Risk Data Service (Country AML Risk Score Classification)

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Overview

RDS is a database list that rates countries of the world as they pertain to Anti Money Laundering (“AML”) and Sanctions risk.

AML Partners is an Anti-Money Laundering software and consulting company serving financial institutions internationally. In an effort to assist financial institutions cope with their complex regulatory landscape we have designed a methodology to assess the AML Risk with countries of a world. We call this utility our Country Evaluator and what it provides is an AML Risk Score for each country.

We have evaluated each Country against what we consider as Concern Lists of the world. Countries obtain Risk Scores based on their listing on a major Sanctions list such as the OFAC Sanctioned List. Some of the Concern lists used in our methodology are the ‘OFAC Country Sanctions, United Nation Sanctioned Countries, European Union Sanctioned Countries, Corruption Perception Index, FinCEN Advisory Countries, OffShore Financial Centers and many more.

Branch and Customer Risk Assessment(s) Financial Institutions can utilize the Country Evaluator to conduct Risk Assessments of their Customer Base where an evaluation could done on a customer’s domicile or where they are incorporated or even where they conduct their business, referred to as Trade Areas.

Transaction Monitoring The Country Evaluator could be used to determine the level of monitoring needed for customer transactions depending on the level of AML Risk the country possesses. Transactions conducted through higher risk countries could be monitored more tightly versus Lower risk countries.

Key Features

RDS evaluates the perceived risk a country presents for the Possibility and Probability of Money Laundering and/or Terrorist Financing through the evaluated country.

RDS uses for the most part, published lists and evaluations from the US Government or recognized Worldwide Non-Government organizations such as Transparency Internationals Corruption Perception Index (CPI) to score each country from 0 (lowest Risk) to 100 (highest Risk).

The Risk Score to Risk Class breakout is as follows:

• 0-33 (Low Risk)

• 34-66 (Medium Risk)

• 67-100 (High Risk)

RDS is designed to be used as a Risk Factor (or Factors) in a Weighted Risk Assessment Methodology, such as AML Partners’ P3 Method (Possibility and Probability Principles of Risk).

Annually, after the US Secretary Of State publishes the International Narcotics Control Strategy Report, (referred to as the INCSR) AML Partners conducts our evaluation. Though this is an annual evaluation, from time to time throughout the year we may, at our discretion, provide an update to a country or set of countries based on current events.

Within the Model, a mechanism exists for each institution to increase the perceived risk of any country. The institution need only go to the appropriate Colum and Row and add a 0.1 to 4 for the country that the institution wishes to increase Risk for. Should an institution wish to add 30 points, they need only to add a 1 in the correct Row and Colum for the country they wish to increase risk for. Entering a 2 will increase the risk by 60 points, a 3 raises Risk to 90 points, but a 4 will only bring the score to 100, which is the highest possible score. If an institution wishes to add less than 30 points, they need only enter in a value of 1. For example, if an institution wishes to add 7.5 points they would enter the value of .25 in the row for that country in the override Column.

Key Benefits

Updates are provided quarterly.

Branch and Customer Risk Assessment(s) Financial Institutions can utilize the Country Evaluator to conduct Risk Assessments of their Customer Base where an evaluation could done on a customer’s domicile or where they are incorporated or even where they conduct their business, referred to as Trade Areas.

Transaction Monitoring The Country Evaluator could be used to determine the level of monitoring needed for customer transactions depending on the level of AML Risk the country possesses. Transactions conducted through higher risk countries could be monitored more tightly versus Lower risk countries.

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