CAFCA Manual EXAM Questions with 100% Correct Answers | Verified |
Updated (Actual Exam) LATEST VERSION!!
What is Financial Crime? - (ANSWER)Illegal activities that typically are economically motivated, such as
money laundering, terrorist financing, sanctions, fraud, bribery, corruption, and tax evasion
Name the three basic stages of money laundering. - (ANSWER)Placement, layering, and integration
State the key differences between money laundering and terrorist financing. - (ANSWER)Terrorist
financing uses funds to support terrorist activities, but the funds are not necessarily derived from illegal
activities. Money laundering always involves the proceeds of illegal activities, typically committed by the
ultimate beneficiaries of the funds.
What are the main types of sanctions and who do they target? - (ANSWER)Financial, economic, and
trade. They generally target individuals, organizations, and countries.
List the three major reasons people commit fraud, and what this model is called. - (ANSWER)The three
major reasons are pressure, opportunity, and rationalization. This model is referred to as the "Fraud
Triangle".
Name two important pieces of anti-bribery and corruption legislation with extra-territorial reach. -
(ANSWER)The Foreign Corrupt Practices Act in the US and The UK Bribery Act 2010.
State two differences between tax avoidance and tax evasion. - (ANSWER)Tax avoidance uses legal
practices to reduce taxes owed, whereas tax evasion uses illegal practices to evade paying taxes owed.
Name an example of politically exposed persons (PEPs). - (ANSWER)Examples of PEPs include heads of
state or heads of government, senior politicians, senior government, judicial and military officials, senior
executives of state-owned corporations, and important political party officials, as well as their families
and close associates. Usually, PEP positions are specified in each jurisdiction's AML regulation.
, CAFCA Manual EXAM Questions with 100% Correct Answers | Verified |
Updated (Actual Exam) LATEST VERSION!!
State an example of high-risk customers that Fin Techs might encounter. - (ANSWER)Examples include
customers who sign up using false identities, customers who lie about the purpose of business
relationships, front companies, companies with complex ownership structures, and customers linked to
organized crime groups.
Name some jurisdiction risks and red flags in the FinTech sector. - (ANSWER)Jurisdictions with higher risk
include those with poor AML regulations, high levels of corruption, inadequate frameworks to prevent
financing of terrorism, and economic sanctions in place. Jurisdictions that are tax havens and those
known to host shell companies are also high risk.
Why are Fin Techs often considered to be high-risk companies? - (ANSWER)Because of the lack of face-
to-face encounters and the speed with which a person can access financial products.
What are some Fin Tech risks and red flags? - (ANSWER)Non face-to-face customer interactions and
onboarding, cryptocurrencies and anonymity, faster payments, new technologies and their potential
vulnerabilities, unproven business models, and undeveloped governance frameworks.
What are the benefits to using banking as a service provider? - (ANSWER)Faster speed to market and
overcoming regulatory complexities.
What are card schemes? - (ANSWER)Membership-based networks that enable a payment method, such
as Visa, JCB and MasterCard.
What are the three lines of defense in AML compliance? - (ANSWER)The first line of defense is the line of
business. The second line of defense is the compliance and internal control functions. The third line of
defense is internal audit.
Updated (Actual Exam) LATEST VERSION!!
What is Financial Crime? - (ANSWER)Illegal activities that typically are economically motivated, such as
money laundering, terrorist financing, sanctions, fraud, bribery, corruption, and tax evasion
Name the three basic stages of money laundering. - (ANSWER)Placement, layering, and integration
State the key differences between money laundering and terrorist financing. - (ANSWER)Terrorist
financing uses funds to support terrorist activities, but the funds are not necessarily derived from illegal
activities. Money laundering always involves the proceeds of illegal activities, typically committed by the
ultimate beneficiaries of the funds.
What are the main types of sanctions and who do they target? - (ANSWER)Financial, economic, and
trade. They generally target individuals, organizations, and countries.
List the three major reasons people commit fraud, and what this model is called. - (ANSWER)The three
major reasons are pressure, opportunity, and rationalization. This model is referred to as the "Fraud
Triangle".
Name two important pieces of anti-bribery and corruption legislation with extra-territorial reach. -
(ANSWER)The Foreign Corrupt Practices Act in the US and The UK Bribery Act 2010.
State two differences between tax avoidance and tax evasion. - (ANSWER)Tax avoidance uses legal
practices to reduce taxes owed, whereas tax evasion uses illegal practices to evade paying taxes owed.
Name an example of politically exposed persons (PEPs). - (ANSWER)Examples of PEPs include heads of
state or heads of government, senior politicians, senior government, judicial and military officials, senior
executives of state-owned corporations, and important political party officials, as well as their families
and close associates. Usually, PEP positions are specified in each jurisdiction's AML regulation.
, CAFCA Manual EXAM Questions with 100% Correct Answers | Verified |
Updated (Actual Exam) LATEST VERSION!!
State an example of high-risk customers that Fin Techs might encounter. - (ANSWER)Examples include
customers who sign up using false identities, customers who lie about the purpose of business
relationships, front companies, companies with complex ownership structures, and customers linked to
organized crime groups.
Name some jurisdiction risks and red flags in the FinTech sector. - (ANSWER)Jurisdictions with higher risk
include those with poor AML regulations, high levels of corruption, inadequate frameworks to prevent
financing of terrorism, and economic sanctions in place. Jurisdictions that are tax havens and those
known to host shell companies are also high risk.
Why are Fin Techs often considered to be high-risk companies? - (ANSWER)Because of the lack of face-
to-face encounters and the speed with which a person can access financial products.
What are some Fin Tech risks and red flags? - (ANSWER)Non face-to-face customer interactions and
onboarding, cryptocurrencies and anonymity, faster payments, new technologies and their potential
vulnerabilities, unproven business models, and undeveloped governance frameworks.
What are the benefits to using banking as a service provider? - (ANSWER)Faster speed to market and
overcoming regulatory complexities.
What are card schemes? - (ANSWER)Membership-based networks that enable a payment method, such
as Visa, JCB and MasterCard.
What are the three lines of defense in AML compliance? - (ANSWER)The first line of defense is the line of
business. The second line of defense is the compliance and internal control functions. The third line of
defense is internal audit.
