CAMS Question #174: Real Exam Question with Answer & Explanation

The correct answer is C. A politically exposed person.. A politically exposed person (PEP) is a customer who requires the most enhanced due diligence (EDD). This is because PEPs are individuals who hold or have held prominent public positions, such as heads of state, senior politicians, judges, military officers, or directors of state

Question

Which of the following customers require the most enhanced due diligence?

Options

AA resident of a non-cooperative jurisdiction.
BAn international business corporation.
CA politically exposed person.
DAn established customer.

Explanation

A politically exposed person (PEP) is a customer who requires the most enhanced due diligence (EDD). This is because PEPs are individuals who hold or have held prominent public positions, such as heads of state, senior politicians, judges, military officers, or directors of state-owned enterprises, and who may pose a higher risk of money laundering, corruption, or bribery due to their influence and access to public funds. EDD measures for PEPs may include obtaining senior management approval, establishing the source of wealth and funds, and conducting enhanced ongoing monitoring of the business relationship.

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