Certified AML Fintech Compliance Associate (CAFCA)
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Already Graded A+
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 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 with complex ownership structures, and
customers linked to organized crime groups.
Name some jurisdiction risks and red flags in the FinTech sector. ✔Correct 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? ✔Correct 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? ✔Correct 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? ✔Correct Answer-Faster speed to
market and overcoming regulatory complexities.
What are card schemes? ✔Correct 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? ✔Correct 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.
What is meant by a "four-eyes check" during onboarding? ✔Correct Answer-To ensure proper
checks are performed, a second person might review the file. This is also known as employing "dual
controls."
What are dual controls? ✔Correct Answer-In the prevention of financial crime, dual controls can be
applied during CDD (customer due diligence) to ensure it is performed correctly.
Why is it important for the second line of defense to be independent from the business line?
✔Correct Answer-To be empowered to obtain access to information throughout the organization,
conduct investigations of possible breaches, and freely express and disclose findings to senior
management.
Describe the responsibilities of the money laundering reporting officer (MLRO). ✔Correct Answer-
Ensuring that the organization's AML/CFT efforts are effectively designed and implemented, handling
inquiries, determining whether SARs require reporting to authorities, and overseeing training.
For optimal effectiveness, who should perform an organization's audit? ✔Correct Answer-The
audit should be independent, that is, performed by people not involved with the organization's
AML/CFT compliance staff. The audit team should report directly to the board of directors or a
designated board committee of outside directors.
What is an organization's risk appetite? ✔Correct Answer-Risk appetite determines the type of
customer it will accept, the type of product it will offer, and the jurisdictions in which it will do
business.
Why should customer risk assessments be dynamic and capable of revision over time? ✔Correct
Answer-Customer risk can change during the business relationship. Organizations need a current
understanding of customer risk so they can apply due diligence and ongoing monitoring.
For any financial institution, who should receive ongoing AML training? ✔Correct Answer-An
organization's employees and third parties, such as contractors and agents.
How can a FinTech prepare for a successful audit? ✔Correct Answer-Plan in advance, ensure staff
availability, ensure documentation is correct and up to date, address potential issues on an ongoing
basis throughout the year, and fully understand the audit scope.
Exam with all Correct & 100% Verified Answers |
Already Graded A+
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 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 with complex ownership structures, and
customers linked to organized crime groups.
Name some jurisdiction risks and red flags in the FinTech sector. ✔Correct 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? ✔Correct 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? ✔Correct 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? ✔Correct Answer-Faster speed to
market and overcoming regulatory complexities.
What are card schemes? ✔Correct 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? ✔Correct 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.
What is meant by a "four-eyes check" during onboarding? ✔Correct Answer-To ensure proper
checks are performed, a second person might review the file. This is also known as employing "dual
controls."
What are dual controls? ✔Correct Answer-In the prevention of financial crime, dual controls can be
applied during CDD (customer due diligence) to ensure it is performed correctly.
Why is it important for the second line of defense to be independent from the business line?
✔Correct Answer-To be empowered to obtain access to information throughout the organization,
conduct investigations of possible breaches, and freely express and disclose findings to senior
management.
Describe the responsibilities of the money laundering reporting officer (MLRO). ✔Correct Answer-
Ensuring that the organization's AML/CFT efforts are effectively designed and implemented, handling
inquiries, determining whether SARs require reporting to authorities, and overseeing training.
For optimal effectiveness, who should perform an organization's audit? ✔Correct Answer-The
audit should be independent, that is, performed by people not involved with the organization's
AML/CFT compliance staff. The audit team should report directly to the board of directors or a
designated board committee of outside directors.
What is an organization's risk appetite? ✔Correct Answer-Risk appetite determines the type of
customer it will accept, the type of product it will offer, and the jurisdictions in which it will do
business.
Why should customer risk assessments be dynamic and capable of revision over time? ✔Correct
Answer-Customer risk can change during the business relationship. Organizations need a current
understanding of customer risk so they can apply due diligence and ongoing monitoring.
For any financial institution, who should receive ongoing AML training? ✔Correct Answer-An
organization's employees and third parties, such as contractors and agents.
How can a FinTech prepare for a successful audit? ✔Correct Answer-Plan in advance, ensure staff
availability, ensure documentation is correct and up to date, address potential issues on an ongoing
basis throughout the year, and fully understand the audit scope.
