Discuss Acams CKYCA Exam Topic 3 Question 7

A politically exposed person (PEP) is eager to open a private account with an international bank. In addition to performing the normal CDD, which measure should be required from the AML officer?

AConduct enhanced ongoing monitoring of the business relationship each quarter.

BObtain senior management approval for establishing such business relationships.

CContact law enforcement, as PEPs pose enhanced risks to an institution.

DMake a note of a PEP business relationship and file a suspicious transaction report to the local financial intelligence unit.

Suggested Answer: B

FATF requires that before establishing a business relationship with a PEP, financial institutions must obtain senior management approval, along with applying enhanced due diligence measures such as verifying the source of wealth and funds.

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29 comments · newest first

Peggy 8 months ago

D could be useful, but it feels reactive. Better to get approval first.

Nathalie 8 months ago

C seems extreme. Contacting law enforcement might not be necessary.

Richelle 8 months ago

I agree, but A is also important. Ongoing monitoring is crucial.

Iraida 9 months ago

Isn't it surprising how many banks still overlook these risks?

Theodora 9 months ago

Totally agree with B, can't take any chances with PEPs!

Mauricio 9 months ago

I think A is crucial too, ongoing monitoring is key!

Raymon 9 months ago

"PEPs, the VIPs of money laundering!" (Humorous and relevant comment)

Yuriko 9 months ago

B) Obtain senior management approval for establishing such business relationships. Gotta cover your bases when dealing with a PEP.

Yaeko 9 months ago

C) Contact law enforcement, as PEPs pose enhanced risks to an institution. Whoa, that's a bit extreme, don't you think?

Jesusita 10 months ago

D) Make a note of a PEP business relationship and file a suspicious transaction report to the local financial intelligence unit. Better safe than sorry, right?

Frank 10 months ago

A) Conduct enhanced ongoing monitoring of the business relationship each quarter. Seems like a good idea to keep a close eye on a PEP's account.

Ilda 10 months ago

I practiced a similar question where filing a suspicious transaction report was emphasized, but I wonder if that's the best option here.

Graciela 10 months ago

I feel like contacting law enforcement might be too extreme unless there's clear evidence of wrongdoing.

Lenita 10 months ago

B) Obtain senior management approval for establishing such business relationships. This is the correct answer as PEPs require enhanced due diligence.

Zana 10 months ago

Definitely B, senior management needs to be involved with PEPs.

Hershel 11 months ago

I think B is the best choice. Senior management should approve PEP accounts.

Germaine 11 months ago

Wait, why would we contact law enforcement? Seems extreme.

Reita 11 months ago

"I bet the bank's compliance team is having a field day with this one!" (Humorous comment)

Launa 11 months ago

I think obtaining senior management approval is crucial for PEPs, especially since they pose higher risks.

Curtis 11 months ago

I remember that PEPs require additional scrutiny, but I'm not sure if quarterly monitoring is enough.

Anthony 12 months ago

I feel pretty confident that the correct answer is option B. Obtaining senior management approval is a standard requirement when dealing with PEPs, as they present heightened money laundering and reputational risks. The other options don't seem as appropriate in this scenario.

Marjory 12 months ago

Hmm, this is a tricky one. I'd say the best approach is to go with option B and get senior management approval. That seems like the most prudent way to handle a PEP relationship and mitigate any potential risks to the institution.

Noah 1 year ago

I'm a bit confused on this one. Is option C the right answer? I know PEPs can pose risks, but I'm not sure if contacting law enforcement is the right step here. Maybe the enhanced ongoing monitoring in option A would be better?

Bok 1 year ago

I think the key here is that a PEP poses enhanced risks, so the AML officer should be required to obtain senior management approval for establishing the business relationship. That seems like the most appropriate measure to take.

Misty 7 months ago

↳ replying to Bok

I think a suspicious transaction report is necessary too.

Gail 7 months ago

↳ replying to Bok

True, but contacting law enforcement might be overkill.

Lanie 7 months ago

↳ replying to Bok

Enhanced monitoring is also important, but approval first!

Royce 7 months ago

↳ replying to Bok

Definitely! They can bring a lot of scrutiny.

Arlette 7 months ago

↳ replying to Bok

I agree, senior management approval is crucial for PEPs.

Acams CKYCA Exam - Topic 3 Question 7 Discussion