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CAFCA EXAM 2025 UPDATED ACTUAL EXAM
WITH CORRECT SOLUTIONS.
What is Financial Crime? - correct answer- Illegal activities that
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typically are economically motivated, such as money laundering,
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terrorist financing, sanctions, fraud, bribery, corruption, and tax
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evasion
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Name the three basic stages of money laundering. - correct
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answer- Placement, layering, and integration
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State the key differences between money laundering and
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terrorist financing. - correct answer- Terrorist financing uses funds
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to support terrorist activities, but the funds are not necessarily
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derived from illegal activities. Money laundering always involves
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the proceeds of illegal activities, typically committed by the
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ultimate beneficiaries of the funds.
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What are the main types of sanctions and who do they target? -
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correct answer- Financial, economic, and trade. They generally
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target individuals, organizations, and countries.
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List the three major reasons people commit fraud, and what this
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model is called. - correct answer- The three major reasons are
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pressure, opportunity, and rationalization. This model is referred to | | | | | | | |
as the "Fraud Triangle".
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Name two important pieces of anti-bribery and corruption
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legislation with extra-territorial reach. - correct answer- The
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Foreign Corrupt Practices Act in the US and The UK Bribery Act
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2010.
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State two differences between tax avoidance and tax evasion. -
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correct answer- Tax avoidance uses legal practices to reduce
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taxes owed, whereas tax evasion uses illegal practices to evade
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paying taxes owed.
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Name an example of politically exposed persons (PEPs). -
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correct answer- Examples of PEPs include heads of state or
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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.
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State an example of high-risk customers that Fin Techs might
| | | | | | | | |
encounter. - correct answer- Examples include customers who
| | | | | | | |
sign up using false identities, customers who lie about the
| | | | | | | | | |
purpose of business relationships, front companies, companies
| | | | | | |
| | | | | |
CAFCA EXAM 2025 UPDATED ACTUAL EXAM
WITH CORRECT SOLUTIONS.
What is Financial Crime? - correct 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. - correct
| | | | | | | | |
answer- Placement, layering, and integration
| | | | |
State the key differences between money laundering and
| | | | | | |
terrorist financing. - correct 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? -
| | | | | | | | | | | |
correct 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. - correct answer- The three major reasons are
| | | | | | | | | | |
, 2 | Page
| | | | | |
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. - correct answer- The
| | | | | | | |
Foreign Corrupt Practices Act in the US and The UK Bribery Act
| | | | | | | | | | | |
2010.
|
State two differences between tax avoidance and tax evasion. -
| | | | | | | | |
correct 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). -
| | | | | | | |
correct 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.
| | | | | |
State an example of high-risk customers that Fin Techs might
| | | | | | | | |
encounter. - correct answer- Examples include customers who
| | | | | | | |
sign up using false identities, customers who lie about the
| | | | | | | | | |
purpose of business relationships, front companies, companies
| | | | | | |
