CISI Combating Financial Crime Free Sample Paper: Money Laundering Topic Preview

Q: Are these CISI Combating Financial Crime sample questions updated for 2026?

Yes, these free practice questions are continuously reviewed and updated to reflect the latest official syllabus changes and regulatory requirements for candidates in international markets.

Q: How similar is this sample paper to the real CISI Combating Financial Crime exam?

These questions preview the practice style available in the course, but they cover only Money Laundering. This is not a full mock exam and the result cannot measure your overall exam readiness.

Q: What does my CISI Combating Financial Crime topic-preview score mean?

It reflects only your answers to 15 questions from Money Laundering. Other syllabus areas are not tested here, so the score is not a pass or fail result and should not be used to predict your official exam performance.

Q: Can I retake this free topic preview?

Yes. You can retake these 15 questions, but repeated attempts cover the same single topic. The full course unlocks all 250 practice questions and broader mock-exam practice.

Question 1

A criminal attempts to deposit £50,000 in cash, generated from illegal narcotics sales, into a legitimate retail bank account. Which stage of the money laundering process does this scenario primarily illustrate, and what is its main vulnerability?

Accepted Answer

Placement; it is the most vulnerable stage because introducing large sums of illicit cash into the formal financial system can easily trigger reporting thresholds and suspicion.

Answer

Layering; it is the most vulnerable stage because transferring funds between multiple accounts often alerts international regulatory agencies.

Answer

Integration; it is highly vulnerable because purchasing luxury assets with illicit funds immediately links the criminal to the original crime.

Answer

Enablement; it is vulnerable because financial institutions must report any individual opening a new account with a cash deposit.

Question 2

A corporate service provider sets up a complex web of shell companies across three different offshore jurisdictions. Funds are rapidly wired between these companies to obscure their origin. Which money laundering stage does this represent?

Accepted Answer

Layering, as it involves creating complex financial transactions to separate the illicit funds from their source.

Answer

Placement, as the funds are being placed into offshore jurisdictions.

Answer

Integration, since the funds are being integrated into corporate structures.

Answer

Distance, because the criminal is distancing themselves from the initial crime scene.

Question 3

After successfully obscuring the origin of illicit funds through numerous international wire transfers, a criminal uses the funds to purchase high-end real estate and luxury vehicles. This scenario best describes which stage of money laundering?

Accepted Answer

Integration, as the illicit funds are being returned to the criminal disguised as legitimate assets.

Answer

Layering, because purchasing different types of assets adds another layer of complexity.

Answer

Placement, since the criminal is placing the funds into physical assets.

Answer

Disguise, because the criminal is hiding their wealth through physical property rather than bank accounts.

Question 4

Under the 'Enable, Distance, and Disguise' (EDD) model of money laundering, what is the primary purpose of using a trust or a foundation?

Accepted Answer

To provide distance by allowing the criminal to pass legal ownership of a property to a trustee while retaining control, effectively disguising the ultimate beneficial owner.

Answer

To enable the placement of physical cash into the banking system without triggering standard anti-money laundering thresholds.

Answer

To distance the funds by moving them physically across borders via cash couriers before depositing them.

Answer

To disguise the nature of the predicate offence by commingling illicit cash with donations from legitimate charitable sources.

Question 5

A solicitor knowingly assists a client in purchasing a commercial property using funds derived from drug trafficking. Under the Proceeds of Crime Act (POCA) 2002, which specific money laundering offence has the solicitor committed?

Accepted Answer

Arrangements.

Answer

Concealment.

Answer

Acquisition, use and possession.

Answer

Failure to disclose.

Question 6

An individual is found to be driving a luxury sports car that was purchased for £5,000, despite its market value being over £80,000. The individual claims they bought it from a friend. Which POCA 2002 offence is most applicable here?

Accepted Answer

Acquisition, use and possession, as the asset was acquired for inadequate consideration.

Answer

Concealment, because the individual is hiding the True value of the vehicle.

Answer

Arrangements, since the transaction was arranged between friends to evade tax.

Answer

Tipping-off, because the low price suggests an attempt to bypass suspicious activity reporting.

Question 7

What is the primary mandate and function of the Financial Action Task Force (FATF)?

Accepted Answer

To set international standards and promote effective implementation of measures for combating money laundering, terrorist financing, and proliferation financing.

Answer

To act as a global police force with the legal authority to prosecute money launderers and freeze terrorist assets worldwide.

Answer

To provide emergency funding and economic stability loans to developing nations struggling with severe financial crime vulnerabilities.

Answer

To serve as the central repository for all global Suspicious Activity Reports (SARs) submitted by national Financial Intelligence Units.

Question 8

How does the FATF ensure that its member countries are complying with its 40 Recommendations?

Accepted Answer

Through a peer review process known as 'mutual evaluation', measuring both technical compliance and the effectiveness of the country's systems.

Answer

By imposing immediate financial penalties and trade embargoes on countries that fail to implement the standards.

Answer

Through covert investigations conducted by FATF officers operating within the financial institutions of member countries.

Answer

By requiring national regulators to submit daily transactional data directly to the FATF headquarters in Paris for automated auditing.

Question 9

What is 'Civil Recovery' as defined under the Proceeds of Crime Act (POCA) 2002?

Accepted Answer

A non-conviction-based process allowing the recovery of property in civil proceedings before the High Court, where the property is shown to represent the proceeds of unlawful conduct.

Answer

A criminal court order compelling an individual convicted of fraud to compensate the victims from their legitimate income over a 10-year period.

Answer

A regulatory penalty imposed by the FCA on a financial institution for failing to implement adequate customer due diligence measures.

Answer

The immediate seizure of cash by police at an airport when an individual cannot explain its origin, without any court involvement.

Question 10

What is the significance of the Joint Money Laundering Steering Group (JMLSG) guidance for UK financial services firms?

Accepted Answer

It provides industry best practice, and the FCA considers whether a firm followed it when assessing breaches of AML requirements.

Answer

It is legally binding legislation passed by Parliament that dictates exact transaction monitoring algorithms firms must use.

Answer

It applies exclusively to non-regulated sectors like real estate and high-value dealers, while banks follow only the FATF standards.

Answer

It is an international treaty that harmonises anti-money laundering laws between the UK and the European Union.

Question 11

Under the Money Laundering Regulations (MLR) 2017/2019, letting agencies fall into the regulated sector if they rent properties with a monthly rental value of at least:

Accepted Answer

EUR 10,000 or more.

Answer

EUR 5,000 or more.

Answer

EUR 15,000 or more.

Answer

EUR 25,000 or more.

Question 12

Under the updated Money Laundering Regulations, art market participants are brought into scope if they deal in the sale, purchase, or storage of artworks with a value of at least:

Accepted Answer

EUR 10,000 or more.

Answer

EUR 5,000 or more.

Answer

EUR 20,000 or more.

Answer

EUR 50,000 or more.

Question 13

The Money Laundering Regulations 2022 introduced a 'travel rule' to help detect money laundering and terrorist financing. To which specific asset class does this updated rule apply?

Accepted Answer

Transfers involving cryptoassets.

Answer

Physical shipments of high-value artwork.

Answer

Cross-border movements of bearer negotiable instruments.

Answer

Real estate transactions involving non-resident buyers.

Question 14

A UK financial institution identifies that a new customer's information significantly contradicts the details listed on the Persons with Significant Control (PSC) register. What must the institution do under MLR 2019?

Accepted Answer

Report the discrepancy to Companies House.

Answer

Immediately freeze the customer's accounts and await a court order.

Answer

Submit a Suspicious Activity Report (SAR) to the FCA.

Answer

Terminate the business relationship without providing a reason.

Question 15

An individual brings a bag of dirty, low-denomination banknotes to a high-end jeweller to buy a diamond watch. The jeweller accepts the cash without asking questions. Which stage of the money laundering cycle is the criminal executing?

Accepted Answer

Placement, because they are converting illicit physical cash into a high-value asset.

Answer

Layering, because buying jewellery adds a layer of complexity to the audit trail.

Answer

Integration, because the criminal is enjoying the proceeds of their crime.

Answer

Distance, because the criminal is separating the cash from their physical location.

CISI Combating Financial Crime Free Sample Paper & Practice Questions

A criminal attempts to deposit £50,000 in cash, generated from illegal narcotics sales, into a legitimate retail bank account. Which stage of the money laundering process does this scenario primarily illustrate, and what is its main vulnerability?

CISI Combating Financial Crime

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CISI Combating Financial Crime Free Sample Paper & Practice Questions

A criminal attempts to deposit £50,000 in cash, generated from illegal narcotics sales, into a legitimate retail bank account. Which stage of the money laundering process does this scenario primarily illustrate, and what is its main vulnerability?

CISI Combating Financial Crime

Unlock 20% Discount

About This Free Sample Paper

Why Use a Question Bank & Mock Exams?

Frequently Asked Questions

Pass on Your First Attempt

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