The risk-based approach underpins the MLR17 – firms should focus their resources on the services and clients that have the highest risk of money laundering. To determine how and where resources should be focused, firms must perform a risk assessment to understand the risk that the firm may be used to conceal or launder the proceeds of a crime.
How to perform a firm-wide risk assessment
- Identify the money laundering risks.
- Assess the likelihood and impacts of each risk.
- Review the mitigating checks, systems and controls you have in place.
Key risks to consider
The assessment should consider factors such as the customer base, the countries and geographies in which the firm operates, and the products and services offered (eg, clients’ money accounts or incomplete records engagements). Firms can then design their policies and procedures to respond to the level of risk identified. Whereas, in the past, we have found that firms hadn’t performed a firm-wide risk assessment, now we find that firms are performing one but that the assessment doesn’t cover all the risks faced by the firm, or fails to conclude on the level of risk.
Resources to support compliance
Read the report
Read our 2022/23 anti-money laundering supervision report for more detail on the results of our monitoring reviews.
Download
