CAMS Question #648: Real Exam Question with Answer & Explanation

The correct answer is C. Perform enhanced due diligence for the customer and update the KYC profile.. When an existing customer becomes a politically exposed person (PEP), the KYC analyst should perform enhanced due diligence (EDD) for that customer. EDD involves gathering additional information about the customer, assessing the risk associated with their PEP status, and updating

Question

When an existing customer becomes a politically exposed person (PEP), what should the KYC analyst do during the review/refresh period?

Options

ASeek the compliance officer's advice before marking the authorized signatory as PEP.
BUpdate the new authorized signatories in the customer profile.
CPerform enhanced due diligence for the customer and update the KYC profile.
DUpdate the list of signatories and perform enhanced due diligence in the next periodic refresh

Explanation

When an existing customer becomes a politically exposed person (PEP), the KYC analyst should perform enhanced due diligence (EDD) for that customer. EDD involves gathering additional information about the customer, assessing the risk associated with their PEP status, and updating the KYC profile accordingly. The goal is to ensure compliance with regulations, verify customer identities, and mitigate the higher risk posed by PEPs. Regular monitoring and updates during the review/refresh period are essential to stay informed about any changes in the customer's status or risk profile.

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