Which statement about Simplified CDD eligibility is true?

• A. It can be applied to a Politically Exposed Person.
• B. It cannot be applied to a Public Body.
• C. It cannot be applied to a Politically Exposed Person.
• D. It can be applied to a private individual with low risk.

Answer: (C)

Simplified CDD is a lighter verification approach used when a customer is assessed as low risk. Politically Exposed Persons carry a higher residual risk due to potential corruption and influence, so they require enhanced due diligence rather than the simplified approach. That’s why the statement that simplified CDD cannot be applied to a Politically Exposed Person is true. It reflects the standard risk-based rule: PEPs trigger enhanced scrutiny, not simplified procedures. The other options either depend on jurisdiction or describe situations where low‑risk individuals might indeed qualify for simplified CDD, but the clear, universal point is that PEPs require enhanced due diligence, not simplified.