ACAMS AML CCAS Question # 25 Topic 3 Discussion

FATF Recommendation 13 (Correspondent Banking and Similar Relationships) and its application to VASP–VASP relationships require enhanced due diligence before onboarding. This is because such arrangements carry elevated ML/TF risk, especially in cross-border settings.

Required CDD practices include:

Assess the nature and purpose of the VASP relationship (C):Understand why the relationship is being established and the expected services/products.

Obtain approval from senior management (D):Senior management oversight ensures risk is accepted at the appropriate governance level.

Assess the VASP’s supervision and if a license/registration is needed (E):Confirm regulatory oversight, licensing, and compliance with AML/CFT obligations.

Options A and B arenotcore FATF requirements for CDD in this context — local authority approval may be a domestic regulatory requirement in some countries, but not a FATF baseline, and profitability assessment is a business decision, not an AML measure.