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. What must a financial institution do if they have 'Exempt Accounts'?
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
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.
Combines funds from various members and users them to trade in futures or options contracts.


2. Characteristics of an 'Open System Stored Value Card'
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.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
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
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.


3. FATF Recommendation 33
2% - 5% ($590B - $1.5T)
www.artloss.com
The FIU of the UK
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.


4. FATF Recommendation 29
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
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.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.


5. Reverse Flip

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6. In what country is the Egmont Group Secretariat now located?
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.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.
Canada


7. FATF Recommendation 40
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.


8. 'Loan Back' method. Give example of how it works.

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9. What is the Wolfsberg group?
Banking services between merchant banks and other financial institutions.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.


10. Why is 'Know Your Customer's Customer' important?
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.


11. (Credit card) Acquiring Bank
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
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.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
Processes transactions for merchants who accept credit cards.


12. FATF Sepcial Recommendation on Terrorist Financing -- SR Seven
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.
Strengthen customer identification measures in iternational and domestic wire transfers.
Open and Closed system
Real Estate - Insurance Transactions - Trade-Based Money Laundering.


13. Retail Banking
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
Typical mass-market banking where individual customers use local branches of larger commercial banks.


14. Wholesale Banking
A fund setup by an investment trust in which the number of shares can fluctuate as investors' move in and out the fund. Share prices moves in direct proportion of the net asset value of the underlying investments (no premium or discount).
Middle East and North Africa Financial Action Task Force
Banking services between merchant banks and other financial institutions.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.


15. Dormant Account
Open and Closed system
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]
An account that does not show activity other than the posting of interest or account maintenance fees.
Countering the Financing of Terrorism (Counter Terrorist Financing).


16. What do 'Hedge Funds' attempt to do?
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.
Money Laundering and Tax Evasion
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.


17. What was the effect of the 1988 Vienna Convention as it relates to extradtition?
Financial Action Task Force on Money Laundering in South America
Open and Closed system
If provided for money laundering to be an internationally extraditable offense.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.


18. The IMF estimates that laundered funds compromise ______ of the world's GDP
2% - 5% ($590B - $1.5T)
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]
Strengthen customer identification measures in iternational and domestic wire transfers.
A US Federal Court


19. 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...
Report suspicious transactions linked to terrorism.
no regulatory power or function
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'
Review customer files and conduct random sampling of accounts.


20. Example of use of an Apostille
A US Federal Court
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.
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
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.


21. Margin
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.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
Intergovernmental Action Group against Money Laundering in Africa
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.


22. USA Patriot Act Section 312 'Offshore Bank'
Harmful or Preferrential Tax Regimes.
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 FIU of Russia
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.


23. FATF Sepcial Recommendation on Terrorist Financing -- SR Six
EurAsian Group
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.
Financial Action Task Force
Impose AML requirements on alternative remittance systems.


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

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25. Who conducts the Financial Sector Assessment Program (FSAP)?
The International Monetary Fund (IMF) and the world bank conduct the joint program.
Their financial institution may - wittingly or unwittingly - handle the proceeds of this crime while believing it is serving a legitimate client with major account balances.
The FIU of the UK
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.


26. What does theInternationa Narcotics Control Strategy Report (INCSR) entail?
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
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.
Financial Action Task Force
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.


27. FATF Recommendation 12
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
As a financial institution service that is very vulnerable to money laundering.
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
It was the first law in any country to make money laundering a crime.


28. 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?
Financial Action Task Force on Money Laundering in South America
Review customer files and conduct random sampling of accounts.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.


29. What is one of the cental stragetic tools required for effective action against money laundering?
Banking services between merchant banks and other financial institutions.
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
Confiscation


30. Identification data
It was the first law in any country to make money laundering a crime.
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
Reliable - independent source of documents - data or information.
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.


31. Who issues the Internationa Narcotics Control Strategy Report (INCSR) and how often?
Impose AML requirements on alternative remittance systems.
The US State Dept issues the report annually.
The world's largest private DB of stolen art.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.


32. 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.
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
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


33. FATF's designated transactional threshold for Casinos (including Internet Casinos) is _____.
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
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.


34. How are 'Predicate Crimes' sometimes identified?

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35. Why does a launderer try to run transactions through a concentration account of a financial institution?
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
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).
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
Expatriates sending money back to their home country or by other individuals sending money abroad.


36. What is the aim of Joint Money Laundering Steering Group? (UK)
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
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
An electronic quotation system that displays quotes of many securities traded over the counter.
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.


37. What does the 'SEC' (US Securities and Exchange Commission) do?
Processes transactions for merchants who accept credit cards.
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.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.


38. What is one of the Financial Service Authority's (UK) tasks?
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
To reduce financial crime - including money laundering and terrorit financing.


39. 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...
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
foreign correspondent 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.


40. When is a jurisdiction considered to be 'ring-fenced'?
Banking services between merchant banks and other financial institutions.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
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.


41. Bust-out
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.
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
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.


42. What the primary objectives of Offshore Group of Banking Supervisors?
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
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.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
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.


43. FATF Recommendation 32
Countries should ensure that there is adequate - accurate and timely information on express trusts - including information on the settlor - trustee and beneficiaries.
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
Direct or indirect advisor on buying and selling futures or commodity options.


44. How do most governments view Private Banking?
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.
As a financial institution service that is very vulnerable to money laundering.
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
A market is which securities are bought and sold outside of establisehd securities markets.


45. Examples of White-collar crime
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
As a financial institution service that is very vulnerable to money laundering.
The FIU of the UK
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.


46. FATF Recommendation 7

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47. FATF Recommendation 2
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
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.
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.


48. What is the goal of the Egmont group?

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49. FATF Recommendation 15
It conducts investigations in support of a government's confiscation or seizure efforts.
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.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.


50. What normal business practise makes 'Product Division' possible?
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
A fund setup by an investment trust in which the number of shares can fluctuate as investors' move in and out the fund. Share prices moves in direct proportion of the net asset value of the underlying investments (no premium or discount).
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)