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FIC Act FIC Act Compliance (CDD, AML/CFT, Reporting)
A prospective client is the adult daughter of a foreign head of state. She holds no public office herself. What does the FIC Act require of an accountable institution that wishes to establish a business relationship with her?
RE5 practice question with a worked answer. This is one of hundreds of FSCA RE5 questions in the RegulatoryExams question bank.
- a) The enhanced measures only if her father is also a client of the same accountable institution.
- b) Refusal of the relationship, because relatives of foreign heads of state may not be accepted as clients.
- c) Standard due diligence only, because she holds no prominent public function in her own right.
- d) The enhanced measures for a foreign politically exposed person, because they extend to immediate family members.Correct
Why this is the answer
The enhanced measures for politically exposed persons (senior management approval, establishing source of wealth and source of funds, and enhanced ongoing monitoring) also apply to their immediate family members and known close associates. Her own lack of office and her father's status as a client are irrelevant, and the Act does not prohibit the relationship.
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