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Answer: Jack's identity must be established and verified before carrying out any transactions
## Explanation **Option A is correct** because under anti-money laundering (AML) and know your customer (KYC) regulations, financial institutions must establish and verify a customer's identity before conducting any transactions. This is a fundamental requirement of customer due diligence (CDD) procedures. **Option B is incorrect** because banks are not required to avoid high-risk customers entirely. Instead, they must apply enhanced due diligence (EDD) measures to manage and monitor higher-risk relationships appropriately. **Option C is incorrect** because having an account at a reputable bank does not automatically classify a customer as low-risk. Each financial institution must conduct its own independent risk assessment and due diligence. **Option D is incorrect** because politically exposed persons (PEPs) are generally considered higher-risk customers due to their potential for corruption and money laundering risks. They require enhanced due diligence, not classification as low-risk. Media scrutiny does not substitute for proper financial institution due diligence.
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Which of the following statements is TRUE about Jack Ryan's application?
A
Jack's identity must be established and verified before carrying out any transactions
B
Because Jack is a high-risk customer, the bank is required to avoid him like any high-risk customer
C
Because Jack already has an account at a reputable bank, he can be classified as low risk and well-identified
D
If Jack is a politically exposed person (PEP), he can be classified as low-risk on the assumption that the media already vets him and he cannot evade scrutiny.
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