Financial institutions (FIs) perform AML risk assessments to ensure:

AML risk assessments are a key component of the risk-based approach to AML compliance, as required by the MLR 20171 and the FATF Recommendations2. AML risk assessments help FIs to identify, assess, and mitigate the money laundering and terrorist financing risks they face, taking into account their specific products, services, customers, and geographic locations. AML risk assessments also help FIs to allocate their resources and implement their AML policies and procedures in a proportionate and effective manner. AML risk assessments are not meant to be a one-off exercise, but rather an ongoing process that should be updated regularly to reflect changes in the FI’s risk profile and the external environment.

1: The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017

2: The FATF Recommendations - International Standards on Combating Money Laundering and the Financing of Terrorism & Proliferation