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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 Sepcial Recommendation on Terrorist Financing -- SR Two
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
Direct or indirect advisor on buying and selling futures or commodity options.
no regulatory power or function

2. FCPA (US)
Foreign Corrupt Practices Act
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.

3. What does FIU do?
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.
a chain-referral scheme.
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
have in place compulsory currency reporting requirements.

4. Pink Sheets
Futures contracts - forwards - swaps or options.
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
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.
An electronic quotation system that displays quotes of many securities traded over the counter.

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

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6. Why is 'refining' critical to a money launderer's efforts?
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'
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
Take expeditious action to requests by foreign countries to identify - freeze - seize and confiscate property that is proceeds of money laundering or a predicate crime.
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)

7. What is the Wolfsberg group?
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
If provided for money laundering to be an internationally extraditable offense.

8. What is the primary use of a 'Mutual Legal Assistance Treaty'?
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'.
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
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.

9. What do boiler room salespeople typically sell?
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
Penny Stocks
Canada
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.

10. Margin
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.
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 arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.

11. May a shell bank maintain a correspondent account with a US bank?
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.
No.
bear the mark 'APOSTILLE'
foreign correspondent banks

12. FATF Recommendation 23
Financial institutions should have adequate supervision and regulation. Ensure no criminal element in position on control. Money transfer/exchangers should be registered and subjected to monitoring.
no regulatory power or function
A market is which securities are bought and sold outside of establisehd securities markets.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.

13. Foriegn Shell Banks are vehicles for ______ & ______?
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.
Money Laundering and Tax Evasion
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.
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)

14. 'Competent Authorities' refers to _____.
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
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
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.
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.

15. As considered by UN and OECD - these are jurisdictions that have no or low tax rates - and do not attract real business or foreign investment
To reduce financial crime - including money laundering and terrorit financing.
Harmful or Preferrential Tax Regimes.
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.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.

16. Retail Banking
Typical mass-market banking where individual customers use local branches of larger commercial banks.
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.
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
no regulatory power or function

17. A pyramid scheme is also called...
While it is normally known as a Personal Investment Company (PIC) - in some jurisdictions - the international business company or exempt company is also the same.
a chain-referral scheme.
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.
tipped off that they are being investigated.

18. Characteristics of an 'Open System Stored Value Card'
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
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.
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.

19. FATF Recommendation 27
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
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.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.

20. What is a Financial Intelligence Unit?
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.

21. FATF Recommendation 39
Foreign Corrupt Practices Act
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
Canada
Countries should recognize money laundering as an extraditable offense.

22. 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...
foreign correspondent banks
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
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.
EurAsian Group

23. (Stock) Warrants
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.
disrupt or adversely afftect the business of the bank.
that appear to be linked
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.

24. What does the principal US money laundering law look for before implementing its 'Extraterritorial Reach'?
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
that appear to be linked
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
They can accrue value as the price of the underlying stock rises.

25. What are the two types of Stored Value Cards?
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.
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
Open and Closed system

26. UK courts view on 'Suspicion'
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 grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
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'.
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.

27. Reverse Flip

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28. FATF Recommendation 24
As a financial institution service that is very vulnerable to money laundering.
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
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.

29. Automated Sale
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
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.
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).
Review customer files and conduct random sampling of accounts.

30. What must a financial institution do if they have 'Exempt Accounts'?
It conducts investigations in support of a government's confiscation or seizure efforts.
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.
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.

31. Dormant Account
An account that does not show activity other than the posting of interest or account maintenance fees.
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
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.
Freeze and confiscate terrorist assets.

32. FATF Recommendation 32
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'.
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
Impose AML requirements on alternative remittance systems.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.

33. A public perception that a bank is not able to manage its operational risk effectively can...
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.
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
disrupt or adversely afftect the business of the bank.
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.

34. Free Look Period
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
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.
have in place compulsory currency reporting requirements.

35. SRO (Self-Regulatory Organizations)
that appear to be linked
Expatriates sending money back to their home country or by other individuals sending money abroad.
Take expeditious action to requests by foreign countries to identify - freeze - seize and confiscate property that is proceeds of money laundering or a predicate crime.
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.

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

37. Who conducts the Financial Sector Assessment Program (FSAP)?
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
disrupt or adversely afftect the business of the bank.
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 International Monetary Fund (IMF) and the world bank conduct the joint program.

38. How do 'Hedge Funds' operate?

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39. Many jurisdictions have legislation to ensure that suspects are not ____?
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
tipped off that they are being investigated.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).

40. How do most governments view Private Banking?
As a financial institution service that is very vulnerable to money laundering.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
The International Monetary Fund (IMF) and the world bank conduct the joint program.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.

41. FATF Recommendation 38
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.
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.
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.
Take expeditious action to requests by foreign countries to identify - freeze - seize and confiscate property that is proceeds of money laundering or a predicate crime.

42. Cash Equivalent

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43. GIABA
Intergovernmental Action Group against Money Laundering in Africa
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.

44. FATF Recommendation 8
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.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
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.
that appear to be linked

45. Convertible Preferred
Provide mutual legal assistance.
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.

46. What can result from on institution's disregard for the Basel Due Diligence Principle?
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
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]
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.

47. How does the Egmont group help its members?
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
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.
Expatriates sending money back to their home country or by other individuals sending money abroad.
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.

48. What does a 'Commission Rogatoire' normally specify?
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
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.
Money Laundering and Tax Evasion

49. What is private investment company also known as?
While it is normally known as a Personal Investment Company (PIC) - in some jurisdictions - the international business company or exempt company is also the same.
Combines funds from various members and users them to trade in futures or options contracts.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
Review customer files and conduct random sampling of accounts.

50. What the primary objectives of Offshore Group of Banking Supervisors?
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
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.
Money Laundering and Tax Evasion
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.