TheBasel Committee’s AML guidelinesemphasizerisk-based customer due diligence (CDD) and beneficial ownership transparency.
Option A (Correct):CDD policies must be risk-basedto applyenhanced due diligence (EDD) for high-risk customersandsimplified due diligence (SDD) for low-risk customers.
Option C (Correct):Banksmust verify the identity of customers and beneficial ownersto prevent financial crime risks.
Why Other Options Are Incorrect:
Option B (Incorrect):Numbered accountsare not strictly prohibitedbut requirestrict transparency and due diligence measures.
Option D (Incorrect):CDD proceduresmust be risk-based, not uniform across all customers.
Option E (Incorrect):Transactionsshould not be processed until full due diligence is completed, except in rare cases where regulatory exceptions apply.
Best Practices for Risk-Based Customer Due Diligence:
Apply EDD for high-risk entities (e.g., PEPs, offshore companies).
Ensure full beneficial ownership transparency.
Implement ongoing transaction monitoring for risk assessment.
[Reference:, Basel Committee’s “Sound Management of ML/TF Risks”, FATF Recommendation 10 (Customer Due Diligence), 6th EU AML Directive (6AMLD) on Beneficial Ownership Transparency, , , , ]
