CERTIFIED AML FINTECH COMPLIANCE
ASSOCIATE (CAFCA) WITH QUESTIONS AND
ANSWERS NEW MODIFIED
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.
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,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
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, 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 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
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ASSOCIATE (CAFCA) WITH QUESTIONS AND
ANSWERS NEW MODIFIED
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.
Page 1 of 18
,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
Page 2 of 18
, 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 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
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