Business and Customer Risk Assessment

What is a Business Risk Assessment (BRA)?

A BRA is an annual assessment conducted by the MLRO to identify and assess money laundering risks to which its business is exposed, taking into consideration the nature, size and complexity of its activities.

The BRA must take into account any vulnerabilities relating to:

1. Its type of customers and their activities;
2. The countries or geographic areas in which it does business;
3. Its products, services and activity profiles;
4. Its distribution channels and business partners;
5. The complexity and volume of its Transactions;
6. The development of new products and business practices including new delivery mechanisms, channels and partners
7. The use of new or developing technologies for both new and pre-existing products and services.

Summary:

The outcome of the BRA must be presented to Senior Management of the firm. In addition, the outcome of the BRA must be reflected in the AML policies and procedures of the firm, if applicable.

What is a Customer Risk Assessment (CRA)?

The CRA is the risk-based assessment that must be undertaken by an licensed Financial Institution or a designated non-financial Business Provider DNFBP on a customer and the proposed business relationship, transaction or product. The results of the CRA determines the level of customer risk ratings, associated due diligence levels and frequency of reviews that must be undertaken in relation to that customer.