Business-Wide AML/CTF risk assessment.

▶ A #businesswide Anti-Money Laundering (AML) #riskassessment is a comprehensive evaluation conducted by any Financial Institution or #obligedentity, to identify, assess, and mitigate the risks associated with money laundering & terrorist financing, #Sanctions and Embargoes across all its operations. It’s a very essential tool for the Compliance Function (e.g. adjusting/parameterize the automated monitoring tool according to the identified risks), but is also more essential for the #seniormanagement or #BoD to comprehensively understand the AML/CTF and Sanctions risks the Organization is exposed to or highlight potential areas of vulnerability and instigate mitigate measures. Here's a breakdown of the key steps involved:

1️⃣ Understanding Regulatory Requirements: Begin by familiarizing yourself with the #AMLlaws and regulations applicable to your industry and jurisdiction.

2️⃣ A holistic Risk Definition: ❗ Define the risks, including all business activities, products, services, customer types, geographic locations, and delivery channels.

3️⃣ Risk Identification: Identify potential money laundering and terrorist financing risks associated with your business activities. This may involve examining customer profiles, transaction volumes, geographical locations, distribution channels, and product or service offerings.

4️⃣ Inherent Risk Assessment: Evaluate the identified ▶ #inherent risks based on their ❗ likelihood and ❗ potential impact. This step involves assigning risk ratings to different risk factors, such as customer types, products/services, and geographic locations.

5️⃣ AML Controls Evaluation ( ▶ residual risk): Assess the effectiveness of existing AML controls and procedures in place to mitigate identified risks. Determine whether controls are adequate, properly implemented, and aligned with regulatory requirements.

6️⃣ Risk Mitigation Strategies ( ▶ controls to be put in place): Develop and implement #riskmitigation strategies to address identified gaps and weaknesses. This may include enhancing/amendment customer due diligence policies & procedures, adjusting the transaction monitoring systems, conducting staff training, and enhancing suspicious activity reporting mechanisms.

7️⃣ Documentation: Document the findings (before and after controls) of the risk assessment process, including risk ratings, mitigation strategies, and any remedial actions taken.