CAFCA Manual – Study Guide (Anti-Money Laundering & Financial Crime Compliance, Key
Concepts & Practice Questions)
What is financial crime? - correct answer ✔✔Illegal activities that are usually economically
motivated.
What is money laundering? - correct answer ✔✔The process of concealing or disguising the
existence, source, movement, destination, or illegal application of criminally derived property or
funds to make them appear legitimate.
Three stages of money laundering - correct answer ✔✔- Placement
- Layering
- Integration
What is terrorist financing? - correct answer ✔✔Involves fund for an illegal political purpose to
support terrorist activities. However, money is necessarily derived from the proceeds of illegal
activity.
Hawala system plays a big roles in moving terrorist related funds.
What are sanctions? - correct answer ✔✔Political decision made as part of diplomatic efforts by
countries, regional organization, and international bodies. Sanctions are primarily a foreign
policy and security tool. Sanctions are intended to affect behavioral change through deterrence,
prevention, or punishment.
What is fraud? - correct answer ✔✔An International act of criminal deception in order to obtain
an unjust or illegal advantage. Usually for personal gain.
Reasons people commit fraud - correct answer ✔✔- Pressure
- Opportunity
, - Rationalization
4th Capacity
What is anti-bribery and corruption? - correct answer ✔✔Bribrery is the giving or receiving of a
financial or other advantage in connection with the improper performance of a position or
trust, or a function that is expected to be performed impartially, or in good faith.
Anti-bribery and Corruption Law? - correct answer ✔✔- The Foreign Corrupt Practices Act US
- The UK Bribery Act 2010
What is tax avoidance? - correct answer ✔✔The legal means to reduce the tax owed.
What is tax evasion? - correct answer ✔✔The illegal means to avoid paying tax owed.
Regulation to combat tax evasion? - correct answer ✔✔The Foreign Account Tax Compliance
Act (FATCA)
Types of financial crime risks? - correct answer ✔✔- Regulatory
- Legal
- Financial
- Reputational
Anti Money Laundering Regulations? - correct answer ✔✔- Bank Secrecy Act (BSA) US
- 5th AML Directive EU
- The ML and TF Regulation 2019 UK
Concepts & Practice Questions)
What is financial crime? - correct answer ✔✔Illegal activities that are usually economically
motivated.
What is money laundering? - correct answer ✔✔The process of concealing or disguising the
existence, source, movement, destination, or illegal application of criminally derived property or
funds to make them appear legitimate.
Three stages of money laundering - correct answer ✔✔- Placement
- Layering
- Integration
What is terrorist financing? - correct answer ✔✔Involves fund for an illegal political purpose to
support terrorist activities. However, money is necessarily derived from the proceeds of illegal
activity.
Hawala system plays a big roles in moving terrorist related funds.
What are sanctions? - correct answer ✔✔Political decision made as part of diplomatic efforts by
countries, regional organization, and international bodies. Sanctions are primarily a foreign
policy and security tool. Sanctions are intended to affect behavioral change through deterrence,
prevention, or punishment.
What is fraud? - correct answer ✔✔An International act of criminal deception in order to obtain
an unjust or illegal advantage. Usually for personal gain.
Reasons people commit fraud - correct answer ✔✔- Pressure
- Opportunity
, - Rationalization
4th Capacity
What is anti-bribery and corruption? - correct answer ✔✔Bribrery is the giving or receiving of a
financial or other advantage in connection with the improper performance of a position or
trust, or a function that is expected to be performed impartially, or in good faith.
Anti-bribery and Corruption Law? - correct answer ✔✔- The Foreign Corrupt Practices Act US
- The UK Bribery Act 2010
What is tax avoidance? - correct answer ✔✔The legal means to reduce the tax owed.
What is tax evasion? - correct answer ✔✔The illegal means to avoid paying tax owed.
Regulation to combat tax evasion? - correct answer ✔✔The Foreign Account Tax Compliance
Act (FATCA)
Types of financial crime risks? - correct answer ✔✔- Regulatory
- Legal
- Financial
- Reputational
Anti Money Laundering Regulations? - correct answer ✔✔- Bank Secrecy Act (BSA) US
- 5th AML Directive EU
- The ML and TF Regulation 2019 UK
