The new KYC lead at a bank is particularly focused on enhancing the risk management component of its KYC program and refers to the Basel Committee's customer due diligence (CDD) principles. Which of…

The Basel Committee's CDD principles do not advocate for a blacklist-based approach to correspondent customers; instead they promote a risk-based framework for ongoing due diligence, and blacklisting is a separate sanctions or policy control not derived from Basel CDD.

The Basel Committee's CDD paper explicitly calls for financial institutions to develop and enhance customer acceptance policies that clearly define criteria for identifying customers who pose higher money laundering or terrorist financing risks, enabling more targeted due diligence.

While training is an important component of an AML program, increasing front-office training frequency is not among the key enhancements specifically outlined in the Basel Committee's CDD principles, which focus on structural program components rather than training cadence.

The Basel CDD principles also require enhanced identification procedures specifically designed to identify and verify the beneficial owners behind legal arrangements such as trusts, nominees, and shell companies, addressing key vulnerabilities in standard KYC processes.