Anti-Money Laundering

On-line checks to quickly meet your obligations for individuals and companies.

Introduction to the Risk Based Approach

The approach you take to due diligence should reflect the level of risk that your firm faces. Whether that be in relation to your customers, the services or products that you provide or the jurisdictions that you work in. By identifying these risks they can then be mitigated by implementing adequate policies and procedures that are proportionate to these risks. Having these adequate policies and procedures in place, provides a certain level of protection in investigations regarding money laundering.

The initial step to determining your risked based approach is to identify the potential risks when establishing a business relationship with your customers or providing a one off transaction.   The following table provides key areas that should be reviewed and considered :

  Area

  Consideration
  Customer

  Type of customer

  Nature of relationship

  Location of the customer

  Political Exposure

 Product/Service 

  Nature of the product /service

  Risk of use for money laundering

  Delivery method

  Location of product/service delivery

  Risk of use for money laundering


Once the potential risks to your firm have been established it is likely not all of your customers and services will pose the same level of risk. As such its unlikely that you will need to know all your customers equally. The JMLSG refers to three levels of due diligence, standard due diligence, customer due diligence and enhanced due diligence. The level of identified risk will determine the level of due diligence that is required.   

Any due diligence that is completed should be should be inline with your documentation policies and procedures and should be documented for future reference.

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