Test your basic knowledge |

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 17
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.
The US State Dept issues the report annually.
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 have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.

2. FATF's designated transactional threshold for Financial Insitutions is _____.
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)

3. Derivatives
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.
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).
Placement - Layering - Integration.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.

4. FATF Recommendation 13
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
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
Banking services between merchant banks and other financial institutions.

5. Commodity Pool Operator
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
As a key tool in detecting suspicious or money laundering activity - it is important because correspondent accounts are often used as conduits to launder criminal proceeds in international settings.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
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.

6. A pyramid scheme is also called...
a chain-referral scheme.
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.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.

7. Free Look Period
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
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'.
no regulatory power or function
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.

8. FCPA (US)
Foreign Corrupt Practices Act
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).
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]
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.

9. FATF Recommendation 27
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
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.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.

10. FATF Recommendation 11
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.
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
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

11. Dematerialization of Securities

12. What the primary objectives of Offshore Group of Banking Supervisors?
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.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
Countries should recognize money laundering as an extraditable offense.
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.

13. Why do companies export their goods at prices far below those in their home country?
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
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.
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
Financial Action Task Force

14. What are the two types of Stored Value Cards?
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
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.
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
Open and Closed system

15. Abusive Squeezes

16. OCC Office of the Comptroller of the Currency
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
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.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.

17. SRO (Self-Regulatory Organizations)
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
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.
Futures contracts - forwards - swaps or options.
The US State Dept issues the report annually.

18. Apostille

19. FATF Recommendation 9
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.
Reliable - independent source of documents - data or information.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.

20. What does FIU do beyond what FIU does?

21. Dormant Account
bear the mark 'APOSTILLE'
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
An account that does not show activity other than the posting of interest or account maintenance fees.

22. What was the target of UN Security Council Resolution 1373?
Confiscation
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
disrupt or adversely afftect the business of the bank.
Terrorism and Terrorist Financing

23. UK courts view on 'Suspicion'
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
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.
2% - 5% ($590B - $1.5T)
tipped off that they are being investigated.

24. Investment Adviser
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Person who - for compensation - provides advice on securities and investments and manages client 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.
People who help move the billions of dollars drug traffickers earn around the world.

25. What is the primary use of a 'Mutual Legal Assistance Treaty'?
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.
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
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.
Review customer files and conduct random sampling of accounts.

26. The Joint Money Laundering Steering Group (UK) has published a series of AML Guidance Notes for different sectors of the financial community. But - As a group of trade associations - it has...
no regulatory power or function
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
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).
Freeze and confiscate terrorist assets.

27. What does FIU do?
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
Take immediate steps to ratify and implement the UN instruments.
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.

28. What are the three main functions of a 'Transfer Agent'?
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
Terrorism and Terrorist Financing
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.

29. How are 'Predicate Crimes' sometimes identified?

30. Who conducts the Financial Sector Assessment Program (FSAP)?
The International Monetary Fund (IMF) and the world bank conduct the joint program.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
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'
A written statement given under oath before an officer of the court - notary public - or other authorized person. Commonly used as the factual basis for an application for a search - arrest or seizure warrant.

31. Structuring is a common technique in jurisdictions that...
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.
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
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]

32. Identification data
Reliable - independent source of documents - data or information.
Money Laundering and Tax Evasion
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.
A US Federal Court

33. Basel committee's 'Customer Due Diligence for Banks' when verifying a unit's compliance with KYC policies and procedures - the home country supervisors or auditors should do what?
Banking services between merchant banks and other financial institutions.
Review customer files and conduct random sampling of accounts.
Funds transfers - Shell Corporations - Contractual Transactions.
The US State Dept issues the report annually.

34. What is a Financial Intelligence Unit?
The opposing part of a transaction or trade.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
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.
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.

35. Credit Card Associations
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
Funds transfers - Shell Corporations - Contractual Transactions.
tipped off that they are being investigated.
Reliable - independent source of documents - data or information.

36. FATF Recommendation 5
foreign correspondent banks
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.
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.

37. A 'Cash Letter' can also be referred to as _____.
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
Pouch activity.
Freeze and confiscate terrorist assets.
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]

38. Guaranteed Introducing Broker

39. Counter Party
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
The opposing part of a transaction or trade.
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
Financial Action Task Force on Money Laundering in South America

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

41. Fraud
a Sr Management level
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
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.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.

42. What normal business practise makes 'Product Division' possible?
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.
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.
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
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.

43. What does a 'Commission Rogatoire' normally specify?
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
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.
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.
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

44. FATF Recommendation 16
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.
Confiscation
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.

45. What was the target of UN Security Council Resolution 1267?
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
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.
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'.

46. FATF Recommendation 8
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.
Direct or indirect advisor on buying and selling futures or commodity options.
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.

47. Three stages of money laundering
Placement - Layering - Integration.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.

48. FATF Recommendation 14
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
Solicits potential customers and issues the credit cards.
Intergovernmental Action Group against Money Laundering in Africa
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.

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...
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
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.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
foreign correspondent banks

50. FATF Sepcial Recommendation on Terrorist Financing -- SR Nine
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.
Report suspicious transactions linked to terrorism.
Firm or person that solicits and accepts commodity futures orders from customers but does not accept funds. Two types of IB_C's: Guaranteed and Independent.
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.