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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. 'Kiting' via credit card
A US Federal Court
To reduce financial crime - including money laundering and terrorit financing.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.

2. Examples of White-collar crime
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.
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
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.

3. Convertible Preferred
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
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'
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
If provided for money laundering to be an internationally extraditable offense.

4. SRO (Self-Regulatory Organizations)
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.
Stored Value Cards - Mobile Payments - Internet Payments.
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.

5. Who issues the Internationa Narcotics Control Strategy Report (INCSR) and how often?
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
The US State Dept issues the report annually.
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.
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.

6. FATF Recommendation 40
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
Solicits potential customers and issues the credit cards.
no regulatory power or function
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.

7. Why do convertible bonds oftern have lower interest rates than non-convertible bonds?
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
They can accrue value as the price of the underlying stock rises.
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
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.

8. What criterion does the US need to enforce its 'Extraterritorial Reach'?

9. The Palemo Convention
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
Report suspicious transactions linked to terrorism.
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.

10. 'Closed-end Mutual Fund' (Or Comany)

11. FATF Recommendation 4
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
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.

12. What is a 'Trust'?
Financial Action Task Force on Money Laundering in South America
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.
Strengthen customer identification measures in iternational and domestic wire transfers.
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.

13. Three stages of money laundering
Placement - Layering - Integration.
foreign correspondent banks
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).

14. FATF Recommendation 22

15. FATF Recommendation 25
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
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.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws

16. 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.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
As 'felonies' or 'all offenses in the criminal code'.
An electronic quotation system that displays quotes of many securities traded over the counter.

17. FATF Recommendation 9
Issue and cancel securities certificates to reflect chagnes in ownership - act as an intermediary for the issuing company - and hanlde lost - stolen or destroyed certificates.
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.
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.

18. How is 'Identity theft' often accomplished?
Processes transactions for merchants who accept credit cards.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.

19. Corporate Bank

20. The 'Art Loss Register'

21. In Emerging Money Laundering Risks - what 3 methods are identified as 'Funds Transfers'?
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
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.
disrupt or adversely afftect the business of the bank.
Stored Value Cards - Mobile Payments - Internet Payments.

22. FATF Recommendation 37
Countries should establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.
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.
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).
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.

23. Commodity
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.

24. What does FIU do beyond what FIU does?

25. Arrest Warrant
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.
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.
A US Federal Court
No.

26. FATF Recommendation 24
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.
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.
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.

27. Basel committee's 'Customer Due Diligence for Banks' when verifying a unit's compliance with KYC policies and procedures - the home country supervisors or auditors should do what?
It was the first law in any country to make money laundering a crime.
Review customer files and conduct random sampling of accounts.
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.
Money Laundering and Tax Evasion

28. What the primary objectives of Offshore Group of Banking Supervisors?
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.
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].
tipped off that they are being investigated.

29. Agent (Insurance Industry)
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
www.artloss.com
Terrorism and Terrorist Financing
An electronic quotation system that displays quotes of many securities traded over the counter.

30. Mutual Fund
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
Confiscation
Typical mass-market banking where individual customers use local branches of larger commercial banks.
People who help move the billions of dollars drug traffickers earn around the world.

31. FATF Recommendation 16
People who help move the billions of dollars drug traffickers earn around the world.
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.
A US Federal Court
Countries should ensure that there is adequate - accurate and timely information on the beneficial ownership and control of legal persons.

32. What do boiler room salespeople typically do?

33. The Vienns Convention
disrupt or adversely afftect the business of the bank.
Expatriates sending money back to their home country or by other individuals sending money abroad.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].

34. How are 'Predicate Crimes' sometimes identified?

35. Commodity Pool Operator
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.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.

36. 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
that appear to be linked
A fund setup by an investment trust that issues a fixed number of shares to its investors. As such - the market price of the shares fluctuates - often selling at a premium or discount to the fund's net asset value (NAV).
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.

37. Examples of VSP's
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.
foreign correspondent banks
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.

38. How does the Egmont group help its members?
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.
no regulatory power or function
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.

39. What is important about the US Money Laundering Control Act (MCLA)?
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
It was the first law in any country to make money laundering a crime.
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.

40. May a shell bank maintain a correspondent account with a US bank?
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
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.
No.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)

41. MENAFATF
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
EurAsian Group
Middle East and North Africa Financial Action Task Force
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.

42. A pyramid scheme is also called...
Review customer files and conduct random sampling of accounts.
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 chain-referral scheme.
Countries should maintain comprehensive statistics to gauge effectiveness of their AML and CTF efforts.

43. FATF Recommendation 17
If provided for money laundering to be an internationally extraditable offense.
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.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.

44. Affidavit
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
Pouch activity.
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.

45. In Emerging Money Laundering Risks - what 3 areas are associated with 'Contractual Transactions'?
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.
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
Stored Value Cards - Mobile Payments - Internet Payments.
Real Estate - Insurance Transactions - Trade-Based Money Laundering.

46. FATF Recommendation 3
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'
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
Funds transfers - Shell Corporations - Contractual Transactions.
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.

47. FATF Recommendation 6
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
Processes transactions for merchants who accept credit cards.
PEP accounts need to be identified - approved by senior management - and have ongoing enhanced monitoring. Sources of Wealth and funds must also be established.
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.

48. Legal Arrangements (Insurance Industry)
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.
Issue and cancel securities certificates to reflect chagnes in ownership - act as an intermediary for the issuing company - and hanlde lost - stolen or destroyed certificates.
Intergovernmental Action Group against Money Laundering in Africa
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]

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

50. FATF Sepcial Recommendation on Terrorist Financing -- SR Six
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
Terrorism and Terrorist Financing
Impose AML requirements on alternative remittance systems.