Money Laundering Risk Areas The World Bank Other High Money Laundering Risk Areas Mark Butler Financial Sector Specialist, Financial Market Integrity, The World Bank April 17, 2006

Overview Risk Assessment High Risk Customer Policy High Risk Customer Types High Risk Product Types Country Specific Risks

Risk Assessment Adopting Risk Based Approach Customer Types Product Type Geographical Factors

High Risk Customer Policy Account Opening Identify and Verify Additional Information Senior Management Approval Account Monitoring Type of Monitoring and Frequency Renewal of Customer Information Renewal of Authority to Maintain Account

High Risk Customer Types Politically Exposed Persons Cash Intensive Businesses High Risk Business Activities Private Banking Complex Corporate Structures Use of Intermediaries

High Risk Customer Types Politically Exposed Persons Individuals who are or have been entrusted with prominent public functions in a foreign country, such as Heads of State or of government, senior politicians, senior government, judicial or military officials, senior executives of state owned corporations, important political party officials

High Risk Customer Types Cash Intensive Businesses Casinos Foreign Exchange Remittance Businesses High Risk Business Activities Arms / Chemicals

High Risk Customer Types Private Banking High Net Worth Individuals PEPs Complex Corporate Structures Intermediaries

High Risk Product Types - Ease of Access to Funds Passbook / Cheque / ATM / Phone Banking / Internet Banking Ability to Conduct Wire Transfers No time restrictions Withdrawal charges International Access Interaction with the Account Holder Expected Activity Level within the Account Expected Size and Turnover of the Account

Country Specific Risks Low or no AML/CFT regulation High Levels of Corruption Links to Crime Drugs Fraud Counterfeit Goods Illegal Logging

Money Laundering Risk Areas The World Bank Other High Money Laundering Risk Areas Mark Butler Financial Sector Specialist, Financial Market Integrity, The World Bank April 17, 2006