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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. Underwriting
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 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.
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.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.

2. The Palemo Convention
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
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
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.

3. OTC markets Over-The-Counter
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
A market is which securities are bought and sold outside of establisehd securities markets.

4. FATF Recommendation 11
Financial Action Task Force on Money Laundering in South America
As 'felonies' or 'all offenses in the criminal code'.
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.
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.

5. What must a financial institution do if they have 'Exempt Accounts'?
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
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
www.artloss.com

6. FATF Recommendation 2
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
Terrorism and Terrorist Financing
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
A market is which securities are bought and sold outside of establisehd securities markets.

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

8. What was the effect of the 1988 Vienna Convention as it relates to extradtition?
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
People who help move the billions of dollars drug traffickers earn around the world.
If provided for money laundering to be an internationally extraditable offense.

9. Money Mules
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.
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
Foreign Corrupt Practices Act
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.

10. Dormant Account
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.
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.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
An account that does not show activity other than the posting of interest or account maintenance fees.

11. How does the Egmont group help its members?
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
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.
People who help move the billions of dollars drug traffickers earn around the world.
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].

12. According to FATF - financial transactions above a designated threshold may include situations where the transaction takes place in a single operation or in several operations...
that appear to be linked
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.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.

13. Commodity Trading Advisor
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
Direct or indirect advisor on buying and selling futures or commodity options.
A market is which securities are bought and sold outside of establisehd securities markets.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.

14. Foriegn Shell Banks are vehicles for ______ & ______?
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
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.
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.
Money Laundering and Tax Evasion

15. FATF Recommendation 35
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
Countries should 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.
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.

16. Options/Options Contract
Futures contracts - forwards - swaps or options.
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.
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.
Urge investors to buy 'house stocks' - stocks that the firm buys and sells as a market maker or has in its inventory. Oftentimes - they are running a 'pump-and-dumo' scheme.

17. 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
Harmful or Preferrential Tax Regimes.
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
Banking services between merchant banks and other financial institutions.
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.

18. The IMF estimates that laundered funds compromise ______ of the world's GDP
A bank which uses the services of another bank - such as check clearing - wire transfers - etc. The bank providing the service is the 'Correspondent Bank'
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.
2% - 5% ($590B - $1.5T)
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.

19. FATF Sepcial Recommendation on Terrorist Financing -- SR Six
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'
Impose AML requirements on alternative remittance systems.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
If provided for money laundering to be an internationally extraditable offense.

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

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

22. Who appear to be predominant users of hawalas and other alternative remittance systems?
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
Expatriates sending money back to their home country or by other individuals sending money abroad.
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.
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.

23. What does the principal US money laundering law look for before implementing its 'Extraterritorial Reach'?
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
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
Terrorism and Terrorist Financing
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.

24. Who are the parties involved in a trust?
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
Typical mass-market banking where individual customers use local branches of larger commercial banks.
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.

25. Commodity
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
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.
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
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

26. Three stages of money laundering
Provide mutual legal assistance.
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.
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.
Placement - Layering - Integration.

27. 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.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
Placement - Layering - Integration.

28. FATF Recommendations examples of non-financial businesses and professions
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.
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.

29. Wire Transfers
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.
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
An electronic quotation system that displays quotes of many securities traded over the counter.

30. FATF Recommendation 39
Countries should recognize money laundering as an extraditable offense.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
have in place compulsory currency reporting requirements.
It conducts investigations in support of a government's confiscation or seizure efforts.

31. 'Kiting' via credit card
To promote the effective supervision of banks in their jurisdictions; to further international cooperation in the supervision between the Offshore Banking Supervisors - and with Basel committee member nations and other banking supervisors.
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
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.

32. US law prohibhits Foriegn Shell Banks from ____?
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
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.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
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'

33. 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]
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
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. What is the Serious Organised Crime Agency (SOCA)?
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
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.
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 the UK

35. Derivatives
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.
The FIU of the UK
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.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.

36. FATF Sepcial Recommendation on Terrorist Financing -- SR Seven
Strengthen customer identification measures in iternational and domestic wire transfers.
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism

37. What is the significance of 'Non-Financial Trades and Businesses' in realtion to Money Laundering?
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
Confiscation
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.

38. What is private investment company also known as?
Direct or indirect advisor on buying and selling futures or commodity options.
Harmful or Preferrential Tax Regimes.
As 'felonies' or 'all offenses in the criminal code'.
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.

39. Why does a launderer try to run transactions through a concentration account of a financial institution?
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.

40. A pyramid scheme is also called...
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.
Contract issued by an insurance company under which an investor provides the insurer with funds (a lump-sum or series of payments). The insurer then agrees to make periodic payments to the investor starting the immediately or in the future.
a chain-referral scheme.

41. Cash Log

42. What normal business practise makes 'Product Division' possible?
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.

43. In what country is the Egmont Group Secretariat now located?
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
Canada
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
2% - 5% ($590B - $1.5T)

44. FATF Sepcial Recommendation on Terrorist Financing -- SR One
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
Take immediate steps to ratify and implement the UN instruments.
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.
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.

45. What the primary objectives of Offshore Group of Banking Supervisors?
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.
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
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.
Reliable - independent source of documents - data or information.

46. Who appoints a 'Federal Receiver' (US)?
Pouch activity.
A US Federal Court
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
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.

47. CFT
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
Letters Rogatory
Countering the Financing of Terrorism (Counter Terrorist Financing).
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.

48. FCPA (US)
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.
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
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.
Foreign Corrupt Practices Act

49. FATF's designated transactional threshold for Financial Insitutions is _____.
They can accrue value as the price of the underlying stock rises.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Direct or indirect advisor on buying and selling futures or commodity options.
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.

50. Margin
To reduce financial crime - including money laundering and terrorit financing.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
Banking services between merchant banks and other financial institutions.
The US State Dept issues the report annually.