CAMS · Question #866
Which control would be most effective as part of a risk-based approach (RBA) to managing AML/CFT risk for a bank established in the EU that also has a branch in a high-risk third country outside of…
The correct answer is B. Apply tailored due diligence measures, based on the level of risk posed by each customer. As part of a risk-based approach, the bank should apply tailored due diligence measures based on the assessed risk level of each customer. This ensures resources are focused where they are most needed, rather than applying uniform enhanced measures to all customers, which can…
Question
Which control would be most effective as part of a risk-based approach (RBA) to managing AML/CFT risk for a bank established in the EU that also has a branch in a high-risk third country outside of the EU?
Options
- AFully rely on central beneficial owner registry records in the high-risk third country to determine
- BApply tailored due diligence measures, based on the level of risk posed by each customer
- CMonitor every cross-border transaction in real time, flagging all for enhanced scrutiny due to the
- DAutomatically apply enhanced customer due diligence measures to all customers in the high-risk
How the community answered
(15 responses)- B80% (12)
- C7% (1)
- D13% (2)
Explanation
As part of a risk-based approach, the bank should apply tailored due diligence measures based on the assessed risk level of each customer. This ensures resources are focused where they are most needed, rather than applying uniform enhanced measures to all customers, which can be inefficient and unnecessary.
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