FATF recommends the incorporation of some measures in customer due diligence (CDD) programs including:
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A. B. C. D.B
https://www.fatf-gafi.org/media/fatf/documents/recommendations/pdfs/FATF%20Recommendations%202012.pdf(15)
The Financial Action Task Force (FATF) is an international organization that sets standards and promotes measures for combating money laundering, terrorist financing, and other financial crimes. As part of its recommendations, FATF suggests that financial institutions should incorporate certain measures into their customer due diligence (CDD) programs.
The options given in the question are:
A. Conducting the risk assessment of products and services: This measure involves evaluating the level of risk associated with the financial products and services offered by a financial institution. The risk assessment helps to determine the appropriate level of due diligence required for each customer and the level of monitoring required for transactions involving those products or services.
B. Conducting ongoing due diligence on the business relationship and monitoring of transactions: This measure involves ongoing monitoring of customer transactions to detect any suspicious activity and to ensure that the customer's risk profile remains consistent with their expected behavior. The financial institution should conduct enhanced due diligence (EDD) for high-risk customers, such as politically exposed persons (PEPs).
C. Identifying the products and services and their suitability to customers: This measure involves identifying the products and services that are suitable for each customer based on their risk profile, financial capability, and other factors. The financial institution should ensure that customers understand the risks associated with each product or service.
D. Identifying the number of beneficial owners without the verification of their true identity: This measure involves identifying the beneficial owners of a customer, which refers to individuals who ultimately own or control the customer, and assessing the level of risk associated with them. The financial institution should verify the true identity of the beneficial owner(s) using reliable and independent sources of information.
Out of these measures, A, B, and C are recommended by FATF for financial institutions to incorporate in their CDD programs. However, D is not recommended as it contradicts the principle of knowing your customer (KYC) and verifying the true identity of customers and their beneficial owners.
In summary, financial institutions should conduct a risk assessment of their products and services, conduct ongoing due diligence on customer relationships and transactions, and identify suitable products and services for each customer in their CDD programs, according to FATF recommendations. They should also identify the beneficial owners of customers and verify their true identity.