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Certified Anti Money Laundering Specialist Cams

Instructions:

Answer 50 questions in 15 minutes.
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Match each statement with the correct term.
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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 One
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.
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'
Take immediate steps to ratify and implement the UN instruments.
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.

2. FATF's designated transactional threshold for Delaers is Precious metals and / or Precious Stones is _____.
Expatriates sending money back to their home country or by other individuals sending money abroad.
The FIU of Russia
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
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.

3. Market Manipulation
People who help move the billions of dollars drug traffickers earn around the world.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
Competent authorities should have powers of subpoena - search and seizure.
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.

4. Wholesale Banking
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
Banking services between merchant banks and other financial institutions.
Direct or indirect advisor on buying and selling futures or commodity options.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.

5. Nostro
Placement - Layering - Integration.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
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.

6. In Emerging Money Laundering Risks - what 3 areas are associated with 'Contractual Transactions'?
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.
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.
Maintaining correspondent accoutnts at US Financial Institutions (USA Patriot Act)
Real Estate - Insurance Transactions - Trade-Based Money Laundering.

7. Cash Log
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.
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
A record that financial institutions must retain for each cash sale of bank checks - drafts - money orders - cashier's checks and traveller's checks between $3 -000 and $10 -000.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws

8. Fraud
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
A contractual arrangement whereby the trustee manages the property for the benefit of the beneficiary in accordance with the contractual terms set by the grantor.
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.
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.

9. Where is the Art Loss Register found?
www.artloss.com
As a financial institution service that is very vulnerable to money laundering.
Pouch activity.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.

10. Who appear to be predominant users of hawalas and other alternative remittance systems?
Expatriates sending money back to their home country or by other individuals sending money abroad.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
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.
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.

11. Arrest 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.
Court order directing a law enforcement officer to seize and detain a particular person and require them to provide an answer to a compliant or otherqise appear in court.
The 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.
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.

12. Investigative Log
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.
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.
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.

13. What does an Extradition Treaty specify?
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.
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.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.

14. FCPA (US)
Foreign Corrupt Practices Act
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.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
No.

15. Example of use of an Apostille
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
It one wants to open a bank account overseas - but do it through the mail - the bank may need to be assured that the copy of the passport is correct. The Apostille mark can assure this.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
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.

16. FATF Recommendation 20
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
Penny Stocks
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
Typical mass-market banking where individual customers use local branches of larger commercial banks.

17. Who appoints a 'Federal Receiver' (US)?
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.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
A US Federal Court
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.

18. What was the target of UN Security Council Resolution 1267?
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
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'
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.

19. Scheme
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.
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.
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.
that appear to be linked

20. SRO (Self-Regulatory Organizations)
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
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.
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.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.

21. What does the principal US money laundering law look for before implementing its 'Extraterritorial Reach'?
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.
A record that financial institutions must retain for each cash sale of bank checks - drafts - money orders - cashier's checks and traveller's checks between $3 -000 and $10 -000.
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
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.

22. CFT
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
Freeze and confiscate terrorist assets.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
Countering the Financing of Terrorism (Counter Terrorist Financing).

23. EAG
Futures contracts - forwards - swaps or options.
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.
EurAsian Group
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.

24. Cash Letter
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.

25. Free Look Period
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
Take immediate steps to ratify and implement the UN instruments.

26. FATF Recommendation 35
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.

27. A notary can issue a Apostille but it must be in a country that signed The Hague Convention (1961) and it must ___________. If the notary doesn't understand - find another one.
bear the mark 'APOSTILLE'
Financial Action Task Force on Money Laundering in South America
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.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.

28. FATF Recommendation 29
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
As 'felonies' or 'all offenses in the criminal code'.
Placement - Layering - Integration.
The US State Dept issues the report annually.

29. Legal Arrangements (Insurance Industry)
FATF principles should apply to all branches and subsidiaries of a financial institution - even those abroad. Inability to do should re reported to parent institution's regulatory/supervisory authority.
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]
Pouch activity.
foreign correspondent banks

30. FATF Recommendation 12
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.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
To reduce financial crime - including money laundering and terrorit financing.

31. Why is 'refining' critical to a money launderer's efforts?
It conducts investigations in support of a government's confiscation or seizure efforts.
As 'felonies' or 'all offenses in the criminal code'.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
Normally seen as non-violent or involving 'business-related' schemes rather than violent or threat or violence crimes.

32. FATF Recommendation 9
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.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
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.

33. What is the FCPA primarily known for?
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).
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
An electronic quotation system that displays quotes of many securities traded over the counter.
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.

34. A public perception that a bank is not able to manage its operational risk effectively can...
disrupt or adversely afftect the business of the bank.
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]
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
A contractual arrangement whereby the trustee manages the property for the benefit of the beneficiary in accordance with the contractual terms set by the grantor.

35. Mutual Fund
As a financial institution service that is very vulnerable to money laundering.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
A market is which securities are bought and sold outside of establisehd securities markets.
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.

36. Why is it imperative to have a strong Know Your Employee program?
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'
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.
Freeze and confiscate terrorist assets.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.

37. Variable Annuity
Contract issued by an insurance company under which an investor provides the insurer with funds (a lump-sum or series of payments). The insurer then agrees to make periodic payments to the investor starting the immediately or in the future.
Banking services between merchant banks and other financial institutions.
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.
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.

38. Corporate Bank
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.
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.
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
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.

39. Transparency International
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.

40. (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.
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.
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
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.

41. 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
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
Harmful or Preferrential Tax Regimes.
As a financial institution service that is very vulnerable to money laundering.
tipped off that they are being investigated.

42. FATF Recommendation 2
Open and Closed system
a Sr Management level
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.

43. Account Monitoring Order (UK and several other countries)
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data

44. What do boiler room salespeople typically do?
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
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.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.
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.

45. Distribution Channels (Insurance Industry)
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.
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 should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
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.

46. Pink Sheets
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
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.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
An electronic quotation system that displays quotes of many securities traded over the counter.

47. What is the significance of 'Non-Financial Trades and Businesses' in realtion to Money Laundering?
Expatriates sending money back to their home country or by other individuals sending money abroad.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
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.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)

48. FATF Recommendation 36
Provide mutual legal assistance.
Procedures used to determine the identities of the account holders of a respondent bank in a correspondent banking relationship.
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.

49. (Credit Card) Third-Party processor
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
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
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 that secrecy laws do NOT inhibit implementation of these Recommendations.

50. What are the two types of Stored Value Cards?
Freeze and confiscate terrorist assets.
Open and Closed system
Penny Stocks
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.

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