Financial Crime World

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Anti-Money Laundering (AML) and Combating Financial Crime in Capital Markets

It appears that you have provided a large amount of text from the Central Bank of Bahrain’s Rulebook Volume 6: Capital Markets, specifically Section AML-C1 and Section AML-C2 related to Anti-Money Laundering (AML) and Combating Financial Crime.

Section AML-C1: Introduction Risk-Based Approach

The risk-based approach is central to effective implementation of FATF Recommendations. Capital Market Service Providers must design and implement AML/CFT/CPF control measures by providing a common understanding of what the RBA encompasses.

  • The RBA recognizes that ML/TF/PF threats vary across customers, geographies, products, services, transactions, and distribution channels.
  • It is essential to have a clear understanding of the risk-based approach to ensure effective implementation of AML/CFT/CPF control measures.

Section AML-C2: Risk Assessment

Capital Market Service Providers must take steps to identify, assess, monitor, manage, and mitigate ML/TF/PF risks in relation to its:

  • Customers
  • Countries or jurisdictions of customers’ residence or connection
  • Countries or jurisdictions the provider operates in
  • Products, services, transactions, or delivery channels

Key Requirements for Risk Assessment

  • The risk assessment must be documented.
  • It must consider all relevant risk factors.
  • The risk assessment must be kept up-to-date through periodic reviews.
  • Capital Market Service Providers must conduct additional risk assessments as required by the CBB.

Customer Risk Profile

Capital Market Service Providers must implement and maintain policies and procedures to conduct risk assessment of customers during business relationship establishment and throughout its course. The risk assessment must consider:

  • Country risk
  • Customer risk
  • Products/services/transactions risk
  • Delivery/distribution channel risk

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