Either if you have addressed the risk of money laundering or not this information will help you to do it or improve it. First you’ve to understand that money laundering is no longer only done in the financial sector; it has expanded to other sectors such as trade based, football, art, etc. Although many countries have already added those sectors in their laws, it’s better if you manage money laundering risk because there is no sector immune to it.
Second, learn that a risk is the likelihood that something could happen or not. In this case the risk is that your company could be used to launder money.
Therefore you should ask yourself:
a) What type of customer is? Is it a company or an individual?
b) What does the customer do for living? Is it one of the vulnerable sectors?*
c) In which country the customer lives or is based (if it is a company) and where does business? Keep in mind these risk-increasing warnings: countries with no anti-money laundering regulation or too lax, highly corrupt, sanctioned, or known to be part of terrorism or that propitiate weapons of mass destruction, etc.
d) Which products or services the customer will use from your company? Do they make sense according to what the customer does for living?
e) If it is a company, do you know who the real owner is?
f) How many transactions does the customer perform? When are they carried out? How much money is involved in each transaction?* Do you know the source of the funds?
To obtain the information and depending on your core business you could use questionnaires or formats that the customer fills in. The answers will help you to address the risk of money laundering that will continue in the next article.
*verify what your regulation indicates
By Mónica Ramírez Chimal, Partner of Asserto RSC, Mexico City