The FATF 40 Recommendations outline global AML/CFT standards, including risk-based compliance and beneficial ownership transparency.
Option B (Correct): FATF requires nations to implement financial sanctions in coordination with the UN Security Council.
Option C (Correct): FATF emphasizes a risk-based approach (RBA) to prevent ML/TF.
Option E (Correct): FATF mandates transparency in beneficial ownership to prevent shell company misuse.
Why Other Options Are Incorrect:
Option A (Incorrect): FATF does not require institutions to avoid high-risk customers but to apply appropriate risk-based controls.
Option D (Incorrect): Governments do not need identical crime investigation frameworks but should ensure effective cooperation.
Best Practices for FATF Compliance:
Apply risk-based due diligence on high-risk customers.
Enhance beneficial ownership transparency measures.
Implement targeted financial sanctions in coordination with global authorities.
Reference:
FATF Recommendation 1 (Risk-Based Approach to AML)
FATF Recommendation 10 (Beneficial Ownership Transparency)
FATF Recommendation 6 (Sanctions & UN Coordination)

B: An internal auditor with the requisite knowledge and expertise of AML: An internal auditor with sufficient knowledge and expertise in AML regulations and compliance requirements can perform the AML audit.
D: Qualified bank staff if not involved in the AML function being tested: Qualified bank staff who are not involved in the AML function being audited can perform the AML audit.

According to the ACAMS study guide, one of the best practices for dealing with law enforcement inquiries is to verify the identity and authority of the law enforcement officer before providing any information (p. 224).
This is to ensure that the inquiry is legitimate and not a phishing attempt or a breach of confidentiality. The compliance officer should also document the inquiry and the information provided, and consult with legal counsel if necessary. The other options are not appropriate, as they may either violate the law, compromise the investigation, or create unnecessary work.
ACAMS. (2020). Study Guide for the Certification Examination for Anti-Money Laundering Specialists (6th ed.). Miami, FL: ACAMS.
What Is An AML Officer1

The Office of Foreign Assets Control (OFAC) is the U.S. Treasury Department's agency that administers and enforces economic sanctions programs against countries, groups, and individualsthat pose a threat to the national security, foreign policy, or economy of the U.S. OFAC's requirements have an extraterritorial reach because they apply not only to U.S. persons (citizens, permanent residents, entities, and those physically present in the U.S.), but also to any person or entity that engages in a transaction that has a connection to the U).S., such as using the U.S. financial system, U.S. goods, or U.S. persons. This means that intermediaries of a transaction with a U.S. nexus, such as foreign banks, brokers, or agents, are required to comply with OFAC's regulations and may face penalties for violating them. OFAC's jurisdiction does not depend on the registration or incorporation of an entity in the U.S., nor does it extend to foreign financial intelligence units, unless they are involved in a transaction with a U.S. nexus.
References:
The Aggressive Extraterritorial Reach of U.S. Economic Sanctions: Foreign Company Exposure to OFAC Enforcement OFAC Consolidated Frequently Asked Questions The global reach of OFAC sanctions Which three circumstances are U.S. banks required to block transactions?

According to the Wolfsberg Principles on Correspondent Banking1, an institution should consider the following three elements in its enhanced due diligence process for higher risk respondent bank customers:
* The quality of the respondent's AML and client identification controls: The correspondent should assess the adequacy and effectiveness of the respondent's AML policies, procedures, and systems, as well as its compliance with applicable AML laws and regulations. The correspondent should also verify that the respondent has implemented appropriate customer identification and verification measures, and that it maintains sufficient records of its customers and transactions.
* A risk-based determination as to whether or not the respondent is a shell bank: The correspondent should ensure that the respondent is not a shell bank, which is defined as a bank that has no physical presence in any country and is not affiliated with a regulated financial group. The correspondent should also avoid establishing or maintaining relationships with banks that are known to allow their accounts to be used by shell banks.
* Whether a Politically Exposed Person (PEP) has an interest or management role in the respondent: The correspondent should identify and assess the potential risks associated with any PEPs who have an ownership or management interest in the respondent, or who are customers of the respondent. The correspondent should apply enhanced scrutiny and monitoring to such relationships, and obtain senior management approval before establishing or continuing them.
Wolfsberg Correspondent Banking Principles 2022 by the Wolfsberg Group, October 2022.
Reference:http://www.fatf-gafi.org/media/fatf/documents/reports/RBA%20Guidance%20for%20Real%
20Estate%20Agents.pdf(page
20, second paragraph)