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RES exam question on AML / CFT: Salesperson Kavya acts for Lotus Pte Ltd, which is buying a $7 million bungalow

HardAnti-Money Laundering (PMLPFTF) · Paper 2

Salesperson Kavya acts for Lotus Pte Ltd, which is buying a $7 million bungalow. Her checks show that 80% of Lotus is owned by a serving minister of a foreign government, and the other 20% by his long-time business partner. Which of the following statements is/are correct? (i) As a foreign PEP and beneficial owner, the minister brings enhanced measures without a separate risk finding. (ii) Since a company is the buyer, the minister's status as a politically exposed person does not affect the checks. (iii) Approval to continue comes from the minister's own government rather than from the agency. (iv) The enhanced measures include establishing the source of wealth and the source of funds.

  1. A(i) and (iv) only
  2. B(ii) and (iv) only
  3. C(i), (iii) and (iv) only
  4. D(i) only
Show answer & explanation

Answer

A. (i) and (iv) only

Explanation

Answer: (i) and (iv) only. Beneficial-owner checks look through the company, so a foreign PEP owner triggers enhanced due diligence automatically.(i) True. An 80% owner who is a serving foreign minister is a foreign PEP beneficial owner. A foreign PEP triggers enhanced measures automatically; a domestic PEP does so only where risk is assessed as higher.(iv) True. Enhanced measures mean reasonable measures to establish source of wealth and source of funds.Rule: The salesperson determines whether the client or a beneficial owner is a politically exposed person. Enhanced measures cover source of wealth and source of funds, and need approval by a designated officer of the estate agent.Source: Estate Agents (Prevention of Money Laundering, Proliferation Financing and Terrorism Financing) Regulations 2021, as amended with effect from 1 July 2025

Why the other options are wrong

  • (ii) False. A company is the buyer, but beneficial-owner checks look through it, so the minister's status is in play.
  • (iii) False. Approval is given inside the agency by a designated officer.

Study the concept behind this question: AML/CFT for Property Agents: CDD, Source of Funds & STR

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