CAMS KYC and Customer Due Diligence

Question 1

What are the three levels of customer due diligence recognized in AML frameworks?

Accepted Answer

Simplified, standard, enhanced

Answer

Basic, standard, comprehensive

Answer

Low, medium, high

Answer

Initial, ongoing, exit

Question 2

Under FinCEN's Customer Due Diligence (CDD) Rule, which category of beneficial owner must be identified for legal entities?

Accepted Answer

Each individual owning 25% or more of the entity and one control person

Answer

Any individual with a financial interest in the entity

Answer

All employees with signatory authority

Answer

All shareholders regardless of ownership percentage

Question 3

What is the primary purpose of Enhanced Due Diligence (EDD)?

Accepted Answer

To gather additional information on high-risk customers to better understand and mitigate risk

Answer

To expedite account opening for low-risk customers

Answer

To comply with credit underwriting requirements

Answer

To satisfy FATCA reporting obligations for foreign accounts

Question 4

Which of the following is a valid document for verifying individual customer identity under a U.S. Customer Identification Program (CIP)?

Accepted Answer

Unexpired government-issued photo ID such as a passport or driver's license

Answer

Utility bill

Answer

Pay stub

Answer

Bank statement from another institution

Question 5

What does 'ongoing customer due diligence' require financial institutions to do?

Accepted Answer

Continuously monitor customer transactions and update customer information to ensure profiles remain current and accurate

Answer

Conduct full KYC reverification every 30 days for all customers

Answer

File a SAR every time a customer's behavior changes

Answer

Re-verify customer identity each time a transaction is initiated

Question 6

A Politically Exposed Person (PEP) is best defined as:

Accepted Answer

An individual who holds or has held a prominent public function, posing higher corruption and bribery risks

Answer

Any foreign national who opens an account at a U.S. bank

Answer

A customer who has previously been reported in a SAR

Answer

Any customer with assets over $1 million