An agent is conducting due diligence on a high-value international client under AML/CTF requirements. The client claims to be a Politically Exposed Person (PEP). What additional obligations does this trigger?
Correct Answer
B) Enhanced due diligence and senior management approval of the relationship
PEPs require enhanced due diligence measures including additional verification of identity, source of funds, and senior management approval before establishing the business relationship. This heightened scrutiny reflects the increased risk associated with politically exposed persons.
Why This Is the Correct Answer
A foreign politically exposed person is a high-risk customer. The AML/CTF rules require enhanced due diligence, including source of funds and wealth, and senior management approval before starting or continuing the relationship.
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