Enhanced Due Diligence (EDD) applies to high-risk customers and transactions, includingpolitically exposed persons (PEPs), high-risk jurisdictions, and correspondent banking relationships.
Option C (Correct):Correspondent banking relationships with high-risk jurisdictions require EDDto prevent cross-border financial crime.
Option D (Correct):Ambassadors are considered PEPs, which require EDD due to corruption risks.
Option E (Correct):A current prime minister is a high-profile PEP, requiringEDD and ongoing transaction monitoring.
Why Other Options Are Incorrect:
Option A (Incorrect):The individual no longer holds a PEP position and is in a low-risk country, soEDD is not required.
Option B (Incorrect):A local footballer does not present a high financial crime risk warranting EDD.
EDD Best Practices for High-Risk Customers:
Verify the source of wealth and funds for PEPs.
Conduct ongoing transaction monitoring on high-risk accounts.
Apply stricter controls on correspondent banking with high-risk jurisdictions.
[Reference:, FATF Recommendation 10 & 12 (EDD & PEPs), Basel Committee’s Correspondent Banking Guidelines, Wolfsberg Group Guidance on High-Risk Customers & EDD, , , , ]
