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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. Cash Letter
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.
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.

2. USA Patriot Act Section 312 'Offshore Bank'
A bank whose license has conditions that prohibhit the licensed entity from conducting banking activities with the citizens - or with the local currency - of the country that issued that license.
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.
no regulatory power or function
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.

3. The IMF estimates that laundered funds compromise ______ of the world's GDP
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.
The transfer of physical - hard-copy security certificates to book entry credits of a security holder's interest.
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.
2% - 5% ($590B - $1.5T)

4. FATF Recommendation 15
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Freeze and confiscate terrorist assets.
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. What is the Wolfsberg group?
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
Competent authorities should have powers of subpoena - search and seizure.
Direct or indirect advisor on buying and selling futures or commodity options.
Freeze and confiscate terrorist assets.

6. Variable Annuity
Any item that a bank is wiling to accept for immediate - provisional credit to a customer's account - instantly increasing the account's balance.
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.
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.
a chain-referral scheme.

7. FATF Recommendation 11
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
Financial institutions should pay special attention to (and examine & document) complex - unusual large transactions - and all transactions which have no apparent economic or lawful purpose.
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 institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.

8. 'Open-end Mutual Fund' (or Company)

9. A public perception that a bank is not able to manage its operational risk effectively can...
Placement - Layering - Integration.
Countries should apply Recommendations to any business or profession that poses a money laundering or terrorist financing risk.
disrupt or adversely afftect the business of the bank.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.

10. Why does a launderer try to run transactions through a concentration account of a financial institution?
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.
Direct or indirect advisor on buying and selling futures or commodity options.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.
Financial institutions should pay to any threats from new or developing technologies - especially with non f2f relationships.

11. What is meant by 'Know Your Correspondent Bank'?

12. What is the Federal Service for Financial Monitoring?
The FIU of Russia
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.
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.
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.

13. In what country is the Egmont Group Secretariat now located?
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.
Canada
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
disrupt or adversely afftect the business of the bank.

14. What is the FCPA primarily known for?
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.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.
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).

15. (Stock) Warrants
Terrorism and Terrorist Financing
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.
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 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.

16. What is a Private Investment company (PIC)?
Open and Closed system
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.
Penny Stocks
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.

17. Examples of White-collar crime
An account that does not show activity other than the posting of interest or account maintenance fees.
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.
All admininstrative and law enforcemnt authorities concerned wiht combating money laundering and terrorist financing - including the FIU and supervisors.
Money Laundering - bribery - health care - tax - bankruptcy - securities or environmental frauds etc.

18. Downstream Correspondent Clearer
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
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.
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'
Designated non-financial businesses and professions should be subject to regulatory and supervisory measures. Casinos should prevent criminal ownership - operations or management.

19. Margin
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.
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.
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.
An arrangement whereby an investor pays for part of a securities purchase and borrows the rest from a securities intermediary.

20. What do boiler room salespeople typically do?

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

22. Free Look Period
Review customer files and conduct random sampling of accounts.
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.

23. FATF Recommendation 1
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
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.
No.
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

24. Structuring is a common technique in jurisdictions that...
Customer makes payments on account with bad checks - then takes cash advances before they clear - thereby expanding his credit.
Countries should enable their competent authorities to freeze - seize and confiscate laundered property or proceeds.
Harmful or Preferrential Tax Regimes.
have in place compulsory currency reporting requirements.

25. Nostro

26. EAG
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
EurAsian Group
Competent authorities should have powers of subpoena - search and seizure.
Because they are accounts through which funds are transferred and commingled without personally identifying the originator.

27. Reverse Flip

28. 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.
Freeze and confiscate terrorist assets.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
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.

29. What was the effect of the 1988 Vienna Convention as it relates to extradtition?
If provided for money laundering to be an internationally extraditable offense.
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.

30. FATF Recommendation 5
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.
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.
If provided for money laundering to be an internationally extraditable offense.

31. May a shell bank maintain a correspondent account with a US bank?
No.
The FIU of the UK
The means through which the insurance products and services are provided to a customer [FATF Risk-Based approach - Guidance for the Life Insurance Sector - Oct 09]
The 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.

32. OCC Office of the Comptroller of the Currency
To create new overseas markets - dispose of excess goods - or otherwise recover their costs.
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.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.

33. FATF Recommendation 31
Countries should ensure policy makers - the FIU - law enforcement and supervisors have effective mechanisms to enable cooperation.
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
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.
The possibility that lawsuits adverse judgements or contracts that turn out to be unenforceable can disrupt or adversely affect the operatinos or condition of a financial siutation.

34. Investment Adviser
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
Stored Value Cards - Mobile Payments - Internet Payments.
Person who - for compensation - provides advice on securities and investments and manages client assets.
www.artloss.com

35. FATF Recommendation 19
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
Financial institutions should pay special attention to (and examine & document) complex - unusual large transactions - and all transactions which have no apparent economic or lawful purpose.
The UN Convention against Transnational Organized Crime [Adopted 12/2000].

36. What does the 'SEC' (US Securities and Exchange Commission) do?
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.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
Placement - Layering - Integration.
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]

37. 'Kiting' via credit card
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
Futures contracts - forwards - swaps or options.
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
A firm or person that solicits or accepts orders on futures contracts or commodity options and accepts funds for their execution.

38. Respondent Bank

39. (Credit card) Acquiring Bank
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
Processes transactions for merchants who accept credit cards.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
'Tip Off' a customer that a report has been filed. Failure to maintain confidentiality is a violation of law.

40. FATF Recommendation 35
a chain-referral scheme.
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
The financial institution can become subject to lawsuits from the failure to observe mandatory KYC standards or from the failure to practise due diligence.
no regulatory power or function

41. How is 'Identity theft' often accomplished?
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.
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.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
Council of European committee of Experts on the Evaluation of AML measures and the Financing of Terrorism

42. GIABA
Render mutual legal assistance notwithstanding the absence of dual criminality. Where dual criminality is required - classification should not be an issue.
Intergovernmental Action Group against Money Laundering in Africa
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
Should give special attention to relationships or transactions of people - companies or financial institutions from countries showing little regard for these Recommendations.

43. FATF's designated transactional threshold for Delaers is Precious metals and / or Precious Stones is _____.
An introducing broker-dealer with an exclusive written agreement with a Futures Commission Merchant (FCM) that obligates the FCM to assume responsibility for the introducing broker's performance.
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
Countries should recognize money laundering as an extraditable offense.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)

44. Vital Service Providers (VSPs)
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
Expatriates sending money back to their home country or by other individuals sending money abroad.
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.
People who help move the billions of dollars drug traffickers earn around the world.

45. Fraud
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.
Open and Closed system
Non-Coperative countries and Territories. Country or territory that has been designated by the FATF as non-cooperative with international AML principles and procedures.
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.

46. (Credit Card) Third-Party processor
that appear to be linked
Goods such as food - grains and metals that are usually traded in large amounts on a commodities exchange - usually through future contracts.
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.

47. Corporate Bank

48. Legal Arrangements (Insurance Industry)
Direct or indirect advisor on buying and selling futures or commodity options.
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
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]
It was the first law in any country to make money laundering a crime.

49. Convertible Bond
that appear to be linked
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.
Competent authorities should provide guidelines in applying national AML/CFT measures - especially for detecting and reporting suspicious activity.
The world's largest private DB of stolen art.

50. What does a 'Commission Rogatoire' normally specify?
The nature of the request - the relevant criminal charges in the requesting country - the legal provision under which the request is made - and the information that is sought.
A 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.
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).
Report suspicious transactions linked to terrorism.