Financial Crime Risk Assessment: AML Guide
In brief: A financial crime risk assessment identifies how a client, service, transaction, geography, ownership structure, or behaviour could expose the firm to financial crime.
Key points
- Financial crime risk is broader than money laundering risk.
- Assess the client, service, funds, ownership, geography, and behaviour together.
- The output should be a decision, not just a score.
What is a financial crime risk assessment?
A financial crime risk assessment looks at exposure to money laundering, fraud, bribery, corruption, sanctions breaches, terrorist financing, tax evasion, and other misuse of financial or professional services.
For accountants and law firms, the assessment should be practical. It should explain why this client, matter, service, money, and structure are acceptable or not.
Risk factors to review
- Client type and behaviour.
- Service or matter type.
- Ownership and control.
- Source of funds and wealth.
- Countries and counterparties.
- PEP, sanctions, and adverse media exposure.
- Unusual urgency, complexity, or secrecy.
What to record
Record the facts, risk rating, evidence reviewed, enhanced measures, approval, and review trigger.
This guide is general information for UK regulated firms, not legal advice. Check the Money Laundering Regulations 2017, HMRC's money laundering supervision responsibilities, and your supervisor's current guidance before making a compliance decision.