CAMS · Question #921
According to the Financial Action Task Force (FATF) Recommendation 22. when involved in customer transactions that include the buying and selling of real estate, real estate professionals are…
The correct answer is B. Understanding the purpose of the business relationship D. Identifying and verifying the customer's identity. FATF Recommendation 22 extends CDD obligations from Recommendation 10 to designated non-financial businesses and professions (DNFBPs) such as real estate professionals, requiring them to apply core CDD measures when involved in property transactions.
Question
According to the Financial Action Task Force (FATF) Recommendation 22. when involved in customer transactions that include the buying and selling of real estate, real estate professionals are required to apply which customer due diligence (CDD) measures? (Select Two.)
Options
- AObtaining prior senior manager approval for all related transactions
- BUnderstanding the purpose of the business relationship
- CPerforming adverse media searches on the customer
- DIdentifying and verifying the customer's identity
How the community answered
(34 responses)- A9% (3)
- B74% (25)
- C18% (6)
Why each option
FATF Recommendation 22 extends CDD obligations from Recommendation 10 to designated non-financial businesses and professions (DNFBPs) such as real estate professionals, requiring them to apply core CDD measures when involved in property transactions.
Senior manager approval is required under enhanced due diligence for high-risk categories such as politically exposed persons, not as a standard CDD requirement for all real estate transactions under Recommendation 22.
Understanding the purpose and intended nature of the business relationship is a core CDD measure under FATF Recommendation 10, applied to real estate professionals via Recommendation 22, helping identify whether a transaction has a legitimate economic rationale.
Adverse media screening is not listed as a standalone mandatory CDD measure under FATF Recommendation 22; it may form part of enhanced due diligence but is not among the core CDD obligations for real estate professionals.
Identifying and verifying the customer's identity is the foundational CDD requirement under FATF Recommendation 10 and is explicitly extended to DNFBPs including real estate agents through Recommendation 22 when they transact on behalf of clients.
Concept tested: FATF Recommendation 22 CDD obligations for DNFBPs
Source: https://www.fatf-gafi.org/en/topics/fatf-recommendations.html
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