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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. FATF Recommendation 7

2. What is private investment company also known as?
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.
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.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.

3. Why is understanding 'Product Diversion' important to the AML investigator?
Use of electronic clearing houses to facilitate electronic transfers of money that complete transactions between two parties where the buyer receives securities - goods - services etc. in exchange for the money.
The 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.
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.
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.

4. Derivatives
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
Impose AML requirements on alternative remittance systems.
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.

5. When was the Offshore Group of Banking Supervisors established? What was the impetus behind its establishment?
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
Provide mutual legal assistance.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).

6. What is the Wolfsberg group?
Solicits potential customers and issues the credit cards.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.

7. Why is it imperative to have a strong Know Your Employee program?
Open and Closed system
Futures contracts - forwards - swaps or 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.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.

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

9. A 'panzi' scheme is named for whom?
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.
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
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.

10. FATF Sepcial Recommendation on Terrorist Financing -- SR One
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.
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'
tipped off that they are being investigated.
Take immediate steps to ratify and implement the UN instruments.

11. What is a Financial Intelligence Unit?
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
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.
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.
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.

12. FATF Recommendation 38
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
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.
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.

13. OCC Office of the Comptroller of the Currency
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
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.
disrupt or adversely afftect the business of the bank.

14. In Emerging Money Laundering Risks - what 3 areas are associated with 'Contractual Transactions'?
a Sr Management level
tipped off that they are being investigated.
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.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.

15. FATF Recommendation 32
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
Strengthen customer identification measures in iternational and domestic wire transfers.

16. (Credit Card) Issuing Bank
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
a Sr Management level
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.
Solicits potential customers and issues the credit cards.

17. Money Mules
The International Monetary Fund (IMF) and the world bank conduct the joint program.
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.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
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'.

18. What is a Private Investment company (PIC)?
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
Confiscation
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.
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.

19. FATF Recommendation 20
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.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
Terrorism and Terrorist Financing
Banking services between merchant banks and other financial institutions.

20. Automated Sale
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
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.

21. What was the effect of the 1988 Vienna Convention as it relates to extradtition?
If provided for money laundering to be an internationally extraditable offense.
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.
An electronic quotation system that displays quotes of many securities traded over the counter.
Intergovernmental Action Group against Money Laundering in Africa

22. Cash Letter
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.

23. FATF Recommendation 10
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).
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.

24. Scheme
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.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.

25. Penny Stocks
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
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.
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).
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.

26. Account Monitoring Order (UK and several other countries)
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.
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
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. Bust-out
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
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.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
No.

28. How is 'Legal Risk' defined by the 2001 Basel Due Diligence Principles?
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
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.

29. The Palemo Convention
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
Letters Rogatory

30. 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
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
Reliable - independent source of documents - data or information.
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.

31. What was the target of UN Security Council Resolution 1373?
Terrorism and Terrorist Financing
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
Person who - for compensation - provides advice on securities and investments and manages client assets.

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

33. Why is 'Know Your Customer's Customer' important?
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.
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'.
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)

34. Should one ever file a Suspicious Transaction Report (STR/SAR) based on a person's profile?

35. What the primary objectives of Offshore Group of Banking Supervisors?
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
Canada
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.

36. FATF Recommendation 13
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
Person who - for compensation - provides advice on securities and investments and manages client assets.
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.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.

37. Counter Party
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'.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
The opposing part of a transaction or trade.
Take immediate steps to ratify and implement the UN instruments.

38. FATF Sepcial Recommendation on Terrorist Financing -- SR Three
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.
As a financial institution service that is very vulnerable to money laundering.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
Freeze and confiscate terrorist assets.

39. What is a 'NCCT'?
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
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.

40. FATF Recommendation 15
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
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.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
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.

41. FATF's designated transactional threshold for Delaers is Precious metals and / or Precious Stones is _____.
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
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.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)

42. FATF Sepcial Recommendation on Terrorist Financing -- SR Seven
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.
Strengthen customer identification measures in iternational and domestic wire transfers.
Countries should not allow shell banks. Financial institutions should not have correspondent banking relationships with shell banks or banks that allow shell banks to do business through their accounts.
The International Monetary Fund (IMF) and the world bank conduct the joint program.

43. FATF Recommendation 3
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
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.
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.

44. Dematerialization of Securities

45. Common types of 'Derivatives'
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
Futures contracts - forwards - swaps or options.

46. What is one of the cental stragetic tools required for effective action against money laundering?
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
Confiscation
If provided for money laundering to be an internationally extraditable offense.
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.

47. What are the three main functions of a 'Transfer Agent'?
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.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
Freeze and confiscate terrorist assets.
a chain-referral scheme.

48. Futures Commission Merchant (FCM)
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
The US State Dept issues the report annually.
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.

49. 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...
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).
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
foreign correspondent banks
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.

50. Arrest Warrant
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
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]
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
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.