CAFCA (ACAMS): Questions And Correct Answers
Financial crime Right Ans - Illegal activities that typically are
economically motivated, such as money laundering, terrorist financing,
sanctions, fraud, bribery, corruption, and tax evasion
Three basic stages of money laundering Right Ans - Placement,
Layering, Integration
What is terrorist financing? Right Ans - Terrorist financing uses funds to
support terrorist activities, but the funds are not necessarily derived from
illegal activities.
What is money laundering? Right Ans - Money laundering always
involves the proceeds of illegal activities, typically committed by the
ultimate beneficiaries of the funds.
Main types of sanctions and who do they target? Right Ans - Financial,
economic, and trade. They generally target individuals, organizations, and
countries
3 major reasons people commit fraud. This model is referred to as what?
Right Ans - pressure, opportunity, and rationalization. This model is
referred to as the Fraud Triangle
Name two important pieces of antibribery and corruption legislation with
extra territorial reach Right Ans - The Foreign Corrupt Practices Act in
the US , The UK Bribery Act 2010
State the difference between tax avoidance and tax evasion Right Ans -
Tax avoidance uses legal practices to reduce taxes owed, whereas tax
evasion uses illegal practices to evade paying taxes owed.
Name an example of PEPs Right Ans - 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 FinTechs might encounter
Right Ans - 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,
customers linked to organized crime groups.
Name some jurisdiction risks and red flags in the FinTech sector Right
Ans - Jurisdictions with higher risk include
Poor AML regulations,
High levels of corruption
Inadequate frameworks to prevent financing of terrorism,
and economic sanctions
Jurisdictions that are tax havens
those known to host shell companies
Why are FinTechs often considered to be high-risk companies? Right
Ans - Lack of face-to-face encounters
Speed with which a person can access financial products
What are some FinTech risk and red flags? Right Ans - Non-face-to-face
customer interactions and onboarding
Cryptocurrencies and anonymity
Faster payments
New technologies and their potential vulnerabilities
Unproven business models,
Undeveloped governance frameworks.
What are the benefits to using banking as a service providers? Right Ans
- Faster speed to market
Financial crime Right Ans - Illegal activities that typically are
economically motivated, such as money laundering, terrorist financing,
sanctions, fraud, bribery, corruption, and tax evasion
Three basic stages of money laundering Right Ans - Placement,
Layering, Integration
What is terrorist financing? Right Ans - Terrorist financing uses funds to
support terrorist activities, but the funds are not necessarily derived from
illegal activities.
What is money laundering? Right Ans - Money laundering always
involves the proceeds of illegal activities, typically committed by the
ultimate beneficiaries of the funds.
Main types of sanctions and who do they target? Right Ans - Financial,
economic, and trade. They generally target individuals, organizations, and
countries
3 major reasons people commit fraud. This model is referred to as what?
Right Ans - pressure, opportunity, and rationalization. This model is
referred to as the Fraud Triangle
Name two important pieces of antibribery and corruption legislation with
extra territorial reach Right Ans - The Foreign Corrupt Practices Act in
the US , The UK Bribery Act 2010
State the difference between tax avoidance and tax evasion Right Ans -
Tax avoidance uses legal practices to reduce taxes owed, whereas tax
evasion uses illegal practices to evade paying taxes owed.
Name an example of PEPs Right Ans - 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 FinTechs might encounter
Right Ans - 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,
customers linked to organized crime groups.
Name some jurisdiction risks and red flags in the FinTech sector Right
Ans - Jurisdictions with higher risk include
Poor AML regulations,
High levels of corruption
Inadequate frameworks to prevent financing of terrorism,
and economic sanctions
Jurisdictions that are tax havens
those known to host shell companies
Why are FinTechs often considered to be high-risk companies? Right
Ans - Lack of face-to-face encounters
Speed with which a person can access financial products
What are some FinTech risk and red flags? Right Ans - Non-face-to-face
customer interactions and onboarding
Cryptocurrencies and anonymity
Faster payments
New technologies and their potential vulnerabilities
Unproven business models,
Undeveloped governance frameworks.
What are the benefits to using banking as a service providers? Right Ans
- Faster speed to market
