Inconsistent or changing explanations from a client when asked for supplementary information about their wealth can indicate potential misrepresentation or concealment, making it a key red flag during source of wealth verification.

A holding company is established to own and control shares or assets of other companies, often for organizational, tax, or asset protection purposes, without engaging directly in the day-to-day operations of those businesses.

Ongoing CDD should follow a risk-based approach, meaning higher-risk customers are reviewed more frequently, while lower-risk customers are reviewed at longer intervals, optimizing resources and maintaining compliance.