CAMS · Question #232
CAMS Question #232: Real Exam Question with Answer & Explanation
The correct answer is D. The client exceeds the criteria of an acceptable risk model created by the institution and does not. According to the risk-based approach, financial institutions should apply enhanced due diligence and ongoing monitoring to higher-risk clients, and take appropriate measures to mitigate the risks of money laundering and terrorist financing. If the client exceeds the criteria of a
Question
Options
- AThe client does business in countries with active terrorist organizations.
- BThe client conducts international financial transactions exceeding U.S. $500 million.
- CThe client exceeds the criteria of an acceptable risk model created by another institution that is
- DThe client exceeds the criteria of an acceptable risk model created by the institution and does not
Explanation
According to the risk-based approach, financial institutions should apply enhanced due diligence and ongoing monitoring to higher-risk clients, and take appropriate measures to mitigate the risks of money laundering and terrorist financing. If the client exceeds the criteria of an acceptable risk model created by the institution, the institution should communicate the issues to the client and request remedial actions, such as providing additional information, documentation, or evidence of compliance. If the client does not cooperate or comply with the institution's requirements, the institution should consider terminating the relationship with the client, as the risk may outweigh the benefits of continuing the business relationship.
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