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. Legal Arrangements (Insurance Industry)
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
Expatriates sending money back to their home country or by other individuals sending money abroad.
Refers to express trusts or other similar legal arrangements - such as fiducie - treuhand and fideicomiso [FATF Risk-Based approach - Guidance for the Life Insurance Sector - Oct 09]
Stored Value Cards - Mobile Payments - Internet Payments.


2. Cash Letter
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
They can accrue value as the price of the underlying stock rises.
To reduce financial crime - including money laundering and terrorit financing.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.


3. Why is a 'money order' attractive to a money launderer?
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.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
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'
Real Estate - Insurance Transactions - Trade-Based Money Laundering.


4. Credit Card Associations
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
disrupt or adversely afftect the business of the bank.
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.


5. The Palemo Convention
An electronic quotation system that displays quotes of many securities traded over the counter.
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.
Report suspicious transactions linked to terrorism.
The UN Convention against Transnational Organized Crime [Adopted 12/2000].


6. Commodity
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
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.
The FIU of Russia


7. What is private investment company also known as?
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.
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.
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.
Corporate bond that includes an option for the holder to convert it into other securities after a specified period at the discretion of the bondholder.


8. The Vienns Convention
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 UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
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).
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.


9. What the primary objectives of Offshore Group of Banking Supervisors?
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
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.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.


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

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11. (Credit Card) Issuing Bank
disrupt or adversely afftect the business of the bank.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.
Solicits potential customers and issues the credit cards.
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.


12. 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.

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13. Abusive Squeezes

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14. FATF Recommendations examples of non-financial businesses and professions
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.
Strengthen customer identification measures in iternational and domestic wire transfers.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.


15. FATF Recommendation 25
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.
USD/EUR 3 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
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


16. FATF Recommendation 32
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.
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.
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.
Placement - Layering - Integration.


17. Nostro

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18. FATF Recommendation 8
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
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.


19. Basel's 'CDD for Banks' states that the decision to open an account for a PEP should be taken at...
a Sr Management level
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.
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
Casinos - real estate agents - precious metal/stone dealers - lawyers - notaries - accountants and trust & company service providers.


20. Scheme
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.
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
It conducts investigations in support of a government's confiscation or seizure efforts.
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


21. (Stock) Warrants
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
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.
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.


22. Who appoints a 'Federal Receiver' (US)?
A US Federal Court
Harmful or Preferrential Tax Regimes.
no regulatory power or function
Middle East and North Africa Financial Action Task Force


23. What is a Private Investment company (PIC)?
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.
Typical mass-market banking where individual customers use local branches of larger commercial banks.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.


24. What do 'Hedge Funds' attempt to do?
bear the mark 'APOSTILLE'
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
Review customer files and conduct random sampling of accounts.


25. Wholesale Banking
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
Combines funds from various members and users them to trade in futures or options contracts.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
Banking services between merchant banks and other financial institutions.


26. What is the FCPA primarily known for?
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
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).
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.
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).


27. Short Sale

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28. EAG
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
EurAsian Group
The world's largest private DB of stolen art.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.


29. When is a jurisdiction considered to be 'ring-fenced'?
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
Corporate bond that includes an option for the holder to convert it into other securities after a specified period at the discretion of the bondholder.


30. What does a 'Commission Rogatoire' normally specify?
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.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
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.
Countries should recognize money laundering as an extraditable offense.


31. Mutual Fund
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
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.
2% - 5% ($590B - $1.5T)


32. Structuring is a common technique in jurisdictions that...
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.
have in place compulsory currency reporting requirements.
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.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.


33. Agent (Insurance Industry)
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.
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
Middle East and North Africa Financial Action Task Force
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


34. Market Manipulation
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.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
tipped off that they are being investigated.


35. Three stages of money laundering
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).
Placement - Layering - Integration.
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
Direct or indirect advisor on buying and selling futures or commodity options.


36. According to FATF - financial transactions above a designated threshold may include situations where the transaction takes place in a single operation or in several operations...
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.
that appear to be linked
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.


37. Who are the parties involved in a trust?
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
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.
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.


38. Apostille

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39. MENAFATF
Expatriates sending money back to their home country or by other individuals sending money abroad.
Middle East and North Africa Financial Action Task Force
The process of agreeing to purchase a new issue of securities from an issuer and distribute it to investors. The underwriter makes a profit between the price paid to the issuer and the public offering price.
Urge investors to buy 'house stocks' - stocks that the firm buys and sells as a market maker or has in its inventory. Oftentimes - they are running a 'pump-and-dumo' scheme.


40. What tend to be the markings of Private Banking transactions?
The FIU of the UK
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
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.
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.


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
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.
Report suspicious transactions linked to terrorism.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
Harmful or Preferrential Tax Regimes.


42. FATF Recommendation 26
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.
The world's largest private DB of stolen art.
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.


43. UK courts view on 'Suspicion'
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.
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.
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.
The International Monetary Fund (IMF) and the world bank conduct the joint program.


44. FATF Sepcial Recommendation on Terrorist Financing -- SR Nine
Have measures in place to detect the physical corss-border transportation of currency and bearer negotiable instruments - including a declaration system.
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.
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
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.


45. In Emerging Money Laundering Risks - what 3 methods are identified as 'Funds Transfers'?
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.
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.
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
Stored Value Cards - Mobile Payments - Internet Payments.


46. Dormant Account
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.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
An account that does not show activity other than the posting of interest or account maintenance fees.
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.


47. GIABA
Intergovernmental Action Group against Money Laundering in Africa
Account established by a domestic banking institution to receive deposits from - make payments on behalf of - or handle other financial transactions for a foreign financial institution - usually in the foreign financial institutions's cureency.
A market is which securities are bought and sold outside of establisehd securities markets.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.


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

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49. FATF Recommendation 10
Absolutely NOT. If the decision is based purely on profile - then you are discriminating. you need to file such reports on the ACTIVITY especially if it differs from the 'normal and expected' as reflected in the customer profile.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data


50. Guaranteed Introducing Broker

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