Which red flags should be considered prior to establishing a relationship with a third party? (Select Two.)

The correct answer is A. The third party has a lack of anti-corruption compliance clauses in agreements. C. The third party has requested unusual payment or billing procedures. The red flags that should be considered prior to establishing a relationship with a third party are the lack of anti-corruption compliance clauses in agreements (A) and unusual payment or billing procedures requested by the third party (C). According to the Certified Anti-Money…

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Question

Options

AThe third party has a lack of anti-corruption compliance clauses in agreements.
BThe third party's amount to be paid for goods and services appears to be reasonable.
CThe third party has requested unusual payment or billing procedures.
DThe third party has a declaration of non-family or business ties with government officials.
EThe third party has sufficient capability to provide the services or goods for which it is being

How the community answered

(28 responses)

A
79% (22)
B
7% (2)
D
11% (3)
E
4% (1)

Explanation

The red flags that should be considered prior to establishing a relationship with a third party are the lack of anti-corruption compliance clauses in agreements (A) and unusual payment or billing procedures requested by the third party (C). According to the Certified Anti-Money Laundering Specialist (CAMS) Sixth Edition manual, "red flags include, but are not limited to: [...] lack of anti- corruption compliance clauses in agreements (page 330) and unusual payment or billing procedures requested by the third party (page 331)."

Topics

#third-party due diligence#red flags#anti-corruption#unusual payment procedures

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