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Explanation:
The correct answer is A.
Establishing robust customer due diligence (CDD) procedures is a foundational element of a comprehensive Anti-Money Laundering (AML) risk management program. CDD ensures that the bank proactively verifies the identity of its clients, assesses the money laundering risks they may pose, and continuously monitors their activities. This indicates a systemic and preventative approach to AML risk management.
Choice B is incorrect. Never having a customer involved in a money laundering scheme does not necessarily indicate comprehensive AML risk management; it could merely reflect a failure to detect such activities or a coincidental streak of low-risk clients.
Choice C is incorrect. While hiring a CEO with extensive AML experience is a strong tone-from-the-top initiative, it does not justify the claim that the bank's actual, operational practices are comprehensive without evidence of implemented frameworks.
Choice D is incorrect. Reporting suspicious transactions is a necessary reactive step and part of an AML program, but on its own, it does not demonstrate that the bank has a comprehensive framework, which requires preventative controls like robust CDD.
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Q.5125 The CEO of a bank highlights that the bank is practicing comprehensive AML risk management. Which of the following statements would justify the CEO's claim that the bank is practicing comprehensive Anti-Money Laundering (AML) risk management?
A
The bank has established robust customer due diligence procedures.
B
The bank has never had a customer involved in a money laundering scheme.
C
The bank has hired a new CEO with extensive experience in AML risk management.
D
The bank has reported suspicious transactions to the relevant authorities.