CERTIFIED AML FINTECH COMPLIANCE
ASSOCIATE (CAFCA) EXAM 2025 WITH
ACTUAL CORRECT QUESTIONS AND
VERIFIED DETAILED ANSWERS
|FREQUENTLY TESTED QUESTIONS AND
SOLUTIONS |ALREADY GRADED A+|NEWEST
|LATEST UPDATE |GUARANTEED PASS
What is an "indemnity"?
A formal legal document that is commonly used in communication between financial
institutions, often to request information. Indemnities facilitate the return of funds from one
organization to another when the funds have been reported as criminal.
What are the four key aspects of successful partner relationships among financial institutions?
Set a strong foundation, establish clear roles and responsibilities, have a clear escalation
process, and ensure regular communication.
What two types of information might an economic crime unit request from a FinTech?
Law enforcement can request information from FinTech in their effort to collect intelligence and
build evidence for a case. "Requests for intelligence" typically are made via a non-legally binding
request. If law enforcement decides to pursue a case in court, they will submit a "request for
evidence."
What are some general guidelines for how to respond to a law enforcement request?
Acknowledge receipt of the request, give your expected time frame for the response, make sure
you understand exactly what information has been requested, determine whether there is a
deadline, provide exactly what the request asks for, and write clearly, avoiding jargon.
What are some general guidelines for working with regulators?
1|Page
,Maintain frequent, proactive communication, promptly reply to requests for information,
communicate clearly, avoiding jargon, and take a collaborative, helpful approach.
What should an organization do when it suspects that a customer is laundering money?
The organization has a duty to report it to the authorities. In many countries, there is a personal
liability to report money laundering, and there are legal penalties of fines and imprisonment if
you do not do so.
What should you do if you have completed your research and identified risk indicators that can't
be mitigated?
You might need to escalate the customer for additional investigation. The internal process you
use to escalate your findings is important and can have legal and regulatory consequences.
What is a SAR/STR?
Suspicious activity reports (SARs) or Suspicious transaction reports (STRs) are reports that alert
law enforcement to potential instances of money laundering or terrorist financing.
How is a SAR written?
The laws about filing a SAR are clear and strong. The format often follows a template provided
by law enforcement. There are instructions about how much to include.
What is transaction monitoring?
Transaction monitoring is the scanning and analysis of historic transactional data for potential
money laundering, or efforts to breach economic sanctions.
How do financial institutions decide whether to maintain or close the impacted account after
filing a SAR?
The decision is made based on the financial institution's risk appetite and tolerance and, in
accordance with its own standards and guidelines.
What is the proper way to reject a new customer?
When it is a risk appetite matter, tell the potential customer. However, if financial crime is
suspected, do not tip off the customer. Document your reasons. File the necessary reports if you
suspect financial crime.
What is Financial Crime?
Illegal activities that typically are economically motivated, such as money laundering, terrorist
financing, sanctions, fraud, bribery, corruption, and tax evasion
2|Page
, Name the three basic stages of money laundering.
Placement, layering, and integration
State the key differences between money laundering and terrorist financing.
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?
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.
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.
The Foreign Corrupt Practices Act in the US and The UK Bribery Act 2010.
State two differences between tax avoidance and tax evasion.
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).
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.
State an example of high-risk customers that Fin Techs might encounter.
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.
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.
3|Page
ASSOCIATE (CAFCA) EXAM 2025 WITH
ACTUAL CORRECT QUESTIONS AND
VERIFIED DETAILED ANSWERS
|FREQUENTLY TESTED QUESTIONS AND
SOLUTIONS |ALREADY GRADED A+|NEWEST
|LATEST UPDATE |GUARANTEED PASS
What is an "indemnity"?
A formal legal document that is commonly used in communication between financial
institutions, often to request information. Indemnities facilitate the return of funds from one
organization to another when the funds have been reported as criminal.
What are the four key aspects of successful partner relationships among financial institutions?
Set a strong foundation, establish clear roles and responsibilities, have a clear escalation
process, and ensure regular communication.
What two types of information might an economic crime unit request from a FinTech?
Law enforcement can request information from FinTech in their effort to collect intelligence and
build evidence for a case. "Requests for intelligence" typically are made via a non-legally binding
request. If law enforcement decides to pursue a case in court, they will submit a "request for
evidence."
What are some general guidelines for how to respond to a law enforcement request?
Acknowledge receipt of the request, give your expected time frame for the response, make sure
you understand exactly what information has been requested, determine whether there is a
deadline, provide exactly what the request asks for, and write clearly, avoiding jargon.
What are some general guidelines for working with regulators?
1|Page
,Maintain frequent, proactive communication, promptly reply to requests for information,
communicate clearly, avoiding jargon, and take a collaborative, helpful approach.
What should an organization do when it suspects that a customer is laundering money?
The organization has a duty to report it to the authorities. In many countries, there is a personal
liability to report money laundering, and there are legal penalties of fines and imprisonment if
you do not do so.
What should you do if you have completed your research and identified risk indicators that can't
be mitigated?
You might need to escalate the customer for additional investigation. The internal process you
use to escalate your findings is important and can have legal and regulatory consequences.
What is a SAR/STR?
Suspicious activity reports (SARs) or Suspicious transaction reports (STRs) are reports that alert
law enforcement to potential instances of money laundering or terrorist financing.
How is a SAR written?
The laws about filing a SAR are clear and strong. The format often follows a template provided
by law enforcement. There are instructions about how much to include.
What is transaction monitoring?
Transaction monitoring is the scanning and analysis of historic transactional data for potential
money laundering, or efforts to breach economic sanctions.
How do financial institutions decide whether to maintain or close the impacted account after
filing a SAR?
The decision is made based on the financial institution's risk appetite and tolerance and, in
accordance with its own standards and guidelines.
What is the proper way to reject a new customer?
When it is a risk appetite matter, tell the potential customer. However, if financial crime is
suspected, do not tip off the customer. Document your reasons. File the necessary reports if you
suspect financial crime.
What is Financial Crime?
Illegal activities that typically are economically motivated, such as money laundering, terrorist
financing, sanctions, fraud, bribery, corruption, and tax evasion
2|Page
, Name the three basic stages of money laundering.
Placement, layering, and integration
State the key differences between money laundering and terrorist financing.
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?
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.
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.
The Foreign Corrupt Practices Act in the US and The UK Bribery Act 2010.
State two differences between tax avoidance and tax evasion.
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).
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.
State an example of high-risk customers that Fin Techs might encounter.
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.
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.
3|Page
