When onboarding new corporate customers, financial institutions must conduct thorough due diligence (KYC/CDD) to assess the risk profile of the business.
Option A (Correct): Knowing the customer's business activity is critical to identifying if it is a high-risk industry (e.g., cash-intensive businesses, virtual assets, shell companies).
Option D (Correct): Identifying senior management and account operators ensures that the rightful owners and controllers are known.
Option E (Correct): Jurisdictional risk is a key factor. If the company operates in a high-risk country, enhanced due diligence (EDD) may be required.
Option B (Incorrect): Employment profiles of all employees are not relevant unless the employees are politically exposed persons (PEPs) or linked to financial crime.
Option C (Incorrect): Knowing where a business previously banked is not standard practice unless the entity is flagged for suspicious activity.
AML Risks in Corporate Banking:
Shell Companies & Complex Ownership Structures: Can be used to hide beneficial owners and launder illicit funds.
High-Risk Countries & Sanctions Exposure: Customers linked to high-risk jurisdictions (FATF Grey/Blacklist) may require EDD measures.
Unusual Business Nature: Some businesses (e.g., cash-intensive industries, cryptocurrency firms) have higher financial crime risks.
Best Practices:
Conduct KYC/CDD at account opening and periodic reviews for risk management.
Use beneficial ownership registries to verify the ultimate beneficial owners (UBOs).
Cross-check against sanction lists (OFAC, UN, EU, etc.).
Reference:
FATF Recommendation 10 (Customer Due Diligence)
6th EU Anti-Money Laundering Directive (6AMLD)
Wolfsberg Group Guidance on Corporate Banking Risks

The bank's current anti-money laundering program is inadequate because it does not include a process for monitoring customer account activity, which is a key component of detecting and reporting suspicious transactions. The fact that the consultant and the bank have mutual clients does not affect the risk rating of those customers, nor does it justify a lower level of scrutiny. The bank should revise its procedures to ensure that it has a comprehensive and risk-based approach to customer due diligence, transaction monitoring, and reporting.
:
CAMS Certification Package - 6th Edition, Chapter 3: Compliance Standards for Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT), pp. 67-69.
FATF Guidance for a Risk-Based Approach: Legal Professionals, pp. 10-11, 19-20.
BSA/AML Internal Audit: PwC, pp. 1-2.

According to the AML Directive of the EU, obliged entities, such as banks and other financial institutions, are required to apply enhanced vigilance in business relationships and transactions involving high-risk third countries, which are those identified by the Commission as having strategic deficiencies in their anti-money laundering and countering the financing of terrorism regimes1. The types of enhanced vigilance requirements are basically extra checks and control measures which are defined in article 18a of the Directive1. However, these requirements are not exhaustive, and obliged entities should also implement additional mitigating measures that are complementary to the enhanced customer due diligence procedures, in accordance with a risk based approach1. This means that obliged entities should assess the level of risk posed by each customer, product, service, transaction, or delivery channel, and apply appropriate measures to mitigate those risks2. The additional mitigating measures may include, for example, obtaining additional information on the customer and the beneficial owner, applying additional elements of enhanced monitoring, increasing the frequency and intensity of transaction testing, or requiring the first payment to be carried out through an account in the customer's name with a bank subject to similar customer due diligence standards1.
:
1: Directive (EU) 2018/843 of the European Parliament and of the Council of 30 May 2018 amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing, and amending Directives 2009/138/EC and 2013/36/EU (Text with EEA relevance)
2: Guidance on Risk Factors, EBA, 2021
Reference: https://www.nortonrosefulbright.com/en/knowledge/publications/8f84c163/the-eus-fifth-anti- money-laundering-directive-a-regulatory-compliance-perspective

RefThis transaction should result in a SAR/STR filing because it indicates possible structuring, which is a form of money laundering that involves breaking down large amounts of cash into smaller deposits to avoid detection or reporting requirements. Structuring is often done to conceal the source or destination of illicit funds, or to evade taxes, regulations, or sanctions. A small business owner who deposits checks just below the
$10,000 USD threshold on a daily basis without providing a legitimate purpose raises a red flag for suspicious activity and should be reported to the relevant Financial Intelligence Unit.
:
Suspicious Transaction Report (STR) / Suspicious Activity Report (SAR)
What Is a Suspicious Activity Report (SAR)? Triggers and Filing
How to decide if SAR filing is needed
erence: https://aml-cft.net/library/suspicious-transaction-report-str-suspicious-activity-report-sar/