General Risk Assessment
The documentation of the risk assessment should identify all potential threats, vulnerabilities, and risk factors your business may face. The analysis should provide an overview of the risks that exist for your company to be exploited for money laundering or terrorism financing. Each business is unique, and even if two companies are in the same industry, the risks may vary depending on services, types of customers, and personnel structure.
Procedures
The goal of your internal procedures is to clarify to the staff how they should work to prevent money laundering and terrorism financing. Procedures should be designed based on the general risk assessment and include guidelines for processes related to customer identification, monitoring of business relationships, reporting of suspicious activities, and employee training.
Customer Due Diligence (CDD)
Before initiating a new business relationship or conducting a single transaction that meets certain criteria, you must have sufficient knowledge (due diligence) about the customer. This means identifying the customer's business purpose, verifying the customer's identity, and determining if there is any ultimate beneficial owner or politically exposed person (PEP).
Risk Classification of the Customer
Based on the customer due diligence information, you should determine the risk level of the specific customer. This risk profile is created by conducting an overall assessment of the customer, the purpose of the business relationship, and other risk indicators. The risk can be classified on a scale, such as low, medium, high, to clearly indicate the risk level.
Continuous Monitoring
Ongoing business relationships or multiple related transactions require constant monitoring. The two key components of continuous monitoring are keeping customer due diligence updated and being attentive to any deviations in the customer's behavior. All abnormal patterns should be documented and reviewed for suspicion of illegal activity.
Reporting
If you discover signs that your own business could be exploited for money laundering, you are obligated to report this to the financial police.
Employee Training
Companies covered by the money laundering law need to ensure that employees undergo training, at least annually, regarding measures to prevent money laundering and terrorism financing.
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