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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. CFT
Countering the Financing of Terrorism (Counter Terrorist Financing).
The opposing part of a transaction or trade.
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.
Placement - Layering - Integration.

2. What is the aim of Joint Money Laundering Steering Group? (UK)
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.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).

3. Why do convertible bonds oftern have lower interest rates than non-convertible bonds?
They can accrue value as the price of the underlying stock rises.
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
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 world's largest private DB of stolen art.

4. What does FIU do beyond what FIU does?

5. What does FIU do?
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.
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.
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.
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.

6. USA Patriot Act Section 312 'Offshore Bank'
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
EurAsian Group
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.
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.

7. A 'panzi' scheme is named for whom?
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
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.
foreign correspondent banks
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.

8. What is one of the cental stragetic tools required for effective action against 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.
Confiscation
Combines funds from various members and users them to trade in futures or options contracts.
The world's largest private DB of stolen art.

9. FATF Recommendation 3
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
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.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.

10. FATF Recommendation 34
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.

11. FATF Recommendation 32
tipped off that they are being investigated.
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.

12. Scheme
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
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.
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.
Placement - Layering - Integration.

13. Market Manipulation
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
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.
An electronic quotation system that displays quotes of many securities traded over the counter.
have in place compulsory currency reporting requirements.

14. FATF Recommendation 39
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 FIU of the UK
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.
Countries should recognize money laundering as an extraditable offense.

15. FATF Recommendation 5
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
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.
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.

16. When was the Offshore Group of Banking Supervisors established? What was the impetus behind its establishment?
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.
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.
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.

17. Why is a 'money order' attractive to a money launderer?
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
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]
Letters Rogatory
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.

18. Automated Sale
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.
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.
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.
Futures contracts - forwards - swaps or options.

19. How is 'Legal Risk' defined by the 2001 Basel Due Diligence Principles?
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
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.
It was the first law in any country to make money laundering a crime.
Money Laundering and Tax Evasion

20. Why is 'Know Your Customer's Customer' important?
Countries should recognize money laundering as an extraditable offense.
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
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.
It conducts investigations in support of a government's confiscation or seizure efforts.

21. What is a 'Trust'?
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.
Strengthen customer identification measures in iternational and domestic wire transfers.
Stored Value Cards - Mobile Payments - Internet Payments.
Terrorism and Terrorist Financing

22. (Stock) Warrants
Terrorism and Terrorist Financing
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.
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.
Typical mass-market banking where individual customers use local branches of larger commercial banks.

23. Money Mules
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
Review customer files and conduct random sampling of accounts.
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.
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.

24. Example of use of an Apostille
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
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.
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.
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.

25. What the primary objectives of Offshore Group of Banking Supervisors?
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.
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).

26. What is the primary use of a 'Mutual Legal Assistance Treaty'?
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
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.
Financial Action Task Force on Money Laundering in South America

27. What is the significance of 'Non-Financial Trades and Businesses' in realtion to Money Laundering?
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.

28. What are some of the AML dangers of casino junkets?
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.
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.

29. The IMF estimates that laundered funds compromise ______ of the world's GDP
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).
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.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
2% - 5% ($590B - $1.5T)

30. Examples of VSP's
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
Typical mass-market banking where individual customers use local branches of larger commercial banks.
Strengthen customer identification measures in iternational and domestic wire transfers.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.

31. Cash Log

32. 'Closed-end Mutual Fund' (Or Comany)

33. FATF Sepcial Recommendation on Terrorist Financing -- SR Three
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
Freeze and confiscate terrorist assets.
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.
The opposing part of a transaction or trade.

34. What are the three main functions of a 'Transfer Agent'?
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
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).
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
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.

35. 'Commission Rogatoire' known in English as?
Letters Rogatory
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
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.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.

36. FATF Recommendation 29
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
The means through which the insurance products and services are provided to a customer [FATF Risk-Based approach - Guidance for the Life Insurance Sector - Oct 09]
www.artloss.com

37. In what country is the Egmont Group Secretariat now located?
Canada
Solicits potential customers and issues the credit cards.
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.
bear the mark 'APOSTILLE'

38. 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.
have in place compulsory currency reporting requirements.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.

39. FATF Sepcial Recommendation on Terrorist Financing -- SR Seven
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
The nature of the request - the relevant criminal charges in the requesting country - the legal provision under which the request is made - and the information that is sought.
Strengthen customer identification measures in iternational and domestic wire transfers.
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.

40. Pink Sheets
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
Solicits potential customers and issues the credit cards.
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
An electronic quotation system that displays quotes of many securities traded over the counter.

41. FATF Recommendation 2
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
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.
To reduce financial crime - including money laundering and terrorit financing.
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.

42. Commodity Pool
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.
Combines funds from various members and users them to trade in futures or options contracts.
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).

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

44. 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
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.
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.
no regulatory power or function

45. A pyramid scheme is also called...
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
a chain-referral scheme.
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.
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization

46. Underwriting
Solicits potential customers and issues the credit cards.
An account that does not show activity other than the posting of interest or account maintenance fees.
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.
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.

47. Account Monitoring Order (UK and several other countries)
As a financial institution service that is very vulnerable to money laundering.
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.
Intergovernmental Action Group against Money Laundering in Africa
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.

48. FATF Recommendations examples of non-financial businesses and professions
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
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.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.

49. Structuring is a common technique in jurisdictions that...
have in place compulsory currency reporting requirements.
a Sr Management level
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.
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.

50. Foriegn Shell Banks are vehicles for ______ & ______?
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.
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
Money Laundering and Tax Evasion
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.