Money Laundering Country Risk Rating Definition and Processes
In addition to assessing a customer’s name and address (country) against the OFAC and other sanctioned lists, the customer’s domicile needs to be assessed against country-specific money laundering risk ratings.
Domicile – Entities:
- Domicile of registration, and
- Domicile of operations (if different from domicile of registration)
Domicile – Individuals:
- Jurisdiction of residence
- Jurisdiction of citizenship
The money laundering risk rating of every country needs to be included in the risk rating methodology used to assess the customer’s overall risk rating.
A domicile may have one of three country money laundering risks:
- Normal country money laundering risk rating: the domicile has strong anti-money laundering regulations
- Medium country money laundering risk rating: the domicile has some weaknesses in its anti-money laundering laws
- High country money laundering risk rating: the domicile has low or non-existent anti-money laundering laws
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