AML Business Risk Assessment

AML Business Risk Assessment

Designated Non-Financial Businesses and Professions (DNFBPS) and Financial Institutions (FIs) in UAE are required to carry out Anti-Money Laundering (AML) Business Risk Assessment (BRA). Business Risk Assessment also known as Enterprise Wide Risk Assessment (EWRA)/Entity Wide Risk Assessment/ Firm Wide Risk Assessment (FWRA)/ ML/TF Risk Assessment / Business Wide Risk Assessment / Enterprise Wide ML/TF Risk Assessment. EWRA is the pillar of the risk-based approach (RBA). The AML Policy, procedures, and controls have to be in line with the business risk assessment. Higher the risk, higher the controls is the primary requirement of a risk-based approach.

A Business Risk Assessment performed on the basis of reliable qualitative and quantitative data ensures DNFBPS and FIs that their AML risks are in line with their risk appetite.

AML Business Risk Assessment Methodology

We take into consideration the UAE National Risk Assessment (NRA) issued by the National Anti-Money Laundering and Combating Financing of Terrorism and Financing of Illegal Organizations Committee (NAMLCFTC), findings of FATF, MENAFAFTF, other FSRBs, the input of the AML Compliance Officer, and the nature and size of business to carry out the Business Risk Assessment.

We then go on to identify the risk factors and their likelihood and impact to choose areas to prioritize in terms of AML/CFT and the policies, controls, and procedures to apply to keep those risks in check.

AML Business Risk Assessment Process

The enterprise risk assessment is a regular process of identifying, analysing, and assessing controls’ effectiveness.

Risk Assessment. Risk Management. Compliant.

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AML Risk Assessment Steps

Identify risk Scenarios

Assess which money laundering and terrorism financing risks may occur and the form that they may take.

Analysis of Controls

Assess the control measures in place for each scenario.

Assess risk Appetite

Verify whether the risk is within the boundaries of the risk appetite.

Overview of the business

Make an overview of the business with respect to products, customers, countries, staff, third parties

Analysis of scenarios

For each risk scenario, determine the likelihood of the scenario occurring and resulting impact.

Determination Of Residual Risks

Determine the residual risk for each scenario by comparing inherent risk and the level of control.

Determine Additional Measures

Determine the type of action to be taken to increase control or reduce risk

Why is it important to conduct Enterprise Wide Risk Assessment (EWRA)

Top 6 reasons why FIs, DNFBPs, and VASPs have to carry out Entity Wide Risk Assessment

  1. EWRA helps understand the inherent AML/CFT risks (Gross Risk) and identify the effectiveness of controls in place.
  2.  EWRA helps identify Residual Risk (Net Risk), i.e. Gross Risk-Controls = Residual Risk
  3. EWRA helps identify additional controls to be placed to mitigate the Residual Risk
  4. EWRA forms the basis for reporting entity’s AML/CFT risk management framework
  5. EWRA helps entities apply Risk Based Approach (RBA) and allocate resources effectively and efficiently
  6. EWRA helps identify gaps in AML/CFT Policy, Procedures, and Controls

How can we help?

AML UAE helps companies carry out their business risk assessment and control the AML risks. It helps organizations identify inherent and residual risks related to products, services, customers, delivery channels, and geographies. The businesses can know their AML/CFT risk exposure and apply suitable policies and controls to mitigate such risks and keep them within the limits of their risk appetite.

We help companies

  • Design and implement compliance monitoring programs
  • Draft customized AML policies, procedures, and manuals in line with legal requirements and the nature and size of the business
  • Review AML policies, procedures, and manuals according to regulatory changes
  • Assess AML compliance impact of regulatory changes
  • Train internal staff on AML compliance requirements
  • Conduct AML compliance reviews
  • Select the right name screening software for AML compliance
  • Carry out Business Risk Assessment
  • Perform KYC and Customer Due Diligence
  • Setup in-house AML compliance department

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