BACKGROUND

RISK BASED APPROACH

With the introduction of the Risk Based Approach as the overriding principle in the fight against financial crime, country risk has been identified as being one of the most important risk factors to consider when assessing the financial crime risk of any customer. It is an integral part of any customer due diligence and risk assessment process.

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When assessing a customer’s risk profile, Financial Institutions need to consider not only the financial crime risk related to the customer and the customer’s source of funds and wealth, but also the political landscape, legal frameworks, and their effectiveness, in the relevant countries associated with the customer. Further information on risk factors can be found later in this module.