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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. May a shell bank maintain a correspondent account with a US bank?
No.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
A contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.

2. 'Introducing Broker-Dealers in Commodities' (IB-C)

3. Who appear to be predominant users of hawalas and other alternative remittance systems?
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.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.
Expatriates sending money back to their home country or by other individuals sending money abroad.

4. Characteristics of an 'Open System Stored Value Card'
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.
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.
Freeze and confiscate terrorist assets.
Expatriates sending money back to their home country or by other individuals sending money abroad.

5. Mutual Fund
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
Foreign Corrupt Practices Act
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.

6. 'Coucil of Europe Convention on Laundering - Search - Seizure and Confiscation of the Proceeds from Crime' is known for what?
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]
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].
They can accrue value as the price of the underlying stock rises.

7. What is the goal of the Egmont group?

8. Counter Party
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
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.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
The opposing part of a transaction or trade.

9. Commodity Pool Operator
Terrorism and Terrorist Financing
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.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.

10. FATF Recommendation 10
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.
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data

11. What does Financial Sector AssessmentProgram (FSAP) do?
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.
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.
disrupt or adversely afftect the business of the bank.
To provide a forum for FIU's (Financial Intelligence Unit) to improve support to their respective national AML progrmans and development protocols for the sharing of information.

12. Fraud
Financial Action Task Force
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
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.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.

13. What do 'Hedge Funds' attempt to do?
To profit all kinds of markets by pursuing leveraging and other speculative investment practises thay may increase the risk of investment loss.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data

14. What do boiler room salespeople typically sell?
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
Penny Stocks
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.

15. What does FIU do?
To reduce financial crime - including money laundering and terrorit financing.
It analyzes and processes information and disseminates it to appropriate government authorities in support of AML efforts and financial crime investigations.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.

16. What is one of the Financial Service Authority's (UK) tasks?
Expatriates sending money back to their home country or by other individuals sending money abroad.
Provide the widest possible range of assistance to other countries' law enforcement and regulatory authorities for terrorist financing investigations.
To reduce financial crime - including money laundering and terrorit financing.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.

17. What does the principal US money laundering law look for before implementing its 'Extraterritorial Reach'?
The grantor (the owner of the property) - a beneficiary and the trustee (the manager of the property).
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
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.

18. FATF Recommendation 12
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
Solicits potential customers and issues the credit cards.
It conducts investigations in support of a government's confiscation or seizure efforts.

19. EAG
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
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.
EurAsian Group
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.

20. What is a 'NCCT'?
Banking services between merchant banks and other financial institutions.
Freeze and confiscate terrorist assets.
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.

21. FATF Sepcial Recommendation on Terrorist Financing -- SR One
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.
Take immediate steps to ratify and implement the UN instruments.
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
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.

22. 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.
Money Laundering and Tax Evasion
Futures contracts - forwards - swaps or options.
bear the mark 'APOSTILLE'

23. Why do convertible bonds oftern have lower interest rates than non-convertible bonds?
A market is which securities are bought and sold outside of establisehd securities markets.
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.
www.artloss.com
They can accrue value as the price of the underlying stock rises.

24. Options/Options Contract
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.
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].
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.
The FIU of Russia

25. What is a Financial Intelligence Unit?
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.
An intelligence gathering law enforcement or regulatory body that receives financial information form covered financial institutions - businesses and persons in tis respective country.
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.

26. What are some of the AML dangers of casino junkets?
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.
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.
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.
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.

27. What does FIU do beyond what FIU does?

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

29. Portfolio Manager
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.
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.
The UN Convention against Transnational Organized Crime [Adopted 12/2000].
Expatriates sending money back to their home country or by other individuals sending money abroad.

30. What are the three main functions of a 'Transfer Agent'?
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.
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
No.
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'.

31. Agent (Insurance Industry)
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.
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.
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

32. FATF Recommendation 1
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
Pouch activity.
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.
As 'felonies' or 'all offenses in the criminal code'.

33. FATF Recommendation 9
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
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.
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
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.

34. FATF Recommendation 17
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
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.
Open and Closed system
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.

35. What is the Serious Organised Crime Agency (SOCA)?
The opposing part of a transaction or trade.
The FIU of the UK
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.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.

36. Why is a 'money order' attractive to a money launderer?
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
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
bear the mark 'APOSTILLE'
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.

37. Structuring is a common technique in jurisdictions that...
have in place compulsory currency reporting requirements.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.
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]
It was the first law in any country to make money laundering a crime.

38. FATF Sepcial Recommendation on Terrorist Financing -- SR Seven
Strengthen customer identification measures in iternational and domestic wire transfers.
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.
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.
Harmful or Preferrential Tax Regimes.

39. FATF Recommendation 39
Financial Action Task Force
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.
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 recognize money laundering as an extraditable offense.

40. Automated Sale
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
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.

41. What is important about the US Money Laundering Control Act (MCLA)?
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
It was the first law in any country to make money laundering a crime.

42. What was the effect of the 1988 Vienna Convention as it relates to extradtition?
A market is which securities are bought and sold outside of establisehd securities markets.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
If provided for money laundering to be an internationally extraditable offense.
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.

43. What normal business practise makes 'Product Division' possible?
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
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 contemporaneous record of the steps - observations - evidence - findings and decisions of an investigation.

44. FATF Recommendation 38
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).
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.
Confiscation
disrupt or adversely afftect the business of the bank.

45. How does the Egmont group help its members?
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).
Review customer files and conduct random sampling of accounts.
foreign correspondent banks
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.

46. What does the 'SEC' (US Securities and Exchange Commission) do?
Typical mass-market banking where individual customers use local branches of larger commercial banks.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
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

47. FATF Recommendation 14
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.
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
Intergovernmental Action Group against Money Laundering in Africa

48. The Vienns Convention
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
Countering the Financing of Terrorism (Counter Terrorist Financing).
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].

49. FATF Sepcial Recommendation on Terrorist Financing -- SR Six
Impose AML requirements on alternative remittance systems.
To promulgate good practices in countering money laundering and to give practical assistance in interpreting the UK Money Laundering Regulations and laws
Money Laundering and Tax Evasion
that appear to be linked

50. FATF Sepcial Recommendation on Terrorist Financing -- SR Two
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.