What is customer AML/CFT risk assessment?
Customer risk assessment is the process of identifying and documenting the ML/TF risk profile of a customer before establishing or maintaining a business relationship. It supports the TCSP’s risk-based approach to CDD, EDD and ongoing monitoring.
What factors may be considered?
- Customer background and origin.
- Nature of the customer’s business.
- Ultimate beneficial ownership and control structure.
- Purpose, amount or frequency of transactions.
- Source of funds and source of wealth indicators.
- Customer location, delivery channel and account activity risk.
What does the form help record?
The form may record low, normal or high risk rating; whether the business relationship should be established, maintained, declined or terminated; and whether senior management approval is required for higher-risk engagements.
How this relates to the review
If the independent review identifies weak or inconsistent risk assessment records, the Risk Assessment Form can be provided as an add-on to help the client implement a more consistent documentation process.