ACAMS Beneficial Ownership and Politically Exposed Persons (PEPs) 2

Question 1

When a legal entity customer is a publicly traded company on a US exchange, how does FinCEN's CDD Rule treat beneficial ownership requirements?

Accepted Answer

Covered financial institutions may exclude these entities from beneficial ownership identification requirements

Answer

FinCEN's CDD Rule provides exclusions for certain regulated entities, including companies listed on US stock exchanges, because their ownership is already subject to SEC disclosure requirements.

Question 2

What is the primary AML risk concern when onboarding a PEP as a customer?

Accepted Answer

Elevated risk of bribery, corruption proceeds, or abuse of public office being laundered through the institution

Answer

PEPs pose elevated AML risk because their public positions may give them access to state funds or opportunities for bribery and corruption, making them potential conduits for laundering illicit proceeds.

Question 3

For PEP relationships, FATF Recommendation 12 requires which specific additional measure beyond standard CDD?

Accepted Answer

Senior management approval for establishing or continuing the business relationship

Answer

FATF Recommendation 12 requires senior management approval for establishing or continuing business relationships with PEPs, in addition to enhanced due diligence measures.

Question 4

What is a 'nominee director' and why is it relevant to beneficial ownership risk?

Accepted Answer

A person who appears as a director in public records but acts on behalf of an undisclosed third party, obscuring true control

Answer

Nominee directors appear on public corporate records while the actual controlling person remains hidden, a common technique used to obscure beneficial ownership in shell company structures.

Question 5

Which of the following is a 'close associate' of a PEP for AML purposes?

Accepted Answer

A natural person known to have close business relations with a PEP or who is in a position to conduct transactions on behalf of the PEP

Answer

FATF guidance defines close associates as individuals with known close business relationships with PEPs or who hold positions enabling them to transact on the PEP's behalf, extending PEP risk beyond immediate family.

(ACAMS) Association of Certified Anti-Money Laundering Specialists Practice Test

(ACAMS) Association of Certified Anti-Money Laundering Specialists Practice Test

ACAMS Beneficial Ownership and Politically Exposed Persons (PEPs) 2