CAMS · Question #477
Which situation would require enhanced due diligence be performed on a customer?
The correct answer is C. Company ownership is held in bearer share form. Company ownership is held in bearer share form. Bearer share ownership can make it difficult to identify the actual owners of a company and is therefore considered a high risk for money laundering or terrorist financing. Enhanced due diligence measures may include obtaining…
Question
Which situation would require enhanced due diligence be performed on a customer?
Options
- AA customer closes their store location and opens a new store location across town.
- BA prospective customer recently started and incorporated a new business.
- CCompany ownership is held in bearer share form.
- DThe low-risk rating for a customer has not changed since the relationship was established 5 years
How the community answered
(36 responses)- A8% (3)
- B3% (1)
- C78% (28)
- D11% (4)
Explanation
Company ownership is held in bearer share form. Bearer share ownership can make it difficult to identify the actual owners of a company and is therefore considered a high risk for money laundering or terrorist financing. Enhanced due diligence measures may include obtaining additional identification and ownership information, conducting more frequent reviews of the account, and monitoring transactions more closely.
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