In accordance with Financial Action Task Force (FATF) standards, when the minimum AML requirements of the host country where a financial institution (Fl) operates are less strict than those of the…

Question

Options

• Ashould always apply additional measures on their branches and majority-owned subsidiaries in
• Bis required to ensure that their branches and majority-owned subsidiaries in host countries
• Cis required to impose more strict requirements on host country branches, disregarding if host
• Dshould close down its operations in the host countries where minimum AML requirements are less

• A
  4% (1)
• B
  77% (20)
• C
  12% (3)
• D
  8% (2)

Explanation

In accordance with Financial Action Task Force (FATF) standards[2], when the minimum AML requirements of the host country where a financial institution (Fl) operates are less strict than those of the Fl's home country, the Fl is required to ensure that their branches and majority- owned subsidiaries in host countries implement the requirements of the home country, to the extent that host country laws and regulations permit. This means that the Fl should not impose more strict requirements on host country branches, disregarding if host country laws and regulation permit such action, and should not close down its operations in the host countries where minimum AML requirements are less strict than those of the home country. However, the Fl should always apply additional measures on their branches and majority-owned subsidiaries in host countries to manage the money laundering and terrorist financing risk overseas.

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