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Crime

VIEWS: 16 PAGES: 16

  • pg 1
									                                       Component 1: National risk assessment using SIP Template 1

It is a tremendous challenge for authorities to identify areas and sectors that are susceptible to ML/TF risks. Traditionally, only the
financial sector was subject to AML/CFT laws and regulations, but now international standards require that designated non-financial
businesses and professions (DNFBPs) be included within the regulatory framework. In some jurisdictions, DNFBPs have yet to be
regulated or supervised. Risks and vulnerabilities may also arise from the nature of economy, legal and institutional framework, among
others.
Jurisdictions need a basis for prioritizing and allocating limited resources to ensure their actions are focused effectively and efficiently.
For the purpose of prioritization and more efficient allocation of resources, jurisdictions may consider conducting a national risk
assessment to identify the relevant areas to be focus at when implementing the required AML/CFT measures.

The objective of the national money laundering and terrorist financing risk assessment is to identify ML/TF risks/threats/vulnerabilities
across various areas and sectors using Template 1.

Template 1 contains some of the information that jurisdictions may collect in order to assess the jurisdiction’s ML/TF risks. However, the
Template 1 serves as a guide only and jurisdictions should consider obtaining other relevant information for a more comprehensive
national risk assessment.

Template 1 consists of the following sections (worksheets):
1. Prevailing Crime Type
2. Legal/Judicial/Institutional Framework
3. Economic and Geographical Environment
4. Reporting Institutions (Financial Institutions)
5. Reporting Institutions (DNFBPs)
                                                                      Risk/Vulnerability Analysis - Prevailing Crime Type
Objectives
The objective of this worksheet is to understand what type of predicate crime poses a ML/TF threat in your country and identify methods of ML/TF in your country.
Instruction


Areas

Twenty designated list of predicate crimes are listed in the first column. However, your jurisdiction should amend the list by adding other predicate crimes to money laundering if any.

Under the “other” section in the first column, it is important to analyze attractiveness of your country to money laundering. Are the proceeds of crime laundered domestically in your
country, or are they taken outside the country and laundered abroad? In addition, does your country attract foreign proceeds of crime? In other words, crimes are committed abroad
but criminals use your financial system (and DNFBPs) to launder proceeds of crime?

The last item in the first column is to discuss the methods of laundering. Are there well known common methods for laundering? Are there methods of laundering that pose particular
challenges? Are there new methods for laundering? This row is to provide information on notable feature of the methods of laundering.

Green italic words guides each country to consider "other" issues. Once other issues to be considered are identified, write them down. Red mark on the right hand top of the box
indicates some comments/clarification available.

Information

The first section under the information is Mutual Evaluation Report (MER). Extract information from the MER relating to source of proceeds of crime, threat, vulnerability and risk of
ML/TF. Then provide information on three indicators: number of ML/TF cases investigated which involved particular predicate crime; amount of proceeds generated from the
particular predicate crime; and number of suspicious transaction reports (STRs) reported to the FIU relating to particular predicate crime.

These statistics can be provided only if the information is available. In some countries, you may find it difficult to present these statistics. If these statistics are not currently collected,
your country may consider start collecting them.

Finally any other information regarding crimes and money laundering can be provided in the “other information” section. For example, such information may come from crime studies
published by researchers or LEAs.


ML/TF Threat

Based on the information you gathered, please rate the level of threat each type of predicate crime poses in terms of ML/TF. The judgment of “high” “medium” and “low” must be
exercised based on the knowledge and expertise you have in your country.

Other Issues

Outcome of this threat analysis will be useful for LEAs to prioritize their actions. It is also useful for FIU and covered institutions to understand type of crimes that generate proceeds
and methods for laundering.

Note

Each cell can be expanded as you type the information.
                                                                                                                                                                                                             Template 3




Risk/Vulnerability Analysis - Prevailing Crime Type
Areas*                                                                                                           Information                                               ML/TF Threat          Recommendations
                                                                                                                                                                                                that may be impacted


                                 Mutual Evaluation Report (reference to souce of prceeds of crime,   Number of   Amount of     Number of STRs   Other Information   High     Medium       Low
                                              threat, vulnerability and risk of ML/TF)               cases       proceeds      reported
                                                                                                                 generated

Predicate Crime

Organised crime                                                                                                                                                                                 R1



Terrorism                                                                                                                                                                                       R1



Human trafficking                                                                                                                                                                               R1



Sexual exploitation                                                                                                                                                                             R1



Drug trafficking                                                                                                                                                                                R1



Arms trafficking                                                                                                                                                                                R1



Trafficking in stolen goods                                                                                                                                                                     R1



Corruption/bribery                                                                                                                                                                              R1



Fraud                                                                                                                                                                                           R1



Counterfeiting of currency                                                                                                                                                                      R1



Counterfeiting and piracy of                                                                                                                                                                    R1
products


Environmental crime                                                                                                                                                                             R1



Murder, grievous bodily injury                                                                                                                                                                  R1



Kidnapping, illegal restraint,                                                                                                                                                                  R1
hostage-taking


Robbery/theft                                                                                                                                                                                   R1



Smuggling                                                                                                                                                                                       R1
                                                                                                                                                                                                                     Template 3




Areas*                                                                                                                   Information                                               ML/TF Threat          Recommendations
                                                                                                                                                                                                        that may be impacted


                                         Mutual Evaluation Report (reference to souce of prceeds of crime,   Number of   Amount of     Number of STRs   Other Information   High     Medium       Low
                                                      threat, vulnerability and risk of ML/TF)               cases       proceeds      reported
                                                                                                                         generated

Extortion                                                                                                                                                                                               R1



Forgery                                                                                                                                                                                                 R1



Piracy                                                                                                                                                                                                  R1



Insider trading and market                                                                                                                                                                              R1
manipulation


Write down other proceeds                                                                                                                                                                               R1
generating significant criminal
activities in your country (for
example, tax evasion)
                                                                                                                                                                                                        R1



Others



Attractiveness of the country for                                                                                                                                                                       R1/R2
laundering - laundering of domestic
proceeds at home


Attractiveness of the country for
laundering - laundering of domestic
proceeds abroad (therefore, not
attractive for laundering)

Attractiveness of the country for
laundering - laundering of foreign
proceeds - amount generated
abroad and laundered domestically

Methods of laundering

Trade-based ML                                                                                                                                                                                          Implememtatopm


Write down other prevalent
methods of ML/TF in your country




* Any other relevant areas identified to be included
                                                         Risk/Vulnerability Analysis - Economic and Geographical Environment
Objectives
The objective of this worksheet is to analyze economic and geographical environment in which your country operate and how they raise attractiveness of your country to
ML/TF.

Instruction


Areas

Under the areas, there are two categories: economic environment and geographical environment. Under the economic environment, some indicators are identified: indicators relating
to size of banked population, size of informal sector, type of payment, circulation of hard currencies, and large international financial transaction. For the large international financial
transaction, please indicate the benchmark amount. In some countries, such is indicated by the threshold for currency transaction reporting. If your country does not have a currency
transaction reporting, you may use USD 15,000 equivalent as a benchmark threshold.

In addition, the issue relating to NPO sector is also added. NPO sector relates to SR VIII and thus it is important to understand whether any specific risks are posed by the sector.


Information

The first section under the information is Mutual Evaluation Report (MER). Extract information from the MER relating to these indicators. In addition, any other information can be
provided in the “other information” section.


ML/TF Risk

Based on the information you gathered, please rate the level of risk relating to ML/TF. How does the operating environment based on each indicator raise ML/TF risk? Some
indicators may have more direct impact on the ML/TF risk but others may have rather indirect impact.

Note

Each cell can be expanded as you type the information.
                                                                                                                                                                                            Template 3
Risk/Vulnerability Analysis - Economic and Geographical Environment
Areas*                                                                                                 Information                               ML/TF Risk          Recommendations that
                                                                                                                                                                       may be impacted


                                                         Mutual Evaluation Report (reference to souce of prceeds of   Other Information   High     Medium     Low
                                                                crime, threat, vulnerability and risk of ML/TF)


Economic Environment
Percentage of population having formal access to                                                                                                                    R20, R5-16
financial services
Informal sector of the economy (%)                                                                                                                                  R20, R5-16

Types of payment (cash based or electronic based)                                                                                                                   R20, R5-16


Circulation of foreign currencies                                                                                                                                   R5-16

Frequency of large international financial transaction                                                                                                              R5-16
(larger than _____ [specify the amount relevant to
your country. If not known, use USD 15,000
equivalent])
NPO Sector                                                                                                                                                          SRVIII


Geographical Environment
AML/CFT controls in neighbouring countries                                                                                                                          R21, SRIX
(compliance with FATF 40+9 Recommendations)

Cross-border control                                                                                                                                                SR IX




* Any other relevant areas identified to be included
                                                          Risk/Vulnerability Analysis - Legal/Judicial/Institutional Framework


Objectives
The objective of this worksheet is to analyze weakness in AML/CFT legal, judicial and institutional framework, and assess how weakness in these systems raises ML/TF
risk.

Instruction


Areas

Under the areas, there are six categories: legislation, court system, law enforcement agencies, FIU, international cooperation and customs. Under each of these categories, specific
indicators are provided. You are free to add more indicators or amend the existing ones as you see fit. Since the indicators are self-explanatory, it is not explained in detail in this
instruction.

Green italic words guides each country to consider "other" issues. Once other issues to be considered are identified, write them down. Red mark on the right hand top of the box
indicates some comments/clarification available.

Information

The first section under the information is Mutual Evaluation Report (MER). Extract information from the MER relating to these indicators. In addition, any other information can be
provided in the “other information” section.


ML/TF Risk

Based on the information you gathered, please rate the level of risk relating to ML/TF. How does weakness in the system based on each indicator raise ML/TF risk? Some indicators
may have direct impact on the ML/TF risk but others may have rather indirect impact.
The judgment of “high” “medium” and “low” must be exercised based on the knowledge and expertise you have in your country.

Note

Each cell can be expanded as you type the information.
                                                                                                                                                                                        Template 3
Risk/Vulnerability Analysis - Legal/Judicial/Institutional Framework
Areas*                                                                                          Information                              ML/TF Risk         Recommendations that may
                                                                                                                                                                 be impacted

                                         Mutual Evaluation Report (reference to souce of prceeds of crime,    Other Information   High    Medium      Low
                                                      threat, vulnerability and risk of ML/TF)

Legislation
Gap in AML/CFT laws:                                                                                                                                        R1
Recommended serious offences not
included in the AML law

Gap in AML/CFT laws: Institutions,                                                                                                                          R5-16
business and professions not
included as reporting institutions


Write down other Gaps in AML/CFT
laws if any

Write down other relevant laws, lack
of which may create ML/TF risk


Court system
Prosecution - time taken to conclude                                                                                                                        R28, R30
case
Number of cases prosecuted                                                                                                                                  R1, R2

Number of convictions out of cases                                                                                                                          R1, R2
prosecuted


Law enforcement agencies
Range of powers available                                                                                                                                   R27, R28, R36

Time taken to investigate cases                                                                                                                             R27

Amount of criminal assets frozen,                                                                                                                           R3, SRIII
seized and confiscated


Financial Intelligence Unit
FIU operational                                                                                                                                             R26
Quality of STR and number of STR
received
                                                                                                                                                            R26
Number of cases forward to LEA or
investigated                                                                                                                                                R26

International cooperation
Obstacles to international cooperation
                                                                                                                                                            R36-40, SRV

Customs and other border control
Customs
                                                                                                                                                            SR XI, and other relevant
                                                                                                                                                            FATF 40 Recs on TBML
Write down other border control
agencies that are relevant for
AML/CFT


* Any other relevant areas identified to be included
                                                        Risk/Vulnerability Analysis - Reporting Institutions (Financial Institutions)
Objectives
The objective of this worksheet is to analyze vulnerability of different type of financial institutions arising from the products and services they offer and type of clients they
serve. Control measures are assessed separately so that if your country is yet to regulate specific type of financial institutions with regards to AML/CFT obligations,
assessment can focus on the vulnerability arising from the business. If the specific type of financial institutions is already regulated for AML/CFT measures, then the risk
assessment is based on both the operating environment (products, services and clients offered in the industry) and on the control measures.

Instruction


Areas

Under the areas, regulated financial institutions are categorized based on type of financial institutions. The categorization can be amended based on type of financial institutions that
operate in your country. In fact, in order to make it useful, it is strongly recommended that the list of the types of financial institutions are reclassified or amended to reflect your domestic
financial sector composition. Also under the “other non-regulated financial institutions”, other non-regulated financial institutions that pose ML/TF risks can be added, for example, mobile
phone financial services if that is the case in your country. In addition, illegal or unregulated financial institutions may be also added as they pose ML/TF risks.

Green italic words guides each country to consider "other" issues. Once other issues to be considered are identified, write them down. Red mark on the right hand top of the box indicates
some comments/clarification available.

Information

This worksheet contains many columns for information section. The first is Mutual Evaluation Report (MER). Extract information from the MER relating to risks related to specific type of
financial institutions. Then in the next columns, try to fill in information relating to the size of the industry/group of institutions; existence of products and services that are either high
technology driven or cash-intensive; frequency or % of international transactions; % of non-resident customers; % of customer who are PEPs; number of ML/TF cases investigated which
involved the specific type of institutions; and number of STRs reported on the industry, in other words, STRs that indicated that transactions took place in the industry; and ownership
structure of the industry whether, for example, mainly public or state owned or privately owned institutions and characteristics of corporate governance. Try to fill in as much information as
you can. In addition, any other information can be provided in the “other information” section.

Vulnerability to ML/TF

Based on the information you gathered from the information section, please rate the level of vulnerability each type of financial institutions face vis-a-vis ML/TF threat. How does the
operating environment based on given indicators make specific type of financial institutions vulnerable to ML/TF? The judgment of “high” “medium” and “low” must be made based on the
knowledge and expertise you have in your country

Control Measures

Now assess the control measures that are in place. Given indicators are: general AML regulations/guidelines/enforcement mechanism in place; AML/CFT on-site inspections and off-site
monitoring - supervisory compliance ratings; resources committed to AML/CFT based on supervisory authority’s budget and number of staff; and number of STRs submitted by the
industry.

ML/TF Risk

The ML/TF risk assessment is based on both the operating environment (products, services and clients offered in the industry) and on the control measures. If the industry is highly
vulnerable but control measures are strong, then the overall risk may be considered as medium. Again the judgment should be exercised to determine the risk level.

Note

Each cell can be expanded as you type the information.
Risk/Vulnerability Analysis - Reporting Institutions (Financial Institutions)                                                                                                  Template 3
Areas*                                                                                                      Information



                        Mutual Evaluation    Size of the  High technology/    Frequency or % of % of non-        % of customer   Number of ML/TF     Number of STRs Ownership
                        Report (reference sector/industry cash intensive      international     resident         who are PEPs    cases involving the reported on the structure/Corporate
                           to source of                   product/ services   transactions      customers                        industry            industry        Governance
                       proceeds of crime,
                       threat, vulnerability
                        and risk of ML/TF)



Regulated Financial Institutions

Banking institutions

DFIs / other FIs

Finance companies

Insurance industry

Securities

Offshore
Money
changers/exchange
bureaus

Remittance service
providers
E-money,
credit/charged card
issuers
Money lenders /
pawnbrokers
Leasing and
factoring
Areas*                                                                                                               Information                                                        Template 3



                            Mutual Evaluation    Size of the  High technology/         Frequency or % of % of non-        % of customer   Number of ML/TF     Number of STRs Ownership
                            Report (reference sector/industry cash intensive           international     resident         who are PEPs    cases involving the reported on the structure/Corporate
                               to source of                   product/ services        transactions      customers                        industry            industry        Governance
                           proceeds of crime,
                           threat, vulnerability
                            and risk of ML/TF)



Deposit and credit
guarantee
corporation

Others Non-Regulated Financial Institutions


Write down non-
regulated FIs (e.g.
mobile phone
financial services if it
is not regulated) that
poser ML/FT risk

Write down illegal
operations that
poser ML/FT risk
e.g. underground
banking
* Reporting institutions may be categorized differently in order to reflect domestic environment.
* Any other relevant areas identified to be included
                                                                                                                                                                        Template 3
                           Vulnerability to ML/TF                                       Control Measures                                     ML/TF Risk         Recommendations
                                                                                                                                                                   that may be
                                                                                                                                                                    impacted
Other Information   High          Medium            Low   AML/CFT              AML/CFT on-site        Resources           Number of   High    Medium      Low
                                                          Regulations/         inspections and off-   committed to        STRs
                                                          Guidelines/Enforce   site monitoring -      AML/CFT by          submitted
                                                          ment mechanism in    supervisory            supervisory
                                                          place                compliance ratings     authorities- budget
                                                                                                      + number of staff




                                                                                                                                                                R5-11, R13-15,
                                                                                                                                                                SRVII
                                                                                                                                                                R5-11, R13-15,
                                                                                                                                                                SRVII
                                                                                                                                                                R5-11, R13-15,
                                                                                                                                                                SRVII
                                                                                                                                                                R5-11, R13-15,
                                                                                                                                                                SRVII
                                                                                                                                                                R5-11, R13-15,
                                                                                                                                                                SRVII
                                                                                                                                                                R5-11, R13-15,
                                                                                                                                                                SRVII

                                                                                                                                                                R5-11, R13-15,
                                                                                                                                                                SRVII

                                                                                                                                                                SRVI, R5-11, R13-
                                                                                                                                                                15, SRVII

                                                                                                                                                                R5-11, R13-15,
                                                                                                                                                                SRVII
                                                                                                                                                                R5-11, R13-15,
                                                                                                                                                                SRVII
                                                                                                                                                                R5-11, R13-15,
                                                                                                                                                                SRVII
                           Vulnerability to ML/TF                                       Control Measures                                     ML/TF Risk                 Template
                                                                                                                                                                Recommendations 3
                                                                                                                                                                   that may be
                                                                                                                                                                    impacted
Other Information   High          Medium            Low   AML/CFT              AML/CFT on-site        Resources           Number of   High    Medium      Low
                                                          Regulations/         inspections and off-   committed to        STRs
                                                          Guidelines/Enforce   site monitoring -      AML/CFT by          submitted
                                                          ment mechanism in    supervisory            supervisory
                                                          place                compliance ratings     authorities- budget
                                                                                                      + number of staff




                                                                                                                                                                R5-11, R13-15,
                                                                                                                                                                SRVII
                                                              Risk/Vulnerability Analysis - Reporting Institutions (DNFBPs)
Objectives
The objective of this worksheet is to analyze vulnerability of DNFBPs arising from the products and services they offer and type of clients they serve. Control measures are
assessed separately so that if your country is yet to regulate specific type of DNFBPs with regards to AML/CFT obligations, assessment can focus on the vulnerability arising
from the business. If the specific type of DNFBPs is already regulated for AML/CFT measures, then the risk assessment is based on both the operating environment (products,
services and clients offered in the industry) and on the control measures.

Instruction

Areas

Under the areas, designated non-financial businesses and professions (DNFBPs) are listed. The categorization can be amended based on the DNFBPs operating environment in your
country. Also under the “other businesses and professions”, other business and professions that are considered to pose ML/TF risk should be added.

Green italic words guides each country to consider "other" issues. Once other issues to be considered are identified, write them down. Red mark on the right hand top of the box indicates
some comments/clarification available.


Information

This worksheet contains many columns for information section. The first is Mutual Evaluation Report (MER). Extract information from the MER relating to risks related to specific type of
businesses and professions. Then in the next columns, try to fill in information relating to the size of the businesses and professions; existence of products and services that are either high
technology driven or cash-intensive; frequency or % of international transactions; % of non-resident customers; % of customer who are PEPs; number of ML/TF cases investigated which
involved the specific type of businesses and professions; and number of STRs reported on the businesses and professions, in other words, STRs that indicated that transactions took
place in the businesses and professions; and ownership structure of the businesses and professions whether, for example, mainly public or state owned or privately owned institutions and
characteristics of corporate governance. Try to fill in as much information as you can. In addition, any other information can be provided in the “other information” section.

Vulnerability to ML/TF

Based on the information you gathered from the information section, please rate the level of vulnerability relating to ML/TF each businesses and professions face. How does the operating
environment based on given indicators make specific businesses and professions vulnerable to ML/TF? The judgment of “high” “medium” and “low” must be made based on the
knowledge and expertise you have in your country

Control Measures

Now assess the control measures that are in place. Given indicators are: general AML regulations/guidelines/enforcement mechanism in place; AML/CFT on-site inspections and off-site
monitoring - supervisory compliance ratings; resources committed to AML/CFT based on supervisory authority or self-regulatory organization’s budget and number of staff; and number of
STRs submitted by the businesses and professions.


ML/TF Risk

The ML/TF risk assessment is based on both the operating environment (products, services and clients offered by the businesses and professions) and on the control measures. If the
businesses and professions is highly vulnerable but control measures are strong, then the overall risk may be considered as medium. Again the judgment should be exercised to
determine the risk level.

Note

Each cell can be expanded as you type the information.
                                                                                                                                                                           Template 3
Risk/Vulnerability Analysis - Reporting Institutions (DNFBPs)
                  Areas*                                                                                                           Information



                                           Mutual Evaluation Report         Size of the   High          Frequency or % of non-    % of       Number of       Number of     Ownership
                                            (reference to source of        businesses     technology/   % of          resident    customer   ML/TF cases     STRs          structure/Corpo
                                          proceeds of crime, threat,           and        cash          international customers   who are    involving the   reported on   rate
                                        vulnerability and risk of ML/TF)   professions    intensive     transactions              PEPs       businesses      the           Governance
                                                                                          product/                                           and             businesses
                                                                                          services                                           professions     and
                                                                                                                                                             professions


Reporting institutions (DNFBPs)
Casinos (which also includes internet
casinos)

Real estate agents

Dealer in precious metals and
precious stones

Lawyers

Notaries public

Accountants
Trust and Company Service
Providers

Others Businesses and Professions
Write down other businesses and
professions that poser ML/FT risk
(e.g. gaming outlets)

Write down other businesses and
professions that poser ML/FT risk
(e.g. car dealers)

Write down other businesses and
professions that poser ML/FT risk
(e.g. high-value goods and
consumer durables)




* Any other relevant areas identified to be included
                                                                                                                                                      Template 3

                      Vulnerability to ML/TF                              Control Measures                              ML/TF Risk         Recommendations
                                                                                                                                              that may be
                                                                                                                                               impacted
Other Information   High     Medium       Low   AML/CFT            AML/CFT on-site   Resources       Number of   High    Medium      Low
                                                Regulations/       inspections and   committed to    STRs
                                                Guidelines/Enfor   off-site          AML/CFT by      submitted
                                                cement             monitoring -      supervisory
                                                mechanism in       supervisory       authorities-
                                                place              compliance        budget + number
                                                                   ratings           of staff




                                                                                                                                           R12, R16

                                                                                                                                           R12, R16



                                                                                                                                           R12, R16

                                                                                                                                           R12, R16

                                                                                                                                           R12, R16

                                                                                                                                           R12, R16

                                                                                                                                           R12, R16




                                                                                                                                           R20



                                                                                                                                           R20




                                                                                                                                           R20


                                                                                                                                           R20

								
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