©kaizen compliance solutions ltd understanding politically exposed persons (peps) risk test &...

©Kaizen Compliance Solutions Ltd

Understanding Politically Exposed Persons (PEPs) Risk

Test & Validation Session

Name:……………………………………...

Date:…………………..............……….

PLEASE NOTE

Instructions for answering the PEP Risk Assessment:

The use of mobile phones or any other electronic devices is STRICTLY FORBIDDEN.

Please read the requirements of the questions carefully and only select the number of responses specified in the question

To answer the question, tick or circle the answer(s) that applies

All questions in this multiple choice assessment are MANDATORY.

Answer ALL questions

©Kaizen Compliance Solutions Ltd - 2015-2Test & Validation Session

Question 1Where can you find the universally accepted definition of a PEP?a. Under the JMLSG 2009, part 1. b. Under recommendations 12-20 FATF.c. Under the AMLR 2007.d. There is no universally accepted definition of a PEP. Question 2What risks do PEPs pose to an organisation?e. Reputational riskf. Loss of business interestsg. Potential Financial Finesh. All of the above Question 3Which one of these individuals is a PEP ?i. A mid ranking public servant in the Cambodian ministry of health. j. The son of the late Libyan dictator, Saif al-Islam Gaddafi.k. Mohammad Al-Fayedl. None of the above Question 4Is Richard Branson a PEP?m. Yes, he fits the key characteristics.n. No, none of the key characteristics apply to him.o. He is a high net worth individual, but not a PEP. p. Yes, because of his association with people in positions of power.

Question 5What type of Due Diligence would you apply to a PEP client: q. ODD - Ordinary Due Diligence r. SDD - Simplified Due Diligence s. EDD - Enhanced Due Diligencet. All of the above.

©Kaizen Compliance Solutions Ltd - 2015Test & Validation Session - 3

Question 6Best practice standards for file review suggests: a. A file should be reviewed every one, three, and five years.b. A file should be reviewed every two, four and seven years.c. A file should be reviewed every four, six and eight years. d. None of the above. Question 7What (or who) is a sleeper PEP?e. An individual that has been exposed to a lot of political activity.f. A high risk individual operating behind the scene.g. An individual that has the potential to become a PEP in the future.h. The President of the Russian Federation. Question 8According to Best Practice how long is an individual considered to be a PEP? Select one or more correct answer.i. Once an individual has been deemed a PEP they will always have that

status.j. 5 years after that individual has seized to satisfy the definition of a PEP. k. 2 years after an individual has seized to satisfy the definition of a PEP?l. 1 Year after the individual’s death Question 9What do we mean when we talk about Risk Based Approach?m. Taking into account the level of risk associated with a client’s jurisdiction

of origin.n. Taking into account the level of risk associated with the line of business

of a client.o. The effectiveness of the legal and regulatory framework of a client’s

jurisdiction.p. All of the above.


Question 10What does SoW stand for?a. Source of Waterb. Source of Weaponsc. Source of Wealthd. Source of War

Question 11Is there a difference between Source of Wealth and Source of Funds?e. Yes, Source of Funds determines the exact origin of the funds in

question. Source of Wealth determines how the individual accumulated his/her current wealth over a period of time.

f. No, they both treat the same issue, and achieve the same result.g. The difference depends on the client’s line of business.h. There is no difference, both terms are used to describe the same

activity, determining the origin of a client’s wealth.

Question 12What principles can be used to manage PEP Risk Exposure?i. Applying a Risk Based Approachj. Conducting Enhanced Due Diligencek. Adopting best practice requirements for file re-viewl. All of the above.

Question 13How important is it to determine the UBO (Ultimate Beneficial Owner) when dealing with a PEP file?m. Very important as PEP accounts are classified as High Risk in terms of

Money Laundering and possible Terrorist Financing. n. It is important but not crucial, as it is not easy to contact PEP clients. o. It is not important as PEP clients are usually people in high positions and

they are considered to be trustworthy. p. Establishing the UBO isn’t common practice when it comes to PEP

clients.


Question 14What do we mean by ‘’PEP by association’’? Choose all correct answers.a. Any individual that is associated in any way with a PEP.b. A member of the PEP’s immediate family.c. A business associate that has a shared vested interest with the PEP.d. The PEP’s gardener

Question 15Which one of the below listed individuals is a high risk PEP?a) Her Majesty Queen Elisabeth.b) Kate Middletonc) Boris Johnsond) None of the above

Question 16

Question 17

Question 18

Question 19

Question 20

END OF THE TEST


ANSWERS

1.d2.d3.d4.c5.c6.a7.c8.a9.d10.c11.a12.d13.a14.b15.d16.…17.…18.…19.…20.….


©kaizen compliance solutions ltd understanding politically exposed persons (peps) risk test &...

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