Money service business risk assessment

This has resulted in many banks terminating banking services for money services businesses (MSBs). The level and types of risk posed by an MSB depend on the nature and scope of the MSB operation. MSBs range from large international money transmitters to small independent businesses that offer financial services only as a secondary component to their primary business – for example, a grocery store that offers check cashing. The method used should be based upon the company’s risk profile and should be easy to understand. It is recommended that the risk assessment contain the following four risk categories: These four risk categories can then be given risk ratings.

It is important to consider all areas of the company when creating a risk assessment.

As a first line of defense for financial crimes, MSBs play an important role in minimizing frau money laundering, terrorist financing, and other financial crimes. Hawala and other similar service providers. Interpretive Note to Recommendation.

Introduction: money laundering and money service businesses 2. Responsibilities of senior managers 3. Customer due diligence 5. Reporting suspicious activity 7. Each money services business should identify and assess the money laundering risks that may be associated with its unique products, services, customers, and geographic locations.

Regardless of where risks arise, money services businesses must take reasonable steps to manage them. Businesses need to understand the requirements and. To help you with the evaluation of your business risk assessment , you can use a likelihood and impact matrix tool similar to the one presented in Annex C. Once your business -based risk assessment is completed you can focus on the last element of your risk assessment : your clients.

Relationships-based risk assessment. For some money services businesses, based on their risk assessments, an annual review may. Types of risk vary from business to business , but conducting a risk assessment and preparing a risk management plan involve a process that is common to all business. It goes without saying that the first step to take when conducting a risk assessment is to identify potential risks to your business. This list has been compiled through the cooperative association with various professionals in the banking industry as a working guideline only.

We suggest that your compliance efforts be guided by a lawyer or other specialized professionals. Performing your firm-wide risk assessment You can design your own firm-wide risk assessment and MLRacknowledges that you can take into account the size and nature of the business. The risk assessment for a small practice, providing a limited range of services to a small number of clients, may be quite succinct. Performing a risk assessment for your financial institution Examiners want to know that your financial institution is aware of the risks that are present and is managing them adequately.

This quick reference guide walks you through three steps to perform a risk assessment for your FI, and includes examples and best practices. Is this business registered? List the State and Country that the business is registered in.

If yes, request a copy of the MSB registration.

State: _____Country: _____ RISK ASSESSMENT Section 1. This guide gives an overview of the risk -based approach and helps you to carry out a risk assessment of your business. It also outlines your day-to-day responsibilities under the Money Laundering. Contact us for more information on how we can provide financial consulting services for your organization. These services can include: purchasing money orders, cashing payroll or personal checks, sending payments electronically, selling stored value or gift cards. A baseline risk assessment is a requirement for multiple compliance systems across industries.

With a SecureTrust risk assessment , you can meet compliance obligations and gain an understanding of your exposure to threats and vulnerabilities, through risk identification and risk mitigation prioritization for your key assets and systems, policies, procedures and controls across business units. Geographic Locations - Country of Residence 4. There are four main elements you need to think about in working out money laundering or terrorism financing risk. Transaction volume 8. Risk Rating Calculation Models.