Which of the following scenarios warrants enhanced due diligence (EDD)? (Select Three.)

The correct answer is C. A bank located in a higher-risk country trying to establish a correspondent-respondent banking D. An individual with a current bank account who resides in one country becoming the ambassador E. The current prime minister of a country trying to open a bank account in another country. Enhanced Due Diligence (EDD) applies to high-risk customers and transactions, including politically exposed persons (PEPs), high-risk jurisdictions, and correspondent banking Option C (Correct): Correspondent banking relationships with high-risk jurisdictions require EDD to…

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Question

Options

AThe former personal secretary to the minister of transport in a low-risk country 25 years ago
BAn existing local league footballer trying to open a bank account with a bank in their local
CA bank located in a higher-risk country trying to establish a correspondent-respondent banking
DAn individual with a current bank account who resides in one country becoming the ambassador
EThe current prime minister of a country trying to open a bank account in another country.

How the community answered

(31 responses)

A
13% (4)
B
6% (2)
C
81% (25)

Explanation

Enhanced Due Diligence (EDD) applies to high-risk customers and transactions, including politically exposed persons (PEPs), high-risk jurisdictions, and correspondent banking Option C (Correct): Correspondent banking relationships with high-risk jurisdictions require EDD to prevent cross-border financial crime. Option D (Correct): Ambassadors are considered PEPs, which require EDD due to corruption Option E (Correct): A current prime minister is a high-profile PEP, requiring EDD and ongoing transaction monitoring.

Topics

#enhanced due diligence#PEPs#correspondent banking#risk-based approach

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