When onboardingnew corporate customers,financial institutions must conduct thorough due diligence (KYC/CDD)to assess therisk profileof the business.

Option A (Correct):Knowing the customer’s business activityiscriticalto identifying if it is ahigh-risk industry(e.g., cash-intensive businesses, virtual assets, shell companies).

Option D (Correct):Identifyingsenior management and account operatorsensures that therightful owners and controllersare known.

Option E (Correct):Jurisdictional riskis a key factor. If the company operates in ahigh-risk country, enhanced due diligence (EDD) may be required.

Option B (Incorrect):Employment profiles ofall employeesarenot relevantunless the employees arepolitically exposed persons (PEPs)or linked to financial crime.

Option C (Incorrect):Knowing where a business previously bankedis not standard practiceunless the entity is flagged forsuspicious activity.

AML Risks in Corporate Banking:

Shell Companies & Complex Ownership Structures:Can be used tohide beneficial ownersand launder illicit funds.

High-Risk Countries & Sanctions Exposure:Customers linked tohigh-risk jurisdictions (FATF Grey/Blacklist)may requireEDD measures.

Unusual Business Nature:Some businesses (e.g.,cash-intensive industries, cryptocurrency firms) havehigher financial crime risks.

Best Practices:

Conduct KYC/CDD at account openingandperiodic reviewsfor risk management.

Use beneficial ownership registriesto verify theultimate beneficial owners (UBOs).

Cross-check against sanction lists(OFAC, UN, EU, etc.).