What steps would you take to onboard a high-risk client requiring enhanced due diligence?

• A. Implement risk-based CDD, collect required documentation, assess risk, set monitoring, and ensure compliance with clear client restrictions
• B. Collect passport and proceed
• C. Do nothing
• D. Wait for more information

Answer: (A)

When a client is high risk, you must use a structured, risk-based approach to know-your-customer and anti-money-laundering safeguards. The best path starts with enhanced due diligence: apply a risk-based CDD framework that escalates the level of scrutiny for higher-risk profiles. Gather all required documentation to verify identity, address, beneficial ownership, and the source of funds. Conduct a thorough risk assessment that weighs factors like country risk, the nature of the business, and the proposed product and channel. Establish ongoing monitoring from day one, with clear triggers for additional reviews, and put in place appropriate controls or restrictions to manage residual risk. This combination ensures compliance, transparency, and ongoing oversight rather than rushing onboarding or leaving gaps. Collecting only a passport omits critical checks, doing nothing would violate obligations, and waiting for more information delays and increases risk.