28: Risk Based Approach

Question 1

Recall 3 high risk factors

Answer 1

1. Geographical area of high risk
2. Management structure is unusually complex given the nature of the business
3. The business relationship is concluded in unusual circumstances
4. The business is cash intensive

Question 2

What is the role of the Risk Based Approach? (2)

Answer 2

1. To analyse the MLTF risks to the business and form proportionate responses
2. To satisfy the FATF, EU directive and EU MLTF.

Question 3

What are 3 low risk factors?

Answer 3

1. Company is listed in a regulated market
2. Company is publically owned
3. Geographical area of low risk

Question 4

If a client has a high risk profile, what are some procedure you can carry out to ensure protection? (3)

Answer 4

1. Enhanced CDD
2. Periodic CDD
3. Additional controls