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. 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.
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.
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.


2. FATF Recommendation 25
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
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.
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
Pouch activity.


3. What the primary objectives of Offshore Group of Banking Supervisors?
Solicits potential customers and issues the credit cards.
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.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
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.


4. How do 'Hedge Funds' operate?

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5. What must a financial institution do if they have 'Exempt Accounts'?
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
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.
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.


6. Derivatives
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.
The opposing part of a transaction or trade.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.


7. What does the principal US money laundering law look for before implementing its 'Extraterritorial Reach'?
People who help move the billions of dollars drug traffickers earn around the world.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
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
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.


8. FATF Recommendation 5
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.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.


9. Three stages of money laundering
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 institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
have in place compulsory currency reporting requirements.
Placement - Layering - Integration.


10. FATF Recommendation 11
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
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.
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
Canada


11. Commodity Trading Advisor
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.
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.
Direct or indirect advisor on buying and selling futures or commodity options.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.


12. Short Sale

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13. FATF
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.
Financial Action Task Force
Because it represents funds drawn on the account of a financial institution and not on a particular individual.


14. The IMF estimates that laundered funds compromise ______ of the world's GDP
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.
2% - 5% ($590B - $1.5T)
As a financial institution service that is very vulnerable to money laundering.
A US Federal Court


15. What are the two types of Stored Value Cards?
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.
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'.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
Open and Closed system


16. Legal Arrangements (Insurance Industry)
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
Futures contracts - forwards - swaps or options.
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]
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.


17. What does the 'SEC' (US Securities and Exchange Commission) do?
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
An electronic quotation system that displays quotes of many securities traded over the counter.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.


18. How are 'Predicate Crimes' sometimes identified?

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19. Dematerialization of Securities

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20. What is a Private Investment company (PIC)?
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.


21. FATF Recommendation 27
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
As 'felonies' or 'all offenses in the criminal code'.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
Applied by an authority - it is a special seal which certifies that a document is a true copy of an original. However - it does not and cannot speak to the validity of the document's content.


22. FATF's designated transactional threshold for Financial Insitutions is _____.
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
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).


23. 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
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.
As a financial institution service that is very vulnerable to money laundering.
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'


24. Identification data
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
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.
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.
Reliable - independent source of documents - data or information.


25. FATF Recommendation 35
www.artloss.com
If provided for money laundering to be an internationally extraditable offense.
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.


26. Wire Transfers
Penny Stocks
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.


27. What is the Wolfsberg group?
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
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.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.


28. What is one of the Financial Service Authority's (UK) tasks?
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
To reduce financial crime - including money laundering and terrorit financing.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.


29. What is the Federal Service for Financial Monitoring?
The FIU of Russia
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.
that appear to be linked
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.


30. Who issues the Internationa Narcotics Control Strategy Report (INCSR) and how often?
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
The US State Dept issues the report annually.
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.
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.


31. FATF Recommendation 38
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.
As 'felonies' or 'all offenses in the criminal code'.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
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.


32. What does a 'Commission Rogatoire' normally specify?
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.
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 UN Convention against Transnational Organized Crime [Adopted 12/2000].
Open and Closed system


33. What was the target of UN Security Council Resolution 1373?
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
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.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
Terrorism and Terrorist Financing


34. What does FIU do beyond what FIU does?

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35. Why is 'refining' critical to a money launderer's efforts?
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
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.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)


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

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37. What is the goal of the Egmont group?

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38. FATF Recommendation 22

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39. What does an Extradition Treaty specify?
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]
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.
Provide mutual legal assistance.


40. Money Mules
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.
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
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.


41. White-Collar crime

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42. Why is 'Know Your Customer's Customer' important?
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 enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
Futures contracts - forwards - swaps or options.


43. In Emerging Money Laundering Risks - what 3 areas are associated with 'Contractual Transactions'?
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.
Pouch activity.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
Real Estate - Insurance Transactions - Trade-Based Money Laundering.


44. FATF Recommendation 6
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.


45. Market Manipulation
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.
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.
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.
Open and Closed system


46. FATF Recommendation 17
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
The International Monetary Fund (IMF) and the world bank conduct the joint program.
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.


47. FATF Recommendation 1
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
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.
have in place compulsory currency reporting requirements.
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.


48. FATF Recommendation 20
Financial Action Task Force
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.


49. Underwriting
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
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.
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).
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data


50. Fraud
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
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'.
Take immediate steps to ratify and implement the UN instruments.
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.