Risk Assessment in Anti-Money Laundering
As it comes to anti-money laundering, risk assessment is vitally important. In short, risk assessment is a thorough examination of what can potentially harm somebody. It is evaluating whether precautions are good enough and harm prevention is obvious.
Last year, Michelle L. Neufeld (Vice President & Assistant General Counsel, Legal and Compliance Department, JP Morgan Chase & Co.) made the presentation on risk assessment at SIA Anti-Money Laundering Conference on the 17th of March, 2005.
The list of high risk client types indicated by Michelle L. Neufeld was of a particular interest. In accordance with the presentation materials, high risk clients are as follows:
international correspondent banks,
shell banks,
investment advisors/brokers,
personal investment companies/ personal holding companies/ offshore trusts
other money service businesses
money transmitters,
foreign currency exchanges,
check cashers,
import/ export companies,
casinos and gambling establishments,
travel agencies,
deposit brokers,
traders, agents and auctioneers in luxury goods,
jewel, gem and precious metal dealers,
professional service providers (lawyers, notaries, accountants, company services),
bank note traders,
loan and credit agents,
phone card companies,
car, plane and boat dealerships/ operators,
leather goods stores,
pawn brokers,
ship, bus and plane operators,
telemarkets,
embassies, missions, consulates
hedge funds,
coupon redemption businesses/ coupon clipping houses,
ATM vendors/ providers,
salvage businesses,
private banking entity,
special purpose vehicles,
charities, societies, clubs,
brokers/ dealers,
cash intensive businesses.
So, the above is quite an impressive list, perhaps, however, not exhaustive. Of course, this is just one aspect of risk assessment. The others to follow soon.