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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. Arrest Warrant
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
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 US Federal Court

2. FATF Recommendations examples of non-financial businesses and professions
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.
bear the mark 'APOSTILLE'
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.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.

3. FATF Recommendation 17
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
foreign correspondent banks
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).
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.

4. 'Coucil of Europe Convention on Laundering - Search - Seizure and Confiscation of the Proceeds from Crime' is known for what?
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
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.

5. What were recently identified as Emerging Money Laundering risks?
Impose AML requirements on alternative remittance systems.
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
Funds transfers - Shell Corporations - Contractual Transactions.
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.

6. What is the Wolfsberg group?
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.
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.
2% - 5% ($590B - $1.5T)
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.

7. What does the 'SEC' (US Securities and Exchange Commission) do?
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.
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.
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.

8. Who appear to be predominant users of hawalas and other alternative remittance systems?
Expatriates sending money back to their home country or by other individuals sending money abroad.
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.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.

9. How are 'Predicate Crimes' sometimes identified?

10. In Emerging Money Laundering Risks - what 3 methods are identified as 'Funds Transfers'?
Stored Value Cards - Mobile Payments - Internet Payments.
a chain-referral scheme.
The FIU of Russia
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.

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

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

13. Cash Log

14. Three stages of money laundering
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Pouch activity.
Placement - Layering - Integration.
It conducts investigations in support of a government's confiscation or seizure efforts.

15. FATF Recommendation 26
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization

16. Operational risks in KYC context relate to...
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
no regulatory power or function
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.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.

17. In what country is the Egmont Group Secretariat now located?
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
www.artloss.com
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.
Canada

18. FATF Recommendation 13
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
a chain-referral scheme.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.

19. FATF Recommendation 23
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.
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
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.

20. What is private investment company also known as?
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.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.

21. FATF Recommendation 29
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
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.
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.

22. Why do companies export their goods at prices far below those in their home country?
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
disrupt or adversely afftect the business of the bank.

23. Retail Banking
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.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
To reduce financial crime - including money laundering and terrorit financing.

24. What is a 'Trust'?
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
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.
Canada

25. FATF Recommendation 4
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
Terrorism and Terrorist Financing
Solicits potential customers and issues the credit cards.

26. What does an Extradition Treaty specify?
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.
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.
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'.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.

27. FATF Recommendation 6
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.
If provided for money laundering to be an internationally extraditable offense.
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.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.

28. Credit Card Associations
Typical mass-market banking where individual customers use local branches of larger commercial banks.
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.
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.
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.

29. What was the target of UN Security Council Resolution 1373?
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.
Terrorism and Terrorist Financing
Combines funds from various members and users them to trade in futures or options contracts.
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.

30. GIABA
Often co-branded by financial institution; may have VISA or MasterCard logos; can be reloadable; usually can access ATMs for withdrawls globally; non-customers can buy them.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
Intergovernmental Action Group against Money Laundering in Africa
An electronic quotation system that displays quotes of many securities traded over the counter.

31. CFT
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
Letters Rogatory
Countering the Financing of Terrorism (Counter Terrorist Financing).
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.

32. A pyramid scheme is also called...
Take immediate steps to ratify and implement the UN instruments.
a chain-referral scheme.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
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.

33. FATF Recommendation 33
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
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.
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.

34. USA Patriot Act Section 312 'Offshore Bank'
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.
Impose AML requirements on alternative remittance systems.
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.
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization

35. FATF Sepcial Recommendation on Terrorist Financing -- SR Three
No.
Freeze and confiscate terrorist assets.
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.

36. Investigative Log
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
Open and Closed system
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.

37. Money Mules
Often co-branded by financial institution; may have VISA or MasterCard logos; can be reloadable; usually can access ATMs for withdrawls globally; non-customers can buy them.
A 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.
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
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.

38. FATF Recommendation 9
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
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.
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.

39. FATF Recommendation 30
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.

40. FATF Recommendation 22

41. What tend to be the markings of Private Banking transactions?
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.

42. FATF Recommendation 28
Account established by a domestic banking institution to receive deposits from - make payments on behalf of - or handle other financial transactions for a foreign financial institution - usually in the foreign financial institutions's cureency.
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.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
Competent authorities should have powers of subpoena - search and seizure.

43. Derivatives
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
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.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.

44. What do boiler room salespeople typically sell?
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.
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 institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
Penny Stocks

45. Counter Party
To reduce financial crime - including money laundering and terrorit financing.
It conducts investigations in support of a government's confiscation or seizure efforts.
The opposing part of a transaction or trade.
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.

46. How is 'Identity theft' often accomplished?
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
have in place compulsory currency reporting requirements.
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.

47. 'Open-end Mutual Fund' (or Company)

48. How is 'Legal Risk' defined by the 2001 Basel Due Diligence Principles?
The possibility that lawsuits adverse judgements or contracts that turn out to be unenforceable can disrupt or adversely affect the operatinos or condition of a financial siutation.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
Applied by an authority - it is a special seal which certifies that a document is a true copy of an original. However - it does not and cannot speak to the validity of the document's content.

49. Why is a 'money order' attractive to a money launderer?
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered 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.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
disrupt or adversely afftect the business of the bank.

50. Commodity Pool Operator
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
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 grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).