ABC Bank plc can apply Simplified Customer Due Diligence to which customer?

• A. ACE Enterprises Ltd, which is listed on the main market of the Irish Stock Exchange.
• B. Mary, who has less than €100,000 to invest.
• C. New Oil Co. Ltd, a small unlisted oil exploration company.
• D. Brown & Co, a small two-person legal practice.

Answer: (B)

Simplified due diligence is used when the risk of money laundering or terrorist financing is considered low, so a bank can apply lighter verification steps to the customer and their funds. In practice, small, straightforward retail relationships with relatively small transaction sizes fall into this category.

Mary fits this profile: she plans to invest less than €100,000. That small amount, in a straightforward retail context, typically presents a low ML/TF risk, so the bank can apply simplified measures rather than full, rigorous checks.

The other options involve higher risk or more complex relationships. A listed company, while transparent, is a corporate client with potential for more intricate ownership and transactions. A small unlisted oil exploration company introduces sector-specific risks and less public information. A small two-person legal practice could involve professional services risk and potential for complex funds flows. These scenarios usually require standard or enhanced due diligence, not simplified.

So the best match for simplified CDD is the retail investor with a relatively small investment.