September 7, 2015
Financial Crime Risk Assessments are one element of the Financial Crime Compliance (FCC) toolkit and serve to highlight key risk areas, how well those risks are managed and support a risk-based allocation of resource to the highest risk areas, as well as the establishment of action plans for managing identified risks. The Wolfsberg Group of International Financial Institutions has prepared FAQs on the key aspects of financial crime risk assessments. The Group hopes that these FAQs will contribute to the promotion of effective risk management while supporting the prevention of the abuse of the financial system for criminal purposes.
Wolfsberg Risk Assessment FAQ
Global Banks: Global Standards
The Wolfsberg Group is an association of thirteen global banks which aims to develop frameworks and guidance for the management of financial crime risks, particularly with respect to Know Your Customer, Anti-Money Laundering and Counter Terrorist Financing policies.
The Group came together in 2000, at the Château Wolfsberg in north-eastern Switzerland, in the company of representatives from Transparency International, including Stanley Morris, and Professor Mark Pieth of the University of Basel, to work on drafting anti-money laundering guidelines for Private Banking. The Wolfsberg Anti-Money Laundering Principles for Private Banking were subsequently published in October 2000, revised in May 2002 and again most recently in June 2012.
The Group then published a Statement on the Financing of Terrorism in January 2002, and also released the Wolfsberg Anti-Money Laundering Principles for Correspondent Banking in November 2002 and the Wolfsberg Statement on Monitoring Screening and Searching in September 2003. In 2004, the Wolfsberg Group focused on the development of a due diligence model for financial institutions, in co-operation with Banker's Almanac, thereby fulfilling one of the recommendations made in the Correspondent Banking Principles. More information is available by clicking on the "Due Diligence Repository" link above.
During 2005 and early 2006, the Wolfsberg Group of banks actively worked on four separate papers, all of which aim to provide guidance with regard to a number of areas of banking activity where standards had yet to be fully articulated by lawmakers or regulators. It was hoped that these papers would provide general assistance to industry participants and regulatory bodies when shaping their own policies and guidance, as well as making a valuable contribution to the fight against money laundering. The papers were all published in June 2006, and consisted of two sets of guidance: Guidance on a Risk Based Approach for Managing Money Laundering Risks and AML Guidance for Mutual Funds and Other Pooled Investment Vehicles. Also published were FAQs on AML issues in the Context of Investment and Commercial Banking and FAQs on Correspondent Banking, which complement the other sets of FAQs available on the site: on Beneficial Ownership, Politically Exposed Persons and Intermediaries.
In early 2007, the Wolfsberg Group issued its Statement against Corruption, in close association with Transparency International and the Basel Institute on Governance. It describes the role of the Wolfsberg Group and financial institutions more generally in support of international efforts to combat corruption. The Statement against Corruption identifies some of the measures financial institutions may consider in order to prevent corruption in their own operations and protect themselves against the misuse of their operations in relation to corruption. Shortly thereafter, the Wolfsberg Group and The Clearing House Association LLC issued a statement endorsing measures to enhance the transparency of international wire transfers to promote the effectiveness of global anti-money laundering and anti-terrorist financing programmes.
In 2008, the Group decided to refresh its 2003 FAQs on PEPs, followed by a reissued Statement on Monitoring, Screening & Searching in 2009. 2009 also saw the publication of the first Trade Finance Principles and Guidance on Credit/Charge Card Issuing and Merchant Acquiring Activities. The Trade Finance Principles were expanded upon in 2011 and the Wolfsberg Group also replaced its 2007 Wolfsberg Statement against Corruption with a revised, expanded and renamed version of the paper: Wolfsberg Anti-Corruption Guidance. This Guidance takes into account a number of recent developments and gives tailored advice to international financial institutions in support of their efforts to develop appropriate Anti-Corruption programmes, to combat and mitigate bribery risks associated with clients or transactions and also to prevent internal bribery.
Most recently, focus has expanded to the emergence of new payment methods and the Group published Guidance on Prepaid & Stored Value Cards, which considers the money laundering risks and mitigants of physical Prepaid and Stored Value Card Issuing and Merchant Acquiring Activities, and supplements the Wolfsberg Group Guidance on Credit/Charge Card Issuing and Merchant Acquiring Activities of 2009.
You may reach the websites of the individual member banks of the Wolfsberg Group via the links to the right.
For background information on the Wolfsberg Group and its work, you may find it useful to read the attached articles "The Wolfsberg Group" by Hans-Peter Bauer and Gemma Aiolfi and "The Private Sector becomes active: The Wolfsberg Process" by Mark Pieth and Gemma Aiolfi.