CAFCA EXAM 2025 UPDATE CERTIFIED STUDY
RESOURCES [MOST TESTED QUESTIONS] COMPLETE
QUESTIONS AND VERIFIED ANSWERS GRADE A+ GET
IT RIGHT
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.
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.
RESOURCES [MOST TESTED QUESTIONS] COMPLETE
QUESTIONS AND VERIFIED ANSWERS GRADE A+ GET
IT RIGHT
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.
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.
