Which factor would be a reason for concern when corroborating the source of wealth of an individual client?
Answer(s): A
Inconsistent or changing explanations from a client when asked for supplementary information about their wealth can indicate potential misrepresentation or concealment, making it a key red flag during source of wealth verification.
In automated screening, a "false positive" match is a match which:
In automated screening, a "false positive" occurs when the system flags a potential match to a sanctions list, PEP list, or adverse media, but upon manual review it is determined that the match is incorrect.
An owner of several trading companies worldwide is advised to register a new company for the legitimate purpose of controlling foreign assets of their trading companies. This new company is commonly referred to as a:
A holding company is established to own and control shares or assets of other companies, often for organizational, tax, or asset protection purposes, without engaging directly in the day-to-day operations of those businesses.
In which circumstance must a KYC analyst obtain source of wealth information on a client subject to CDD?
Answer(s): D
FATF requires obtaining and verifying source of wealth information in higher-risk situations, such as when there is increased involvement with high-risk jurisdictions or Politically Exposed Persons (PEPs), as part of enhanced due diligence.
Customers opening accounts online identify their occupation from a drop-down list. A KYC analyst notices a high volume of applicants selecting "Accountant" because itis at the top of the list. The institution's KYC policy does not require evidence to verify occupation.Which is the most appropriate action for the KYC analyst to take?
A sudden pattern in occupation selection can indicate inaccurate self-reporting or potential misuse of the onboarding process. Even if policy does not require occupation verification, such anomalies should be escalated to the KYC manager for review and potential policy or process adjustments.
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