What is the appropriate compliance control for identifying politically exposed persons (PEPs) according to the Basel Committee’s paper on Customer Due Diligence for Banks?
A.
Determining that a local figure is a PEP
B.
Reviewing when a relationship is established
C.
Reviewing relationships at account opening and on a periodic basis
D.
Requiring that the customer discloses that they are a PEP or an associate of a PEP
According to the Basel Committee’s paper on Customer Due Diligence for Banks1, banks should review their existing customer relationships on a regular basis, especially for higher risk categories of customers or business relationships. This includes identifying whether the customer or the beneficial owner is a PEP, either at the account opening stage or later, as a result of a change in the customer’s circumstances or profile. The paper also states that banks should apply a risk-based approach to determine the appropriate level and type of due diligence depending on the risk profile of the customer or the beneficial owner.
Basel Committee on Banking Supervision, Customer due diligence for banks, October 20011
FATF Guidance: Politically Exposed Persons (Recommendations 12 and 22), June 20132
ACAMS, CAMS Examination Study Guide, 6th Edition, Chapter 4
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