engleski

Vulnerability of Risk Based Approach in a Scope of Anti-Money Laundering System

The risk-based approach is a main pillar of effective anti-money laundering and terrorist financing system. It implies identification, assessing, and understanding the money laundering and terrorist financing risks, based on obliged entities’ own “risk appetite”. However, under a high risk circumstances, financial institutions can terminating or restricting business relationships with clients or categories of clients to avoid, rather than manage, established risk. Except of a broader range of financial consequences, that process can result in serious humanitarian, economic, political, and security repercussion. Considering “de-risking”, customers may shift to less regulated or unregulated channels, thereby potentially increasing national and global financial integrity risks as well as other risks of financial exclusion. On the other hand, there are 2.5 billion adults worldwide who are still part of an informal, unregulated and unmonitored system, potentially subjects of application a simplified customer due diligence requirements in a scope of the formal, transparent, protected and monitored financial system. Despite the fact that they are low risk type of customers with the same type of transactions, financial inclusion is an important aspect of the fight to counter money laundering and terrorist financing as well as one of many important consideration in a scope of a national risk assessments.

money laundering, risk assessment, financial inclusion, de-risking, due diligence

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