CAMS KYC and Customer Due Diligence 2

Question 1

What is a 'beneficial owner' in the context of AML due diligence?

Accepted Answer

The natural person(s) who ultimately owns or controls a legal entity or on whose behalf a transaction is conducted

Answer

The bank that benefits from customer account fees

Answer

The legal entity itself as a corporate customer

Answer

Any signatory on a business account

Question 2

When should Enhanced Due Diligence (EDD) be applied to a customer?

Accepted Answer

When a customer is identified as high-risk due to factors such as PEP status, high-risk geography, or unusual activity

Answer

For all new customers at account opening regardless of risk

Answer

Only after a SAR has been filed on the customer

Answer

Only for customers whose transactions exceed $1 million per year

Question 3

What is a 'shell company' in the context of money laundering?

Accepted Answer

A legal entity with no significant assets or operations used primarily to obscure the true beneficial ownership of assets

Answer

A company that manufactures oil and gas equipment

Answer

A startup company with limited revenue in its early stages

Answer

A subsidiary of a multinational corporation

Question 4

Under the FinCEN CDD Rule, financial institutions must identify and verify beneficial owners of legal entity customers. What is the minimum ownership threshold that triggers this requirement?

Accepted Answer

25%

Answer

10%

Answer

15%

Answer

51%

Question 5

What is 'source of funds' verification in the context of EDD?

Accepted Answer

Identifying and documenting the origin of the money being deposited or used in a specific transaction

Answer

Confirming the routing and account number used for a wire transfer

Answer

Verifying the customer's employment history

Answer

Checking the originating bank's AML compliance record

Question 6

What is 'nominee ownership' and why is it an AML concern?

Accepted Answer

When a person holds legal title to assets on behalf of the true beneficial owner, obscuring the real owner's identity

Answer

When a government official nominates a financial institution for a compliance award

Answer

When a bank nominates a customer for a premium banking tier

Answer

When legal entities nominate employees as authorized signatories