RES exam question on AML / CFT: A buyer in a $5M transaction insists on paying a large portion in cash and is reluctant…
A buyer in a $5M transaction insists on paying a large portion in cash and is reluctant to provide identification. The buyer also wants the property held in another person's name. Which is/are correct? (i) These are red flags requiring enhanced customer due diligence (ii) The agency must perform CDD, including verifying identity and beneficial ownership (iii) A Suspicious Transaction Report (STR) should be filed where suspicion arises (iv) The transaction may proceed without checks if the buyer appears wealthy
- A(i), (ii) and (iv) only
- B(i), (ii) and (iii) only
- C(ii) and (iii) only
- D(i), (ii), (iii) and (iv)
Show answer & explanation
Answer
B. (i), (ii) and (iii) only
Explanation
(i) is correct: large cash payment, evasiveness over identity and nominee ownership are red flags requiring enhanced customer due diligence. (ii) is correct: the agency must perform CDD, verifying identity and beneficial ownership. (iii) is correct: a Suspicious Transaction Report should be filed where suspicion arises. The answer is (i), (ii) and (iii) only.
Why the other options are wrong
- (iv) is wrong: apparent wealth never waives the required checks.
Study the concept behind this question: AML/CFT for Property Agents: CDD, Source of Funds & STR
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