Which Trust parties should be identified to determine the true nature of the Trust relationship according to Basel guidelines? (Choose three.)
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A. B. C. D. E. F.BDE
According to the Basel Committee on Banking Supervision's "Customer Due Diligence for Banks" guidance, identifying the parties involved in a trust relationship is an essential component of a risk-based approach to anti-money laundering (AML) compliance. This involves understanding the true nature of the trust relationship, as well as the roles and responsibilities of each party.
The three Trust parties that should be identified to determine the true nature of the Trust relationship, according to the Basel guidelines, are as follows:
Trustees: Trustees are responsible for managing the trust assets and carrying out the wishes of the trust beneficiaries as set out in the trust deed. It is important to identify the trustee(s) to understand their role and responsibilities, including their authority to make decisions on behalf of the trust.
Beneficiaries: Beneficiaries are the individuals or entities that stand to benefit from the trust assets. Identifying the beneficiaries is essential for understanding the purpose of the trust, the potential risks associated with it, and the source of funds.
Settlors/Grantors: Settlors or grantors are the individuals or entities that establish the trust and transfer assets into it. Identifying the settlor/grantor is important for understanding the origin of the trust assets, the purpose of the trust, and any potential risks associated with it.
Respondents, payees, and trust administrators are not specifically mentioned as key parties to identify in the Basel guidelines for determining the true nature of the trust relationship. However, they may be relevant depending on the particular circumstances of the trust, and their roles and responsibilities should be considered as part of a risk-based approach to AML compliance.
Overall, identifying the parties involved in a trust relationship and understanding their roles and responsibilities is critical for effective AML compliance and risk management, particularly when dealing with high-risk clients or transactions.