CAMS · Question #63
A U.K. real estate agent has three foreign clients interested in purchasing an apartment building, valued at ?0 million, in the outskirts of London as an investment property. The clients are not…
The correct answer is C. The clients are not willing to have their names provided to the bank. The clients are not willing to have their names provided to the bank is a red flag that should stop the agent from discussing this potential purchase further, as this could indicate that the clients are trying to evade customer due diligence (CDD) or know your customer (KYC)…
Question
A U.K. real estate agent has three foreign clients interested in purchasing an apartment building, valued at ?0 million, in the outskirts of London as an investment property. The clients are not willing to have their names provided to the bank. The clients want to purchase to be made in the names of three private companies for privacy reasons. The plan is to wire the funds into an account held in the name of another private company at a bank in London. Which red flag should stop the agent from discussing this potential purchase further?
Options
- AThe clients are foreign
- BThe clients have the funds necessary to fund a ?0 million purchase
- CThe clients are not willing to have their names provided to the bank
- DThe clients want to purchase to be made in the names of the private companies
How the community answered
(16 responses)- B6% (1)
- C81% (13)
- D13% (2)
Explanation
The clients are not willing to have their names provided to the bank is a red flag that should stop the agent from discussing this potential purchase further, as this could indicate that the clients are trying to evade customer due diligence (CDD) or know your customer (KYC) requirements, or hide their beneficial ownership or source of funds. According to the U.K. Money Laundering Regulations 2017, real estate agents must conduct CDD on their customers and any beneficial owners, and verify their identity and address. The U.K. also has a register of people with significant control (PSC) over companies, which requires companies to disclose their beneficial owners. The use of private companies and wire transfers could also be a sign of layering, a money laundering technique that involves moving funds through multiple accounts or entities to obscure their origin.
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