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. The Joint Money Laundering Steering Group (UK) has published a series of AML Guidance Notes for different sectors of the financial community. But - As a group of trade associations - it has...
Canada
Competent authorities should have powers of subpoena - search and seizure.
A trust clearly created by the settlor - usually in the form of a document - such as a written deed or trust.
no regulatory power or function


2. FATF Recommendation 19
Direct or indirect advisor on buying and selling futures or commodity options.
Countries should have a central authority to collect suspicious activity and international currency reports. Should have secure - computerized data base.
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
A corporation - often established in an offshore jurisdiction with tight secrecy laws to protect the financial privacy of its owners.


3. Convertible Bond
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.
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.
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.
As a financial institution service that is very vulnerable to money laundering.


4. (Credit Card) Issuing Bank
no regulatory power or function
Solicits potential customers and issues the credit cards.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data


5. Common types of 'Derivatives'
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.
Attorneys - accountants - broker-dealers - communication and transportation providers - bankers and other financial service providers - concealment trap (hiding places) builders etc.
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
Futures contracts - forwards - swaps or options.


6. FATF Recommendation 28
weakness in the implementation of bank programs - ineffective control procedures and failure to practice due diligence.
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
Take immediate steps to ratify and implement the UN instruments.
Competent authorities should have powers of subpoena - search and seizure.


7. Penny Stocks
A prepaid card that is linked to the global funds network - which can allow for worldwide ATM with-drawls and purchases with many merchants.
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.
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.
The International Monetary Fund (IMF) and the world bank conduct the joint program.


8. FATF Recommendation 40
Stored Value Cards - Mobile Payments - Internet Payments.
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.
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.


9. What is the primary use of a 'Mutual Legal Assistance Treaty'?
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
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.
Financial instrument whose price is realted to the underlying commodity - currency - economic variable - financial istrument or security.


10. FCPA (US)
Foreign Corrupt Practices Act
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.
Ad interbank transmittal form - resembling a deposit slip - used to accompany cash and cash equivalent items sent from one bank to another.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)


11. What tend to be the markings of Private Banking transactions?
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
Competent authorities should have powers of subpoena - search and seizure.
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.


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


13. What does theInternationa Narcotics Control Strategy Report (INCSR) entail?
bear the mark 'APOSTILLE'
A detailed report on the narcotics trade and a lengthy narrative on the status of the related money laundering issues in most nations.
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.
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization


14. Short Sale


15. 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.
To take additional steps of examination and caution in identifying their customers and confirming that the customers' activities and funds are legitimate.
Funds transfers - Shell Corporations - Contractual Transactions.
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.


16. Why is 'Know Your Customer's Customer' important?
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.
Respondent banks may be used by other banks and customers to conduct transactions through a correspondent account.
Operator or solicitor of funds for a commodity pool - which combines funds from members and trades futures or options contracts.
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.


17. Who conducts the Financial Sector Assessment Program (FSAP)?
Banking services between merchant banks and other financial institutions.
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.
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.
The International Monetary Fund (IMF) and the world bank conduct the joint program.


18. A public perception that a bank is not able to manage its operational risk effectively can...
Confiscation
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
A merchant submits a saled transaction on his personal bankcard account to ontain cash advances through their business.
disrupt or adversely afftect the business of the bank.


19. CFT
Countries should designate law enforcement authorities with AML/CFT responsibilities and allow them special investigative techniques.
Adopted in 1999 - it imposed sanctions on Taliban-controlled Afghanistan for its support of Osama Bin Laden and the Al-Qaeda organization
Countering the Financing of Terrorism (Counter Terrorist Financing).
Electronic transmissions of funds between financial institutions on behalf of themselves or their customers.


20. What does the 'SEC' (US Securities and Exchange Commission) do?
Take immediate steps to ratify and implement the UN instruments.
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.
Under what authority? Among other things - it regulates brokers and dealers - under authority of the Securities Exchange Act of 1934.
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.


21. FATF Recommendation 29
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'.
A contractual provision that allows the contract owner the right to return the contract within a specified period for a refund.
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.
Supervisors should have powers to monitor and ensure compliance - including the ability to compel production of information and to impose sanctions.


22. FATF Sepcial Recommendation on Terrorist Financing -- SR Two
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.
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]
Criminalize the financing of terrorism - terrorist acts and terrorist organisations.
In many major money laundering operations - it is not unusual to find a complicit employee in financial institution.


23. FATF Recommendation 16
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.
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.
Helps to identify financial system strengths and vulnerabilities and to reduce the potential for crisis.
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.


24. FATF Sepcial Recommendation on Terrorist Financing -- SR One
Take immediate steps to ratify and implement the UN instruments.
bear the mark 'APOSTILLE'
They are businesses such as ariplane - automobile and boat dealers - lawyers - jewelers - real estate brokers and others that are subjec to BSA regulations (US).
Securities with very low marker price - volume and/or liquidity that are traded on a securities exchange or on the OTC markets. They tend to be more volatile than those on the major exchanges.


25. FATF Recommendation 5
An association of global financial institutions that issues guidelines is such areas as correspondent banking - private banking - terrorist financing etc.
Processes transactions for merchants who accept credit cards.
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.
Financial institutions should NOT keep any anonymous or fictionally named accounts - plus they should undertake customer due diligence measures.


26. FATF Recommendation 26
Competent authorities should have powers of subpoena - search and seizure.
To allow for mutual assistance in legal proceedings and access to documents and witnesses and other legal and judicial assistance in the respective countries.
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 establish national centers to receive and disseminate AML/CFT information and have access to law enforcement and others.


27. Distribution Channels (Insurance Industry)
Expatriates sending money back to their home country or by other individuals sending money abroad.
Extending the offense of money laundering to include money laundering associated with all serious offenses - not only with drug trafficking [Adopted 9/90].
High-speed matching of known or suspected patterns in very large DB's using recognition algorithms.
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]


28. FATF Recommendation 35
Countries should recognize money laundering as an extraditable offense.
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
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.
Large companies often export their branded products at wholesale prices far below those at which those products are offered in that country.


29. FATF Recommendation 11
Financial institutions should have AML/CFT programs that include approved policies - employee screenings & ongoing training and an audit function to test it all.
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.
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.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.


30. Nostro


31. What do boiler room salespeople typically do?


32. FATF Recommendation 17
Terrorism and Terrorist Financing
Countries should have effective criminal - civil and administrative sanctions for money laundering or terrorist financing violations.
Countries should criminalize money laundering and apply it to all serious offenses - even if committed in another country.
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.


33. Cash Equivalent


34. Where is the Art Loss Register found?
Assess any international correspondent's bank nature - ownership - management - reputation - supervision and AML & Terrorist Financing controls. Also. document relationship responsibilities.
www.artloss.com
An account that does not show activity other than the posting of interest or account maintenance fees.
The opposing part of a transaction or trade.


35. Mutual Fund
Through the use of experts - the program optimizes expert resources - reduces duplication of efforts and provides uniform advice in financial sector work.
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
A fund - offered by an investment company - that offers shares while investing the capital in diversified securities of other companies.
Middle East and North Africa Financial Action Task Force


36. Transparency International
USD/EUR 15 -000 (Interpretive Note to Reommendations 5 - 12 and 16)
Real Estate - Insurance Transactions - Trade-Based Money Laundering.
Financial institutions should be required - by law or regulation - to report suspicious activity to their national FIU.
Berlin- based - non-governmental organization with goal of improving government accountability and curbing national and international corruption.


37. SRO (Self-Regulatory Organizations)
Competent authorities should be provided with adequate financial - human and technological resources. Personnel should be of high integrity.
Confidentiality - complex beneficial ownership arrangements - offshore investment vehicles - tax shelters and credit extension services.
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.
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data


38. What must a financial institution do if they have 'Exempt Accounts'?
The exempt accounts must be documented and the financial institution that secures the exemptions must still monitor their financial transactions.
Money Laundering and Tax Evasion
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.
October 1980. The instigation of Basel Committee on Banking supervision (with which the group maintains close contact).


39. FATF Sepcial Recommendation on Terrorist Financing -- SR Three
Competent authorities should have powers of subpoena - search and seizure.
Countries should ensure that their competent authorities provide the widest possible range of international cooperation to their foreign counterparts.
Freeze and confiscate terrorist assets.
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.


40. 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.
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.
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.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.


41. Legal Arrangements (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
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]
have in place compulsory currency reporting requirements.
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.


42. FATF Recommendation 10
Record retention: 5 years - data to recreate any individual transaction; 5 years after relationship ends - all customer identification data
Intentional misrepresentation - concealment or omission of the truth for the purpose of deception or manipulation to ther detriment of a person or organization.
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.
A federal regulator in the US - responsible for auditing risk and compliance measuers of federally chartered banks.


43. What does an Extradition Treaty specify?
An order from government authority requiring a financial institution to provide transaction information on a suspect account for a specified period of time.
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.
Ensure that entities - in particular non-profit organizations - cannot be misused to finance terrorism.
The terms of such exchanges - the persons subject to being exchanged - and the crimes for which exchanges will be permitted.


44. In general terms - EDD requires what of a financial institution?


45. FATF Recommendation 2
By acquiring personal information about the victim (e.g: DOB - address - CC numbers) through stealth and misrepresentations.
Countries should ensure that knowledge can be inferred. Additionally - legal persons should be subject to theses laws.
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.
General recommendations for client acceptance - updating client files - practices when identifying unusual or suspicious activity - monitoring - control responsibilities - reporting - education and records retention.


46. FATF Recommendation 12
If one needs to transport currency across borders - one needs to have the smallest package possible to avoid detection.
Entities such as American Express - Master Card and VISA - which license member banks to issue bankcards - authorize merchants to accept those cards - or both.
When residents are prevented from benefiting from a tax-regime or when non-residents are prevented from accessing the domestic market.
The CDD and record-keeping requirements (of Rec 5 - 6 - 8 & 11) apply to non-financial businesses and professions.


47. The Vienns Convention
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
Firm that contracts with issuing or acquiring banks to provide transaction processing and other credit-card related services for the banks.
With respect to STR/SAR reporting - financial institutions should be afforded safe harbor - yet barred from any unauthorized disclosures.
The principal US money laundering law can apply to a non-US citizen if the 'conduct' occurs 'in part' of the US.


48. Why is a 'money order' attractive to a money launderer?
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
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.
Because it represents funds drawn on the account of a financial institution and not on a particular individual.
Preferred stocks that includes an option for the holder to convert it into common stock at a specified covnersion rate.


49. Counter Party
Countries should take immediate steps to become party to and implement fully the relevant international conventions related to AML and CFT efforts.
The UN Convention against Illicit Trafficking in Narcotic drugs and Pyshotropic substances [Adopted 12/88].
The opposing part of a transaction or trade.
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.


50. Market Manipulation
People who help move the billions of dollars drug traffickers earn around the world.
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.
Countries should ensure that secrecy laws do NOT inhibit implementation of these Recommendations.
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.