful or Preferrential Tax Regimes.

42. Who issues the Internationa Narcotics Control Strategy Report (INCSR) and how often?
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
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.
The US State Dept issues the report annually.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.

43. FATF Recommendation 29
The opposing part of a transaction or trade.
tipped off that they are being investigated.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
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.

44. What was the target of UN Security Council Resolution 1373?
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
Money Laundering and Tax Evasion
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.
Terrorism and Terrorist Financing

45. Why do companies export their goods at prices far below those in their home country?
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
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.
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.

46. What is the significance of 'Non-Financial Trades and Businesses' in realtion to Money Laundering?
Real Estate - Insurance Transactions - Trade-Based 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).
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.

47. What was the target of UN Security Council Resolution 1267?
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.
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
Financial Action Task Force
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.

48. What are included in the Wolfsberg AML Principles on Private Banking?
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.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.

49. What were recently identified as Emerging Money Laundering risks?
Futures contracts - forwards - swaps or options.
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.
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
Funds transfers - Shell Corporations - Contractual Transactions.

50. FATF Recommendation 11
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
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.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.