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FIC Act FIC Act Compliance (CDD, AML/CFT, Reporting)
A representative is unsure whether a client qualifies as a politically exposed person. What is the prudent FIC Act approach?
RE5 practice question with a worked answer. This is one of hundreds of FSCA RE5 questions in the RegulatoryExams question bank.
- a) Apply the FSP’s risk-based procedures to establish PEP status and, if confirmed, apply enhanced due diligence with senior-management approval.Correct
- b) Assume the client is low risk and skip any checks.
- c) Refuse to deal with anyone who might be a PEP.
- d) Ask the client to self-certify and do nothing further.
Why this is the answer
The risk-based approach requires establishing PEP status and, where confirmed, applying enhanced due diligence (including source of funds and senior-management approval). Skipping checks or relying solely on self-certification is inadequate; an outright ban is not required.
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