Which statement best describes a key aspect of the AML Directive of the EU regarding business relationships and transactions with high-risk third countries?

Question

Options

• AObliged entities should voluntarily consider the implementation of increased external audit
• BObliged entities, in accordance with the member state regulations, should determine at a national
• CObliged entities should implement additional mitigating measures complementary to the
• DObliged entities should not take into account specific circumstances when performing enhanced

• A
  4% (1)
• B
  8% (2)
• C
  84% (21)
• D
  4% (1)

Explanation

According to the AML Directive of the EU, obliged entities, such as banks and other financial institutions, are required to apply enhanced vigilance in business relationships and transactions involving high-risk third countries, which are those identified by the Commission as having strategic deficiencies in their anti-money laundering and countering the financing of terrorism regimes. The types of enhanced vigilance requirements are basically extra checks and control measures which are defined in article 18a of the Directive. However, these requirements are not exhaustive, and obliged entities should also implement additional mitigating measures that are complementary to the enhanced customer due diligence procedures, in accordance with a risk based approach. This means that obliged entities should assess the level of risk posed by each customer, product, service, transaction, or delivery channel, and apply appropriate measures to mitigate those risks. The additional mitigating measures may include, for example, obtaining additional information on the customer and the beneficial owner, applying additional elements of enhanced monitoring, increasing the frequency and intensity of transaction testing, or requiring the first payment to be carried out through an account in the customer's name with a bank subject to similar customer due diligence standards.

No community discussion yet for this question.