RES exam question on AML / CFT: An estate agent applies its AML obligations
An estate agent applies its AML obligations. It takes a risk-based approach to customers, identifies one customer as a politically exposed person (PEP), and must retain CDD records for the prescribed period. Which is/are correct? (i) A risk-based approach calibrates due diligence to the assessed risk (ii) PEPs generally warrant enhanced due diligence (iii) CDD and transaction records must be kept for the prescribed retention period (iv) Once a customer is onboarded, no ongoing monitoring is required
- A(ii), (iii) and (iv) only
- B(i) and (iv) only
- C(i), (ii) and (iii) only
- DAll of the above
Show answer & explanation
Answer
C. (i), (ii) and (iii) only
Explanation
(i) is correct: a risk-based approach calibrates the level of due diligence to the assessed risk. (ii) is correct: politically exposed persons generally warrant enhanced due diligence. (iii) is correct: CDD and transaction records must be kept for the prescribed retention period. Hence (i), (ii) and (iii) only.
Why the other options are wrong
- (iv) is wrong: onboarding does not end obligations, since ongoing monitoring of the business relationship is a core AML requirement.
Study the concept behind this question: AML/CFT for Property Agents: CDD, Source of Funds & STR
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