What is an AML / CFT risk assessment?

Undertaking an AML / CFT risk assessment means assessing the risk of money laundering/financing terrorism (ML/FT), you as a reporting entity, may reasonably expect to face in the course of your business. Any risk assessment must:

  1. Be set out in writing
  2. Identify the ML/FT risks your business reasonably expects to face, having regard to
    • The nature, size, and complexity of your business.
    • The products and services your business offers.
    • The way your business delivers products and services.
    • The types of customers your business deals with.
    • The countries your business deals with.
    • The institutions your business deals with.
    • Any applicable guidance material produced by AML / CFT supervisors relating to risk assessments.
    • Any other factors that may be provided for in regulations.
  3. Enable you to determine the level of risk involved in relation to obligations under AML / CFT Act.
  4. Enable you to prepare an AML / CFT programme to manage and mitigate the identified risks (applying the risk assessment).
  5. Include a description of how you will keep it up-to-date (review of risk assessment).
  6. Be audited (audit of risk assessment).

How do I undertake a risk assessment?

Completing a risk assessment is not a simple five minute task. It is a legal requirement and hence needs to be done thoroughly, accurately and then documented. Your AML / CFT auditor may ask to see the supporting documentation relating to how you went about conducting your assessment and how you derived the ultimate risk rating.

Strategi Institute has developed a training module and a comprehensive AML / CFT manual that will explain how to undertake a robust risk assessment, how to document it and how to write it up. This manual includes guidance notes, checklists, and appendices to explain what is risky and what is not, plus templates and example solutions. The manual will do more than just assist with your risk assessment – it will provide you with a total solution to enable you to meet all aspects of your AML / CFT obligations.