According to the Basel Committee on Banking Supervision principles, the most important question the banker should ask when opening a numbered or alternate name account is who will control the account. This is because such accounts pose a higher risk of money laundering and terrorist financing, as they can be used to conceal the identity and beneficial ownership of the funds. Therefore, the banker should perform enhanceddue diligence and verify the identity and source of funds of the person who has the authority to operate the account, as well as the purpose and nature of the business relationship12 The other questions are less relevant or secondary to the issue of control. The inheritance of the proceeds in the event of the businessman's death is a matter of succession law and does not affect the identification of the beneficial owner. The amount of money deposited into the account may indicate the level of risk, but does not reveal the origin or destination of the funds. The account-opening date is a procedural detail thatdoes not affect the compliance with the anti-money laundering and counter-terrorist financing standards12
1: Basel Committee on Banking Supervision - Core principles for effective banking supervision, 2012, Principle 14 and Essential Criterion 14.1
2: Basel Committee on Banking Supervision - Sound management of risks related to money laundering and financing of terrorism, 2014, Paragraphs 30 and 31

Real estate transactions are vulnerable to ML/TF risks, particularly when there is limited transparency or unusual payment methods:
* Cross-border purchases (A):"Purchases by foreign buyers, especially from high-risk jurisdictions, are a red flag for money laundering in the real estate sector."(CAMS 6th Edition, Real Estate Money Laundering Risks; FATF, Money Laundering and Terrorist Financing through the Real Estate Sector, 2007)
* Non-financed purchases (D):"Non-financed (all-cash) purchases can indicate the introduction of illicit funds into the financial system, bypassing the controls of mortgage lenders."(CAMS 6th Edition, Real Estate ML/TF Risks) Incorrect Options:
* B: Purchasing in the name of a natural person is standard and not inherently risky.
* C: Paying the true market price does not raise ML/TF risk.
References:
CAMS 6th Edition, Chapter: ML/TF Risks in Real Estate
FATF, Money Laundering and Terrorist Financing through the Real Estate Sector (2007)

According to the CAMS Study Guide, the most commonly used risk criteria for assessing the money laundering and terrorist financing risks are country risk, customer risk, and product and service risk. These criteria are based on the FATF Recommendations and the Basel Committee's guidance on sound management of risks related to money laundering and financing of terrorism.
Country risk refers to the level of exposure to potential money laundering and terrorist financing activities in a specific jurisdiction, based on factors such as the quality of its AML/CFT regime, its level of corruption, its political and economic stability, its involvement in illicit activities, and its cooperation with international bodies.
Customer risk refers to the level of exposure to potential money laundering and terrorist financing activities associated with a specific customer or customer segment, based on factors such as the nature and purpose of the business relationship, the source and destination of funds, the type and volume of transactions, the customer's profile and behavior, and the customer's geographic location.
Product and service risk refers to the level of exposure to potential money laundering and terrorist financing activities associated with a specific product or service offered by a financial institution, based on factors such as the complexity, transparency, anonymity, and accessibility of the product or service, the delivery channels and payment methods used, and the degree of oversight and monitoring applied.
Reputation risk is not a risk criterion for assessing the money laundering and terrorist financing risks, but rather a potential consequence of failing to manage those risks effectively. Reputation risk refers to the potential damage to the public trust and confidence in a financial institution due to its involvement or association with money laundering and terrorist financing activities, whether directly or indirectly.
CAMS Study Guide, 6th Edition, Chapter 2: Risk Assessments, pp. 41-461
FATF Recommendations, Recommendation 1: Assessing Risks and Applying a Risk-Based Approach2 Basel Committee on Banking Supervision, Sound management of risks related to money laundering and financing of terrorism, June 2017, pp. 9-143

According to the Anti-Money Laundering Specialist (the 6th edition) resources, the institution should develop a system to monitor all the activity of the customer's accounts to mitigate the risk associated with these accounts. This is because the customer's behavior and profile may indicate some red flags of money laundering, such as:
Operating an import-export business, which is a common sector for trade-based money laundering, where trade transactions are used to disguise the movement of illicit funds, either by over- or under-invoicing, misrepresenting the quantity or quality of goods, or falsifying documents1.
Receiving funds from a jurisdiction perceived as highly corrupt, which may increase the risk of the funds being derived from bribery, embezzlement, fraud, or other predicate offences2. Transparency International is a global civil society organization that publishes an annual CorruptionPerceptions Index, which ranks countries by their perceived levels of public sector corruption based on expert assessments and surveys3.
Making frequent transfers among the accounts, which may indicate a layering technique, where funds are moved through multiple accounts, institutions, or jurisdictions to obscure the audit trail and the source and ownership of the funds4.
Preferring to manage the accounts separately, which may indicate a lack of transparency or an attempt to avoid detection or reporting by the institution.
By developing a system to monitor all the activity of the customer's accounts, the institution can:
Identify and verify the identity and beneficial ownership of the customer and the parties involved in the transactions.
Obtain and verify information on the nature and purpose of the business relationship and the source and destination of the funds.
Conduct a risk assessment of the customer and the transactions based on the customer's profile, behavior, and geographic locations.
Apply enhanced due diligence and ongoing monitoring measures for higher-risk customers and transactions, such as obtaining additional information, documentation, or approval, or conducting more frequent or in- depth reviews.
Detect and report any suspicious or unusual transactions or activities to the relevant authorities.
The other three options are incorrect because:
File a suspicious transaction report is not the best answer, as it is a reactive measure that should be taken after the institution has identified or suspected money laundering or terrorist financing activity, not before. The institution should first conduct due diligence and monitoring of the customer and the transactions, and then file a report if there are reasonable grounds to believe that the activity is suspicious or unusual.
Diminish the importance of the subjective Transparency International rating is not the best answer, as it is a complacent and irresponsible attitude that may expose the institution to legal, regulatory, reputational, or operational risks. The Transparency International rating is not subjective, but based on credible sources and methodologies, and it is widely used as a reference by governments, businesses, civil society, and the public to assess the level of corruption in different countries3. The institution should not ignore or downplay the rating, but rather use it as one of the factors to evaluate the risk of the customer and the transactions.
Conduct a trade-price manipulation analysis is not the best answer, as it is a specific and technical measure that may not be sufficient or appropriate to mitigate the risk associated with these accounts. A trade-price manipulation analysis is a method of detecting trade-based money laundering by comparing the prices of goods or services in a transaction with the market prices or other benchmarks, and identifying any significant discrepancies or anomalies. However, this measure may not be feasible or effective if the institution does not have access to reliable and comparable data, or if the goods or services are not standardized or homogeneous.
Moreover, this measure may not address other aspects of the risk, such as the identity, ownership, or behavior of the customer and the parties involved in the transactions.
1: ACAMS, CAMS Study Guide, 6th Edition, Chapter 5, p. 108 2: ACAMS, CAMS Study Guide, 6th Edition, Chapter 5, p. 107 3: Transparency International, Corruption Perceptions Index, 3 4: ACAMS, CAMS Study Guide, 6th Edition, Chapter 5, p. 106 : ACAMS, CAMS Study Guide, 6th Edition, Chapter 5, p. 103 :
ACAMS, CAMS Study Guide, 6th Edition, Chapter 5, p. 103 : ACAMS, CAMS Study Guide, 6th Edition, Chapter 5, p. 104 : ACAMS, CAMS Study Guide, 6th Edition, Chapter 5, p. 105 : ACAMS, CAMS Study Guide, 6th Edition, Chapter 5, p. 105 : ACAMS, CAMS Study Guide, 6th Edition, Chapter 5, p. 109

Financial institutions must conduct thorough background checks on employees in sensitive roles (e.g., private banking) to mitigate fraud, insider trading, and money laundering risks.
Option A (Correct):Past employment records help verify work history and identify any red flags related to prior financial misconduct.
Option D (Correct):Internet and media searches reveal any negative press, regulatory issues, or connections to illicit activity.
Option E (Correct):Criminal history searches help screen for prior convictions related to financial crimes.
Why Other Options Are Incorrect:
Option B (Incorrect):Personal references are less reliable and may not uncover objective risk factors.
Option C (Incorrect):A resume is self-reported and should be verified using independent sources.
Best Practices for Employee Background Screening:
Conduct enhanced due diligence for high-risk roles (e.g., private bankers, compliance officers).
Use reliable background screening tools and legal databases.
Verify employment history and check against regulatory blacklists.
Reference:
FATF Recommendation 18 (Internal Controls & Employee Screening)
Wolfsberg Group Guidance on AML Employee Background Checks
6th EU AML Directive (6AMLD) on Employee Due Diligence