* D: "Family members and close associates of PEPs are often used as intermediaries to launder the proceeds of corruption or conceal illicit assets."(CAMS 6th Edition, Enhanced Due Diligence for PEPs; FATF Guidance on PEPs) References:
CAMS 6th Edition, PEP Risk and EDD
FATF Guidance: PEPs

Alternative remittance, also known as underground banking or informal value transfer systems, is a method of transferring money or value without using formal financial institutions or channels. It is often used by migrant workers, refugees, or people who lack access to formal banking services. However, it can also be exploited by criminals and terrorists to move funds across borders without detection or regulation. The Wolfsberg Group, a group of leading international banks that promotes best practices in anti-money laundering and counter- terrorist financing, cited alternative remittance as one of the sectors and activities that are widely used for the financing of terrorism in its Statement on the Suppression of the Financing of Terrorism. The Wolfsberg Group recommended that financial institutions apply enhanced and appropriate due diligence to customers engaged in alternative remittance and report any suspicious transactions to the relevant authorities.
Wolfsberg Group (2002). Wolfsberg Statement on Anti-Terrorism Financing1 Pieth, M. (ed.) (2002). Financing Terrorism. Springer, Dordrecht2 ACAMS (2020). CAMS Certification Package (6th Edition)3

A risk-based approach is central to AML/CFT programs and includes:
* A: Creating detailed risk profiles for customers based on their behaviors and connections.
* C: Applying controls that are tailored to the actual risk (not a one-size-fits-all approach).
* D: Performing a thorough risk assessment, considering customer, transaction, and geographic factors.
"A risk-based approach involves risk profiling, tailored controls, and comprehensive risk assessment across key risk factors." (CAMS 6th Edition, Risk-Based Approach and Risk Assessment) Incorrect:
* B: Monitoring only flagged customers is not sufficient.
* E: Equal allocation of resources ignores differing risk levels.
References:
CAMS 6th Edition, AML Compliance Program
FATF Recommendation 1: Risk-Based Approach

The rules imposed by the Office of Foreign Assets Control (OFAC) for legal entities and persons related to the US are:
Nationals of the US must comply with OFAC rules, regardless of where they are located in the world. This means that US citizens, permanent residents, and entities organized under US law are subject to OFAC sanctions and prohibitions, even if they operate or reside outside the US12.
Any foreign corporation is also penalized if it conducts transactions with sanctioned countries under OFAC rules. This means that non-US entities that engage in trade or financial dealings with OFAC-designated countries, entities, or individuals are liable to face civil or criminal penalties, as well as secondary sanctions that could restrict their access to the US market or financial system34.
The other options are not correct, because:
A subsidiary of a legal entity of the US, which is formally registered in a foreign country, is not exempt from OFAC rules. This means that foreign-incorporated entities that are owned or controlled by US persons or entities are also subject to OFAC sanctions and prohibitions, unless they are specifically authorized or licensed by OFAC12.
A foreign individual visiting the US for a short vacation is not obligated to follow OFAC rules. This means that non-US persons who are temporarily present in the US are not subject to OFAC sanctions and prohibitions, unless they are involved in transactions that have a US nexus or violate other US laws.
The head office of a foreign legal entity which has a branch in the US does not need to comply with OFAC rules. This means that non-US entities that have a presence or operation in the US are not subject to OFAC sanctions and prohibitions, unless they are involved in transactions that have a US nexus or violate other US laws.
References:
ACAMS CAMS Certification Video Training Course - Exam-Labs3
Exam CAMS: Certified Anti-Money Laundering Specialist (the 6th edition)4 ACAMS Study Guide for the Certification Examination, 6th Edition, Chapter 7, page 147: https://www.acams.
org/wp-content/uploads/2019/08/ACAMS-Study-Guide-6th-Edition-Chapter-7.pdf ACAMS Study Guide for the Certification Examination, 6th Edition, Chapter 7, page 148: https://www.acams.
org/wp-content/uploads/2019/08/ACAMS-Study-Guide-6th-Edition-Chapter-7.pdf ACAMS Study Guide for the Certification Examination, 6th Edition, Chapter 7, page 149: https://www.acams.
org/wp-content/uploads/2019/08/ACAMS-Study-Guide-6th-Edition-Chapter-7.pdf

UN sanctions regimes are not punitive but aim to:
* B: "Support peaceful resolution of conflicts."
* D: "Deter non-democratic and unconstitutional changes of government."
* E: "Promote respect for human rights and humanitarian law."(CAMS 6th Edition, United Nations Sanctions; UN Security Council Mandates) Incorrect:
* A: The UN does not impose sanctions to force regime type.
* C: Sanctions are not for punishing weak AML controls.
References:
CAMS 6th Edition, UN Sanctions
UN Security Council, Sanctions Objectives