Customer Due Diligence (CDD) Course Overview
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Questions and Answers

What is the main focus of Customer Due Diligence (CDD)?

  • Providing risk ratings for products and services
  • Identifying and verifying the customer (correct)
  • Performing Transaction Monitoring
  • Conducting investigations on competitors

    • Which institutions are subject to the Act on the prevention of money laundering and financing of terrorism?

  • Casinos and insurance companies
  • Banks and law firms (correct)
  • Technology companies and restaurants
  • Retail stores and educational institutions

    • What is the purpose of conducting a CDD investigation?

  • To provide discounts on products and services
  • To identify and verify customers for risk assessment (correct)
  • To promote money laundering activities
  • To enhance competition among financial institutions

    • What differentiates Customer Due Diligence (CDD) from Transaction Monitoring?

    <p>CDD aims to identify and verify customers, while Transaction Monitoring tracks financial transactions</p> Signup and view all the answers

    What type of organizations are required to comply with the Act on the prevention of money laundering and financing of terrorism?

    <p>Financial institutions and some companies</p> Signup and view all the answers

    How does Customer Due Diligence (CDD) help organizations understand their risks?

    <p>By providing a risk rating for all customers and taking necessary actions</p> Signup and view all the answers

    What is the primary goal of a Customer Due Diligence analyst according to the text?

    <p>To prevent money laundering and financing of terrorism</p> Signup and view all the answers

    What are the four different work streams in Customer Due Diligence for researching a customer?

    <p>Onboarding, Event Driven Review, Periodic Review, and Exit</p> Signup and view all the answers

    What triggers an Event Driven Review according to the text?

    <p>Unusual transactions</p> Signup and view all the answers

    What is the purpose of Periodic Review in Customer Due Diligence?

    <p>To re-investigate clients in a frequent period based on risk rating</p> Signup and view all the answers

    What happens in the process of Customer Exit in Customer Due Diligence?

    <p>Processes are put in place to end relationships with high-risk clients</p> Signup and view all the answers

    Which type of due diligence would likely be conducted for a local computer store operating only in the Netherlands?

    <p>Simplified Due Diligence</p> Signup and view all the answers

    What is the primary purpose of an Enhanced Due Diligence investigation?

    <p>To fully understand the risks posed by the client to manage them adequately</p> Signup and view all the answers

    Which type of due diligence would likely be conducted for a municipality or province in the Netherlands?

    <p>Simplified Due Diligence</p> Signup and view all the answers

    What is the main difference between a Standard Due Diligence and an Enhanced Due Diligence investigation?

    <p>An Enhanced Due Diligence is more extensive and involves additional measures to understand the customer and identify the origin and destination of money flows</p> Signup and view all the answers

    Which type of business would likely require an Enhanced Due Diligence investigation?

    <p>An oil storage and transport company operating throughout Europe and parts of North Africa and Asia</p> Signup and view all the answers

    What is the primary goal of a simplified investigation?

    <p>To minimize costs and administrative burdens</p> Signup and view all the answers

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