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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 24
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
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.
Reliable - independent source of documents - data or information.
Provide mutual legal assistance.

2. Credit Card Associations
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
A market is which securities are bought and sold outside of establisehd securities markets.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.

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

4. Futures Commission Merchant (FCM)
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
Solicits potential customers and issues the credit cards.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.

5. In Emerging Money Laundering Risks - what 3 methods are identified as 'Funds Transfers'?
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
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]
Stored Value Cards - Mobile Payments - Internet Payments.
The UN Convention against Transnational Organized Crime [Adopted 12/2000].

6. A public perception that a bank is not able to manage its operational risk effectively can...
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]
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.
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.
disrupt or adversely afftect the business of the bank.

7. USA Patriot Act Section 312 'Offshore Bank'
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
Middle East and North Africa Financial Action Task Force
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.
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.

8. Examples of White-collar crime
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.

9. Downstream Correspondent Clearer
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
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.
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.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.

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

11. The 'Art Loss Register'

12. CFT
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.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
A US Federal Court
Countering the Financing of Terrorism (Counter Terrorist Financing).

13. The Palemo Convention
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.
Financial Action Task Force
EurAsian Group
The UN Convention against Transnational Organized Crime [Adopted 12/2000].

14. Short Sale

15. What are the three main functions of a 'Transfer Agent'?
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).
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
foreign correspondent banks
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.

16. Abusive Squeezes

17. Three stages of money laundering
Placement - Layering - Integration.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
no regulatory power or function
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.

18. Identification data
Reliable - independent source of documents - data or information.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
Placement - Layering - Integration.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.

19. MENAFATF
Typical mass-market banking where individual customers use local branches of larger commercial banks.
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.
Middle East and North Africa Financial Action Task Force
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.

20. 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.
EurAsian Group
Expatriates sending money back to their home country or by other individuals sending money abroad.
A market is which securities are bought and sold outside of establisehd securities markets.

21. FATF Recommendation 1
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
Open and Closed system
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.

22. FATF Recommendation 30
Take immediate steps to ratify and implement the UN instruments.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
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.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.

23. FATF Recommendation 33
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.

24. FATF Recommendation 2
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
Canada
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.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.

25. Distribution Channels (Insurance Industry)
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]
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.
Combines funds from various members and users them to trade in futures or options contracts.
Impose AML requirements on alternative remittance systems.

26. FATF Recommendation 35
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
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.
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
If provided for money laundering to be an internationally extraditable offense.

27. What does FIU do beyond what FIU does?

28. Where is the Art Loss Register found?
www.artloss.com
An electronic quotation system that displays quotes of many securities traded over the counter.
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.
It conducts investigations in support of a government's confiscation or seizure efforts.

29. Why do companies export their goods at prices far below those in their home country?
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
Funds transfers - Shell Corporations - Contractual Transactions.
Penny Stocks
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.

30. What is the goal of FSAP?
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
no regulatory power or function
The International Monetary Fund (IMF) and the world bank conduct the joint program.
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.

31. FATF Recommendation 40
To reduce financial crime - including money laundering and terrorit financing.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
People who help move the billions of dollars drug traffickers earn around the world.
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

32. What is the goal of the Egmont group?

33. Many jurisdictions have legislation to ensure that suspects are not ____?
tipped off that they are being investigated.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.

34. May a shell bank maintain a correspondent account with a US bank?
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
No.

35. Investigative Log
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
Strengthen customer identification measures in iternational and domestic wire transfers.

36. FATF Recommendation 25
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
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.
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
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.

37. FATF Recommendation 31
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
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.
Strengthen customer identification measures in iternational and domestic wire transfers.
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.

38. Automated Sale
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.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
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.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.

39. How is 'Identity theft' often accomplished?
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.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
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.

40. What does a 'Commission Rogatoire' normally specify?
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
Terrorism and Terrorist Financing
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.

41. FCPA (US)
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).
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.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
Foreign Corrupt Practices Act

42. Underwriting
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.
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.
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.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.

43. (Credit Card) Third-Party processor
that appear to be linked
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.
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.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.

44. Convertible Preferred
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 corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
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'
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.

45. What does the principal US money laundering law look for before implementing its 'Extraterritorial Reach'?
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
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

46. What is important about the US Money Laundering Control Act (MCLA)?
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.
Impose AML requirements on alternative remittance systems.
It was the first law in any country to make money laundering a crime.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.

47. FATF Recommendation 23
The International Monetary Fund (IMF) and the world bank conduct the joint program.
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.
Combines funds from various members and users them to trade in futures or options contracts.
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).

48. Convertible Bond
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
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.
Review customer files and conduct random sampling of accounts.
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.

49. What can result from on institution's disregard for the Basel Due Diligence Principle?
EurAsian Group
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.

50. What do 'Hedge Funds' attempt to do?
The FIU of the UK
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
Funds transfers - Shell Corporations - Contractual Transactions.