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ACAMS Vocabulary Exam 113 Questions with Verified Answers,100% CORRECT

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ACAMS Vocabulary Exam 113 Questions with Verified Answers Account monitoring order - CORRECT ANSWER ____ _____ ____ : In the United Kingdom and several other countries, an order from a government... authority requiring a nancial institution to provide transaction information on a suspect account for a speci ed time period. Affadavit - CORRECT ANSWER _____ : A written statement given under oath before an of cer of the court, notary public, or other authorized person. It is commonly used as the factual basis for an application for a search, arrest or seizure warrant. Alternative Remittance System - CORRECT ANSWER ____ ____ ____ : Underground banking or informal value transfer systems. Often associated with ethnic groups from the Middle East, Africa or Asia, and commonly involves the transfer of values among countries outside of the formal banking system. The remittance entity can be an ordinary shop selling goods that has an arrangement with a correspondent business in another country. There is usually no physical movement of currency and a lack of formality with regard to veri cation and record- keeping. The money transfer takes place by coded information that is passed through chits, couriers, letters or faxes, followed by telephone con rmations. Almost any document that carries an identi able number can be used by the receiver to pick up the values in the other country. The systems are referred to by different names depending upon the country: Hawala (an Arabic word meaning "change" or "transform"), Hundi (a Hindi word meaning "collect"), Chiti banking (referring to the way the system operates), Chop Shop banking (China), and Poey Kuan (Thailand). Anti-Money Laundering International Database - CORRECT ANSWER ____-____ ____ ____ ____ : A compendium of analyses of anti-money laundering laws and regulations, including two general classes of money laundering control measures—domestic laws and international cooperation—as well as information on national contacts and authorities. A secure, multilingual database, AMLID is an important reference tool for law enforcement of cers involved in cross-jurisdictional work. (See www.imolin.org/amlid/index.html.) Anti-Money Laundering Program - CORRECT ANSWER ____-____ ____ ____ : The system designed to assist institutions in their ght against money laundering and terrorist nancing. In many jurisdictions, government regulations require nancial institutions, including banks, securities dealers and money services businesses, to establish such programs. At a minimum, the anti-money laundering program should include: 1. Written internal policies, procedures and controls; 2. A designated AML compliance of cer; 3. On-going employee training; and 4. Independent review to test the program. Arrest Warrant - CORRECT ANSWER ____ ____: A court order directing a law enforcement of cer to seize and detain a particular person and require them to provide an answer to a complaint or otherwise appear in court. Asia/Pacific Group - CORRECT ANSWER ____ /____ ____ A Financial Action Task Force (FATF)-style regional body consisting of jurisdictions in the Asia/Paci c Region. See www.apgml.org. Asset Manager - CORRECT ANSWER ____ _____: A person appointed through a written contract by a company or trust to direct the entity's investment program. The program can be a fully discretionary account, or the contract can impose limitations on it. Fees to the ____ ____ can be based on performance achieved, trading commissions or a percentage of the valuation of the estate under his or her management. High fees and a close relationship with the owners or beneficiaries can expose the ____ ____ to potential con icts between a duty to report unusual or suspicious activity and the duciary duty to the client. Asset Protection - CORRECT ANSWER ____ ____: A process that includes reorganizing how assets are held so as to make them less vulnerable should a claim be made against a person. ____is also a term used by tax planners for measures taken to protect assets from taxation in other jurisdictions. Asset Protection Trusts - CORRECT ANSWER ____ ____ ____ : A special form of irrevocable trust usually created (i.e., settled) offshore for the principal purposes of preserving and protecting part of one's wealth from creditors. Title to the asset is transferred to a person named the trustee. ____s are generally used for asset protection and are usually tax neutral. Their ultimate function is to provide for the bene ciaries. Some proponents advertise ____s as allowing foreign trustees to ignore U.S. court orders and to simply transfer the trust to another jurisdiction in response to legal action threatening the trust's assets (so-called " ying trusts"). Automated Clearing House - CORRECT ANSWER ____ ____ ____: An electronic banking network that processes large volumes of both credit and debit transactions that originate in batches. ____ credit transfers include direct deposit payroll payments and payments to contractors and vendors. ____ debit transfers include consumer payments on insurance premiums, mortgage loans and other kinds of expenses. The system is used for bulk orders made days in advance—for example, a large corporation's entire payroll. Both governments and commercial sectors can use the ____ system. The ____ system was designed to transfer a high volume of low-dollar domestic transactions, which pose lower money laundering risks. Nevertheless, the ability to send high-dollar and international transactions through the ____ may expose nancial institutions to higher money laundering risks. Firms without a robust AML monitoring system may be exposed to additional risk, particularly when accounts are opened over the Internet without face-to-face contact. Bank Draft - CORRECT ANSWER ___ ___: Vulnerable to money laundering because it represents a reputable international monetary instrument drawn on a reputable institution, and is often made payable—in cash— upon presentation and at the issuing institution's account in another country. Bank for International Settlements - CORRECT ANSWER ____ ___ ____ ____: An international organization that serves as a bank for central banks and which fosters international monetary and nancial cooperation with the purpose of attaining stability in the world economy. It hosts the Secretariat of the Basel Committee on Banking Supervision. The Committee has formulated broad supervisory standards and guidelines on Know Your Customer issues. See www.bis.org. Bank Secrecy - CORRECT ANSWER ___ ___ ___: Refers to laws and regulations in countries that prohibit banks from disclosing information about an account—or even revealing its existence—without the consent of the account holder. Impedes the ow of information across national borders among nancial institutions and their supervisors. One of FATF's 40 Recommendations states that countries should ensure that secrecy laws do not inhibit the implementation of the FATF Recommendations. Bank Secrecy Act - CORRECT ANSWER ___ ___ ___ : The primary U.S. anti-money laundering regulatory statute (Title 31, U.S. Code Sections 5311-5355) enacted in 1970 and most notably amended by the USA Patriot Act in 2001. Among other measures, it imposes money laundering controls on nancial institutions and many other businesses, including the requirement to report and to keep records of various nancial transactions. Bank Secrecy Act Compliance Program - CORRECT ANSWER ___ ___ ___ ___ ____ : A program that U.S.-based nancial institutions—as de ned by the Bank Secrecy Act—are required to establish and implement in order to control money laundering and related nancial crimes. The program's components include at a minimum: the development of internal policies, procedures and controls; the designation of a compliance of cer; ongoing employee training; and an independent audit function to test the program. Bare Trust - CORRECT ANSWER ____ ____: Also known as a dry, formal, naked, passive, or simple trust, in which the trustees have no duties other than to convey the trust property to bene ciaries when called upon to do so. ___ ____s are vulnerable to money laundering because the nal bene ciary is unknown. Basel CDD Paper - CORRECT ANSWER ____ ___ ____: A guidance paper on Customer Due Diligence (CDD) for banks issued by the Basel Committee on Banking Supervision (BCBS) in October 2001. The paper includes sound Know Your Customer policies and procedures that, according to the Committee, are critical to protecting the safety and soundness of banks and the integrity of banking systems. In February 2003, the Basel Committee on Banking Supervision issued "General Guide to Account Opening and Customer Identi cation." This document is an attachment to the Basel CDD Paper. See www.bis.org/bcbs. Basel Committee on Banking Supervision - CORRECT ANSWER _____ ____ __ ____ ____ The ___ was established by the G-10's central bank of governors in 1974 to promote sound supervisory standards worldwide. Its secretariat is appointed by the Bank for International Settlements in Basel, Switzerland. It has issued, among others, papers on customer due diligence for banks, consolidated KYC risk management, transparency in payment messages, due diligence and transparency regarding cover payment messages related to cross-border wire transfers, and sharing of nancial records among jurisdictions in connection with the ght against terrorist nancing. See www.bis.org/bcbs. Batch Processing - CORRECT ANSWER _____ ____: A type of data processing and data communications transmission in which related transactions are grouped together and transmitted for processing, usually by the same computer and under the same application. Batch Transfer - CORRECT ANSWER ____ ____: Transfer comprising a number of individual wire transfers that are sent to the same nancial institution, and which may be ultimately intended for different persons. Bearer Form - CORRECT ANSWER ____ ____ : In relation to a certi cate, share transfer or other document, a ____ ____ enables a designated investment or deposit to be sold, transferred, surrendered or addressed to a bearer without the need to obtain further written instructions. Bearer Negotiable Instruments - CORRECT ANSWER ____ ____ ____ : Include monetary instruments in bearer form such as: negotiable instruments (including checks, promissory notes and money orders) that are either in bearer form, are endorsed without restriction, are made out to a ctitious payee, or are otherwise in such form that title thereto passes upon delivery. Bearer Share - CORRECT ANSWER _____ _____ : Negotiable instruments that accord ownership in a corporation to the person who is in physical possession of the _____ certi cate. Bearer Share Certificate - CORRECT ANSWER ____ ____ ____ : A negotiable corporate share certi cate made out to "Bearer" and not in the name of an individual or organization. Benami Account - CORRECT ANSWER _____ ____ : Also called a nominee account. Held by one person or entity on behalf of another or others, ______ are associated with the hawala underground banking system of the Indian subcontinent. A person in one jurisdiction seeking to move funds through a hawaladar to another jurisdiction may use a _____ or _____ transaction to disguise his/her true identity or the identity of the recipient of the funds. Beneficial Owner - CORRECT ANSWER ____ ____ : The natural person who ultimately owns or controls an account through which a transaction is being conducted. It also incorporates those persons who exercise ultimate effective control over a legal person or arrangement. Beneficiary - CORRECT ANSWER ____ ____ : All trusts (other than charitable or statutory-permitted non- charitable trusts) must have _____s, which may include the settlor. Trusts must also include a maximum time frame, known as the "perpetuity period," which normally extends up to 100 years. While trusts must always have some ultimately ascertainable _____, they may have no de ned existing _____s. Trusts may only have objects of a power until some person becomes entitled as _____ to income or capital on the expiry of a de ned period, known as the "accumulation period." The latter period is normally co- extensive with the trust perpetuity period, which is usually referred to in the trust deed as the "trust period." Biometrics - CORRECT ANSWER _____ : The science of identifying features that distinguish one person from another. Fingerprinting, voice recognition and iris (eye) scans are three forms of biometrics technology that may someday render pen-to-paper signatures outdated. Certain institutions use ____ to verify the identity of their customers. With the advent of customer identi cation regulations, ____ tools may become more common in financial institutions. Black Market Peso Exchange - CORRECT ANSWER ____ ____ ____ ____ : The Colombian ____ is an example of a complex method of trade-based money laundering. The BMPE originally was driven by Colombia's restrictive policies on currency exchange. To circumvent those policies, Colombian businesses bypassed the government levies by dealing with peso brokers that dealt in the black market or parallel nancial market. Colombian drug traf ckers took advantage of this method to receive Colombian pesos in Colombia in exchange for U.S. drug dollars located in the United States. According to the U.S. State Department's 2007 INCSR, similar black market exchange systems are found in Venezuela and in the tri-border region of Argentina, Brazil, and Paraguay. Trade goods in Dubai, as well as Chinese and European manufactured trade items, are being purchased through narcotics-driven systems similar to the ____. The ____ system operates through brokers who purchase narcotics proceeds in the United States from the cartels and transfer pesos to the cartels from within Colombia. The dollars are placed — that is, "laundered" — into the United States nancial system by the peso broker without attracting attention. The dollars are then "sold" by the brokers to businessmen in Colombia (or other country) who need dollars to buy United States goods for export. Goods ready for export are often actually paid for by the peso broker, using the purchased narcotics dollars, on behalf of the Colombian (or other country's) importer. Blank Check Company - CORRECT ANSWER ____ ____ ____ : A type of company designed to be used by private corporations intending to issue publicly traded shares through "reverse mergers" without the high expenses involved in making their own initial public offering. _____s often have few assets, engage in little business activity, and have no business plan or experienced management. Bookmaker - CORRECT ANSWER _____ : A ____ accepts bets from individuals on a variety of matters, mostly sporting events. _____ are vulnerable to money laundering, since launderers may offer their customers money for winning betting slips, often 7 to 10 percent above the value of the winnings. The launderer then collects clean money from the ____. Branch - CORRECT ANSWER ____ : A place of business that forms a legally dependent part of a nancial institution and carries out directly all or some of the transactions inherent in the business of that financial institution. Bureau de Change - CORRECT ANSWER ____ __ ____ : Also called "casa de cambio" or "exchange of ce," a ____ offers a range of services that are attractive to money launderers: currency exchange and consolidation of small denomination bank notes into larger ones; exchange of financial instruments such as travelers checks, money orders and personal checks; and telegraphic transfer facilities. In some countries, such businesses are not as heavily scrutinized for money laundering as are traditional financial institutions. Also, their customers are often occasional, making it more dif cult for these businesses to "know their customers." Bust Out - CORRECT ANSWER ____-___ : A scheme in which the use or extension of credit is obtained and is increased fraudulently while the perpetrators avoid having to pay back the illegally obtained credit or goods. Typically, a ____ ring will operate a shell or front business that accepts credit purchases on stolen or fraudulently obtained credit cards. The criminals run the cards or numbers through credit card terminals, but either do not provide any goods or services or provide stolen or non-licensed goods. The innocent credit card company credits the account of the front business. Before the transactions can be reversed, the criminals have moved the funds from the accounts of the front business. The cardholders who knowingly participate in these ____ schemes generally refuse to pay the credit card companies for their "purchases." These people have either obtained cards with fraudulent or stolen identi cation or otherwise cannot be found. ____ schemes have been very popular in creating large bankruptcy frauds in which business entities secure loans in excess of the actual value of the company or property and then disappear with the money, leaving the lender to take a substantial loss. Cardholder - CORRECT ANSWER ____ : Person to whom a financial transaction card is issued, or an additional person authorized to use the card. Caribbean Financial Action Task Force - CORRECT ANSWER ____ ____ ____ ____ ____ : A FATF-style regional body comprising Caribbean states, including Aruba, the Bahamas, the British Virgin Islands, the Cayman Islands and Jamaica. See www.cfatf.org. Casa de Cambio - CORRECT ANSWER _____ __ ____ : Also called "____" or "exchange of ce," a bureau de change offers a range of services that are attractive to money launderers: currency exchange and consolidation of small denomination bank notes into larger ones; exchange of nancial instruments such as travelers checks, money orders and personal checks; and telegraphic transfer facilities. In some countries, such businesses are not as heavily scrutinized for money laundering as are traditional nancial institutions. Also, their customers are often occasional, making it more dif cult for these businesses to "know their customers." Cash Based Business - CORRECT ANSWER ____-____ _____ : Any business in which customers usually pay with cash for the products or services provided, such as restaurants, pizza delivery services, taxi rms, coin-operated machines or car washes. Some money launderers run or use ____s to commingle illegally obtained funds with cash actually generated by the business. Cash Collateralized Loans - CORRECT ANSWER ____ ____ ____ : A ____ has cash deposits as the loan's collateral. The cash deposits can sometimes reside in another jurisdiction. Cash Deposits - CORRECT ANSWER ____ ____ : Sums of money placed in a financial institution's accounts. Vulnerable to money laundering in the "placement phase," as criminals move their cash into the non-cash economy by making deposits into accounts at nancial institutions. Cashier's Check - CORRECT ANSWER ____ ____ : Common monetary instrument often purchased with cash. Used for laundering purposes, ____s provide an instrument drawn on a reputable institution, such as a bank or credit union. CDD - CORRECT ANSWER ____ : See Customer Due Diligence. CDPC - CORRECT ANSWER ____ : (French: Comité Européen pour les Problèmes Criminels) European Committee on Crime Problems of the Council of Europe. A subcommittee of the ____ is MONEYVAL, formerly PC-R-EV, the select committee of experts on the evaluation of anti-money laundering measures in European countries that are not members of FATF. Certification - CORRECT ANSWER _____ : A formal assertion in writing which, under the USA Patriot Act, is used by U.S. regulators in different contexts, including a written statement by a respondent bank signed by its duly authorized representative certifying that the bank does not do business with shell banks (under Section 313 of the USA Patriot Act). It can also be a written representation provided by a U.S. federal agent stating that the matter for which he or she is seeking information from nancial institutions under Sec. 314(a) of the USA Patriot Act regulations is linked to money laundering or terrorist financing. Chain Referral Scheme - CORRECT ANSWER ____ ____ ____ : See Pyramid Scheme. Chiti Banking - CORRECT ANSWER ____ ____ : See Alternative Remittance System. Chop Shop Banking - CORRECT ANSWER ____ ____ ____ : See Alternative Remittance System. CICAD - CORRECT ANSWER ____ : (Spanish: Comisión Interamericana para el Control del Abuso de Drogas) See Organization of American States—Inter-American Drug Abuse Control Commission. Clearing Account - CORRECT ANSWER ____ ____ : Also called an "omnibus" or "concentration account." Held by a nancial institution in its name, a ____ is used primarily for internal administrative or bank-to-bank transactions in which funds are transmitted and commingled without personally identifying the originators. The USA Patriot Act prohibits the use of such accounts for customer transactions. Collection Accounts - CORRECT ANSWER ____ ___ : Immigrants from foreign countries deposit many small amounts of currency into one account where they reside, and the collected sum is transferred to an account in their home country without documentation of the sources of the funds. Certain ethnic groups from Asia or Africa may use collection accounts to launder money. Collective Knowledge - CORRECT ANSWER ____ ____ : The sum of the knowledge held separately by a nancial institution's directors, of cers and employees regarding a certain issue, customer or account. The notion of collective knowledge can be used to suggest corporate responsibility for compliance and liability for non-compliance. For example, the nancial institution's knowledge is the totality of what all of the employees know within the scope of their employment. So, if Employee A knows one facet of a customer's information, B knows another facet of it, and C a third facet of it, the institution knows all the facets of the customer's information. Commission Rogatoire - CORRECT ANSWER ____ ____ : Also known as letters rogatory, commission rogatoires are written requests for legal or judicial assistance sent by the central authority of one country to the central authority of another when seeking evidence from the foreign jurisdiction. The letter typically speci es 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 sought. Concentration Account - CORRECT ANSWER ____ ____ : See Clearing Account. Concentration Risk - CORRECT ANSWER ____ ____ : _____ ____ primarily applies to the asset side of the balance sheet. As a common practice, supervisors not only require banks to have information systems to identify credit concentrations, but also set limits to restrict bank exposure to single borrowers or groups of related borrowers. Without knowing exactly who the customers are (through Know Your Customer policies) and their relationship with other customers, the bank is not able to measure its ____ ____, which is particularly relevant in the context of related counter-parties and connected lending. On the liability side, concentration risk is associated with funding risk, especially the risk of early and sudden withdrawal of funds by large depositors that could harm an institution's liquidity. CDD - CORRECT ANSWER ____ : See Customer Due Diligence. CDPC - CORRECT ANSWER ____ : (French: Comité Européen pour les Problèmes Criminels) European Committee on Crime Problems of the Council of Europe. A subcommittee of the ____ is MONEYVAL, formerly PC-R-EV, the select committee of experts on the evaluation of anti-money laundering measures in European countries that are not members of FATF. Certification - CORRECT ANSWER _____ : A formal assertion in writing which, under the USA Patriot Act, is used by U.S. regulators in different contexts, including a written statement by a respondent bank signed by its duly authorized representative certifying that the bank does not do business with shell banks (under Section 313 of the USA Patriot Act). It can also be a written representation provided by a U.S. federal agent stating that the matter for which he or she is seeking information from nancial institutions under Sec. 314(a) of the USA Patriot Act regulations is linked to money laundering or terrorist financing. Chain Referral Scheme - CORRECT ANSWER ____ ____ ____ : See Pyramid Scheme. Chiti Banking - CORRECT ANSWER ____ ____ : See Alternative Remittance System. Confidentiality - CORRECT ANSWER ____ : Keeping certain facts, data and information out of public or unauthorized view. In the U.S., U.K. and many other jurisdictions, con dentiality is required when ling suspicious transaction or activity reports — the ling institution's employees cannot notify a customer that a report has been led. In another context, a breach of con dentiality can occur when an institution discloses client information to enforcement agencies or a nancial intelligence unit in violation of the jurisdiction's bank secrecy laws. Confiscation - CORRECT ANSWER ____ : Includes forfeiture where applicable, and means the permanent deprivation of funds or other assets by order of a competent authority or a court. Con scation or forfeiture takes place through a judicial or administrative procedure that transfers the ownership of speci ed funds or other assets to the state. Upon transfer, the person(s) or entity(ies) that held an interest in the speci ed funds or other assets at the time of the con scation or forfeiture lose all rights, in principle, to the con scated or forfeited assets. Con scation or forfeiture orders are usually linked to a criminal conviction or a court decision whereby the con scated or forfeited property is determined to have been derived from or intended for use in a violation of the law. Con scation is a central strategic tool that is required in order to take effective action against money laundering and terrorist nancing. It is crucial that criminal justice systems make provisions for ef cient and effective methods of tracing, freezing and eventually con scating proceeds of criminal activity. Mutual legal assistance treaties can provide for con scation of assets in one jurisdiction based upon prosecutions elsewhere. Constructive (Involuntary) Trust Liability - CORRECT ANSWER ____ (____) ____ ____ : The imposition of trustee obligations upon a nancial institution deemed to "know" that property in its possession belongs to a person other than its client. A nancial institution can face the risk of breach of trust if it handles or transfers the funds in a manner detrimental to the interests of the rightful owner. Anti-money laundering specialists should be especially vigilant when there is suspicion that funds may have been derived from a victim of crime, resulting in the victim's loss of funds or property. Core Principles - CORRECT ANSWER ____ ____ : ____ ____ for Effective Banking Supervision issued by the Basel Committee on Banking Supervision, the Objectives and Principles for Securities Regulation issued by the International Organization of Securities Commissions, and the Insurance Supervisory Principles issued by the International Association of Insurance Supervisors. Corporate Vehicles - CORRECT ANSWER ____ ____ : Defined in FATF's Consultation Paper as: 1. Corporations: (a) Private limited companies and public limited companies whose shares are not traded on a stock exchange. (b)International business companies/exempt companies. 2. Trusts. 3. Foundations. 4. Limited partnerships and limited liability partnerships. Occasionally it is dif cult to identify the persons who are the ultimate bene cial owners and controllers of corporate vehicles, which makes the vehicles vulnerable to money laundering. FATF has several recommendations that deal with customer due diligence on corporate vehicles and the transparency and bene cial ownership of legal persons and arrangements. Correspondent Banking - CORRECT ANSWER ____ ____ : The provision of banking services by one bank (the "correspondent bank") to another bank (the "respondent bank"). Large international banks typically act as correspondents for thousands of other banks around the world. Respondent banks may be provided with a wide range of services, including cash management (e.g., interest-bearing accounts in a variety of currencies), international wire transfers of funds, check clearing services, payable-through accounts and foreign exchange services. Council of Europe Convention on Laundering, Search, Seizure and Con scation of the Proceeds from Crime - CORRECT ANSWER _____ __ ____ ____ __ ____, ____, ____ ___ ___ ____ __ ___ ____ ____ ____ The Convention was adopted by the Committee of Ministers of the Council of Europe in September 1990, which addressed all types of criminal offenses and thereby has greater impact than the Vienna Convention. The offense of money laundering was extended to include money laundering associated with all serious offenses, not just drug traf cking. In May 2005, a revised convention was adopted. Counter-Terrorism Committee - CORRECT ANSWER ____-____ ____ A United Nations Committee established in 2001 pursuant to Security Council Resolution 1373 (2001). Concerning counter- terrorism, the CTC consists of all 15 Security Council members. The committee monitors the implementation of UN Security Council Resolution 1373, and aims to increase the capacity of member states to ght terrorism nancing. Credit Cards - CORRECT ANSWER ____ ____ : A plastic card with a credit limit used to purchase goods and services and to obtain cash advances on credit. The cardholder is subsequently billed by the issuer for repayment of the credit extended. Credit cards may be used to launder money when payments of the amounts owed on the card are made with criminal money. Credit Finance - CORRECT ANSWER ____ ____ The use of credit to buy expensive items, and the subsequent payment of the borrowed credit with criminal funds. The criminal borrows funds to purchase a high value asset, such as a yacht, Criminal Proceeds - CORRECT ANSWER ____ ____ : Any property derived from or obtained, directly or indirectly, through the commission of a crime. Cross Border - CORRECT ANSWER ____ ____ : Used in the context of activities that involve at least two countries, such as wiring money from one country to another or taking currency across a border. Cross-Border Transfer - CORRECT ANSWER ____-____ ____: Any wire transfer in which the originator and bene ciary institutions are located in different jurisdictions. A cross-border transfer also refers to any chain of wire transfers that has at least one cross-border element. Cuckoo Smurfing - CORRECT ANSWER ____ ____ : A form of money laundering linked to alternative remittance systems in which criminal funds are transferred through the accounts of unwitting persons who are expecting genuine funds or payments from overseas. The term cuckoo smur ng rst originated in investigations in the U.K., where it is a signi cant money laundering technique. Currency - CORRECT ANSWER ____ : Banknotes and coins that are in circulation as a medium of exchange. Currency Smuggling - CORRECT ANSWER ____ ____ : The illicit movement of large quantities of cash across borders, often into countries with strict banking secrecy, poor exchange controls or poor anti-money laundering legislation. Currency Transaction Report - CORRECT ANSWER ____ ____ ____ : A report that documents a currency transaction that exceeds a certain monetary threshold. A ____ can also be led on multiple currency transactions that occur in one day that add up to or are greater than the required reporting amount. In some countries, including the U.S., currency transaction reports must be led with government authorities under specific circumstances. Custodian - CORRECT ANSWER ____ : A bank, financial institution or other entity that is responsible for managing or administering or safekeeping assets for other persons or institutions. Typically, ____s are not active, aggressive managers of the assets in question, but, instead, serve to passively conserve them. Custody - CORRECT ANSWER ____ : The act or authority of safeguarding and administration of clients' investments or assets. Customer Due Diligence - CORRECT ANSWER ____ ____ ____ : In terms of money laundering controls, it means implementing adequate policies, practices and procedures that promote high ethical and professional standards for dealing with customers and are designed to prevent banks from being used, intentionally or unintentionally, by criminal elements. ____ includes not only establishing the identity of customers, but also monitoring account activity to identify those transactions that do not conform with the normal or expected transactions for that customer or type of account. Customer Identification Program - CORRECT ANSWER ____ ____ ____ : The policies and procedures of an institution that aim to identify and verify the identity of its customers. In general, the program must be in writing, have senior board approval and include procedures for customer noti cation. Customer Information Order - CORRECT ANSWER ____ ____ ____ : Requires all nancial institutions—or a targeted sample of banks and other nancial institutions—to provide the details of any accounts held by the person under investigation, thus enabling an investigator to nd out where the suspect's accounts are held. Debit Card - CORRECT ANSWER ____ ____ : A card issued by a financial institution that permits an account- holder to draw funds from a pre-existing account in his or her name for the purpose of paying obligations or for making purchases in other locations or businesses. ____ ____s have been found to be convenient tools to launder criminal proceeds, especially if they are issued by financial institutions in secrecy havens because they leave few, if any, traces of the debited sources of funds. Debit Transaction - CORRECT ANSWER ____ ____ : A transaction that involves the use of a bankcard to purchase goods and services or to obtain cash. The transaction automatically debits the cardholder's deposit account. Designated Categories of Offense - CORRECT ANSWER ____ ____ __ ____ : In its 40 Recommendations of 2003, FATF issued for the rst time a list of "designated categories of offense" that enumerates crimes that may lead to money laundering prosecutions. Each country may decide how it will de ne those offenses and their elements. Many nations do not specify which crimes can serve as predicates for laundering prosecutions and merely state that all serious felonies may be predicates. Others, such as the U.S., specify long lists of crimes that must be present in order for a money laundering prosecution to proceed. Under the FATF de nition, the designated categories are: Participation in an organized criminal group and racketeering; Terrorism, including terrorist nancing; Traf cking in human beings and migrant smuggling; Sexual exploitation, including sexual exploitation of children; Illicit traf cking in narcotic drugs and psychotropic substances; Illicit arms traf cking; Illicit traf cking in stolen and other goods; Corruption and bribery; Fraud; Counterfeiting currency; Counterfeiting and piracy of products; Environmental crime; Murder, grievous bodily injury; Kidnapping, illegal restraint, and hostage-taking; Robbery or theft; Smuggling; Extortion; Forgery; Piracy; and Insider trading and market manipulation. Designated Non-Financial Businesses and Professions - CORRECT ANSWER ____ __-____ ____ ___ ____ : With its 2003 revisions, FATF indicated the following businesses should comply with the 40 Recommendations. Casinos (including Internet casinos). Real estate agents. Dealers in precious metals. Dealers in precious stones. Lawyers, notaries, other independent legal professionals and accountants. Refers to sole practitioners, partners and employed professionals within professional rms. It is not meant to refer to "internal" professionals who are employees of other types of businesses, or to professionals working for government agencies who may already be subject to measures that would combat money laundering. Trust and company service providers. Refers to all persons or businesses that are not covered elsewhere under the Recommendations, and which provide any of the following services to third parties: Acting as a formation agent of legal persons. Acting as (or arranging for another person to act as) a director or secretary of a company, a partner of a partnership, or a similar position in relation to other legal persons. Providing a registered of ce, business address or accommodation, correspondence or administrative address for a company, a partnership or any other legal person or arrangement. Acting as (or arranging for another person to act as) a trustee of an express trust. Acting as (or arranging for another person to act as) a nominee shareholder for another person. Disclosure Order - CORRECT ANSWER ____ ____ : A document that requires a person who has information relevant to an investigation to answer questions at an interview, to provide information, or to produce documentation. The order can be exercised not only against a person whose assets are under investigation, but also against a third party, such as a nancial institution. Domestic Transfer - CORRECT ANSWER ____ ____ : Wire transfer in which the originator and bene ciary institutions are located in the same jurisdiction. A ____ ____ therefore refers to any chain of wire transfers that takes place entirely within the borders of a single jurisdiction, even though the system used to send the wire transfer may be located in another jurisdiction. Downstream Correspondent Clearer - CORRECT ANSWER ____ ____ ____ : A correspondent banking client who receives correspondent banking services from one institution and provides correspondent banking services to other financial institutions in the same currency as the account it maintains with the institution. Dry Trust - CORRECT ANSWER ____ ____ : See Bare Trust. Eastern and Southern African Anti-Money Laundering Group - CORRECT ANSWER ____ ___ ____ ____ ____-____ ____ ____ : A FATF-style regional body comprising fourteen countries from the Eastern region of Africa down to the Southern tip of Africa. It was established in 1999. See www.esaamlg.org. Chop Shop Banking - CORRECT ANSWER ____ ____ ____ : See Alternative Remittance System. Electronic Banking - CORRECT ANSWER ____ ____ : A form of banking in which funds are transferred through an exchange of electronic signals among nancial institutions rather than through an exchange of cash, checks or other negotiable instruments. Electronic Cash - CORRECT ANSWER ____ ____ : A payment mechanism designed for the Internet, electronic cash represents a series of monetary value units electronically stored on the hard drive of a computer or microchip of a plastic card. It is anonymous like cash, and has immediate value. E-cash is attractive to money launderers because of its anonymity and the ease it provides in "transporting" large sums quickly and easily via the Internet. It is also called "e-money." CICAD - CORRECT ANSWER ____ : (Spanish: Comisión Interamericana para el Control del Abuso de Drogas) See Organization of American States—Inter-American Drug Abuse Control Commission. Clearing Account - CORRECT ANSWER ____ ____ : Also called an "omnibus" or "concentration account." Held by a nancial institution in its name, a ____ is used primarily for internal administrative or bank-to-bank transactions in which funds are transmitted and commingled without personally identifying the originators. The USA Patriot Act prohibits the use of such accounts for customer transactions. Collection Accounts - CORRECT ANSWER ____ ___ : Immigrants from foreign countries deposit many small amounts of currency into one account where they reside, and the collected sum is transferred to an account in their home country without documentation of the sources of the funds. Certain ethnic groups from Asia or Africa may use collection accounts to launder money. Egmont Group of Financial Intelligence Units - CORRECT ANSWER In 1995, a number of national nancial intelligence units (FIUs) began working together in an informal organization known as the Egmont Group, named for the site of its rst meeting in the Egmont-Arenberg Palace in Brussels. The goal of the group is to provide a forum for FIUs to improve support to their national anti-money laundering programs and to develop protocols for information sharing. The FIUs' support includes expanding and systematizing the exchange of nancial intelligence, improving expertise and capabilities of the personnel of such organizations, and fostering improved communications among FIUs through application of new technologies and sharing of information for nancial crimes investigations. Electronic Banking - CORRECT ANSWER __ __: A form of banking in which funds are transferred through an exchange of electronic signals among financial institutions rather than through an exchange of cash, checks or other negotiable instruments. Electronic Funds Transfer - CORRECT ANSWER ___ ___ ___: The movement of funds between financial institutions electronically. The two most common ____ systems in the U.S. are FedWire and CHIPS. (SWIFT is often referred to as the third ___ system, but in reality it is an international messaging system that carries instructions for wire transfers between institutions, rather than the wire transfer system itself.) Other systems that facilitate funds movement, but are not technically ____ systems, include automated clearing houses (ACH), which are networks that conduct batch processing of messages for book transfers between institutions. Electronic Money - CORRECT ANSWER ___ ___ : See Electronic Cash. Enhanced Due Diligence - CORRECT ANSWER ___ ___ ___: Additional examination and cautionary measures aimed at identifying customers and confirming that their activities and funds are legitimate. EAG - CORRECT ANSWER ___ ___ __ ___ ___ ___ ___ ____ ___ : (EAG) A FATF-style regional body formed in October 2004 in Moscow. Member countries include Belarus, China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan, Turkmenistan and Uzbekistan. See http://www.eurasiangroup.org/. European Union - CORRECT ANSWER ____ ____: The ___ ___ is a family of democratic European countries. Its member states have set up common institutions to which they delegate part of their sovereignty so that decisions on specific matters of collective interest can be made democratically at the European level. See http://europa.eu/ index_en.htm. European Union Directive on Prevention of the Use of the Financial System for the Purpose of Money Laundering and Terrorist Financing - CORRECT ANSWER ____ ____ ____ __ ____ __ _______ __ ___ ____ ____ ___ ___ ____ __ ____ ____ ___ ____ _____: First adopted by the European Union in June 1991, the directive requires EU member states to achieve certain results by amending national laws, if necessary, to prevent their domestic nancial systems from being exploited for money laundering. The directive was con ned to drug traf cking as de ned in the Vienna Convention. The scope of the directive was also con ned to credit and nancial institutions as the most vulnerable to abuse by money launderers, but member states were encouraged to cover other sectors too that might become involved in laundering. The directive was revised in December 2001 by extending the money laundering offenses beyond credit and nancial institutions to corporate service providers, casinos, lawyers and accountants. A third directive in September 2005 replaced the previous two. In line with the FATF money laundering recommendations, the Third EU Directive extended the scope of the earlier directives by: Defining "money laundering" and "terrorist nancing" as separate crimes. Extending customer identi cation and suspicious transaction reporting obligations to trusts and company service providers, life insurance intermediaries and dealers selling goods for cash payments above a certain amount. Detailing a risk-based approach to customer due diligence. Protecting employees who report suspicions of money laundering or terrorist nancing. Obligating member states to keep comprehensive statistics regarding the use of and results obtained from suspicious transaction reports. Requiring all nancial institutions to identify and verify the "bene cial owner" of all accounts held by legal entities or persons. Europol - CORRECT ANSWER ____: European Law Enforcement Organization, which aims to improve the effectiveness and cooperation of competent authorities in member states in preventing and combating terrorism, unlawful drug trafficking and other serious forms of international organized crime. In the area of anti-money laundering, Europol provides European Union member states' law enforcement authorities with operational and analytical support via the ELOs (Europol Liaison Of cers) and its analysts. Exchange Office - CORRECT ANSWER ___ ___: See Bureau de Change. Exempt Account - CORRECT ANSWER ____ ____ : In some countries, a distinction is granted to certain customers of a financial institution permitting the institution to waive its responsibility to report certain transactions that are otherwise required. Exempt accounts must be documented and the financial institutions that secure the exemptions must still monitor their transactions. Express Trust - CORRECT ANSWER ____ ____: A trust created by the settlor, usually in the form of a document such as a written deed of trust. An ____ ____ contrasts with trusts that come into being through the operation of the law and do not result from the clear intent or decision of a settlor to create a trust or similar legal arrangements (e.g., constructive trust). Extradition - CORRECT ANSWER _____: The surrender by one country to another of an accused or convicted person under a bilateral agreement that speci es the terms of such exchanges, such as the persons subject to being exchanged and the crimes for which exchanges will be permitted. The 1988 Vienna Convention against Illicit Traffic in Narcotics and Psychotropic Substances makes money laundering an internationally extraditable offense. Extraterritorial Reach - CORRECT ANSWER ____ ____ : The extension of one country's policies and laws to the citizens and institutions of another. U.S. money laundering laws contain several provisions that extend its prohibitions and sanctions into other countries. For example, the "extraterritorial jurisdiction" of the principal U.S. anti-money laundering law can apply to a non- U.S. citizen if the "conduct" occurs "in part" in the U.S. (Title 18, USC Sec. 1956(f)). Financial Action Task Force - CORRECT ANSWER ____ ___ ____ ____: ____ was chartered in 1989 by the Group of Seven industrial nations to foster the establishment of national and global measures to combat money laundering. It is an international policy-making body that sets anti-money laundering standards and counter-terrorist nancing measures worldwide. Its Recommendations do not have the force of law. Thirty-four countries and two international organizations are members. In 2012, ____ substantially revised its 40 + 9 Recommendations and reduced them to 40. ____ develops annual typology reports showcasing current money laundering and terrorist nancing trends and methods. See www.fatf-ga .org. GAFISUD - CORRECT ANSWER Financial Action Task Force on Money Laundering in South America (GAFISUD - Grupo de Acción Financiera de Sudamérica) A FATF-style regional body for South America, established in 2000. Members include: Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Ecuador, Mexico, Panama, Paraguay, Peru, and Uruguay. See http://www.ga sud.info/home.htm. [Show More]

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