Money Laundering Risk Assessment ('MLRA')

By considering the nature and extent of money laundering risk to which a firm is, or could be exposed, risk can be assessed for likelihood of occurence and potential impact (e.g. regulatory enforcement). For significant risk, informed steps can be taken to allocate resources where they can be most efffective.

Eliminating inherent risk is not always possible. The extent to which acceptable levels of residual risk remain is a factor of senior management 'risk-appetite', influenced by an understandng of regulatory expectations, legal requirements and risk-assessment findings.

Factors to consider

MLRA planning considerations, include:

  1. Which operations in the firm's UK and international business, present the greater risk of exposure to money laundering or financial sanctions breaches?
  2. To what extent does risk vary across the different types of customer or beneficial owner, product, business line, geographical location and delivery channels (e.g. internet, telephone, branches)?
  3. Are arrangements for assessing and managing money laundering risk appropriate to the firm's operations?

MLRA outcomes

A properly scoped and successfully completed MLRA should provide senior management with an informed view on the following:

How we can help you

FCRM assists clients to identify risk in the operating environment. Our personnel utilise experience of conducting regulatory reviews (e.g. s166), knowledge of systems and controls issues, and previous Nominated Officer and MLRO experience, to help clients produce a comprehensive analysis of their money laundering risk.

We consider various sources during an MLRA assignment, including: (i) known incident and control weaknesss data; (ii) control-gap risk assessment; (iii) output of structured meetings/workshops; (iv) trend analysis; and (v) regulatory considerations (e.g. published papers, guidance and thematic reviews).

MLRA findings are documented and used by client senior management to inform risk-appetite priorities. MLRA output is also available to the client for use as the baseline for any subsequent review/refresh, as part of the firm's risk-based AML framework.

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