Financial Crime World

Financial Crime Risk Assessment Tools Take Center Stage in Maldives

The World Bank has facilitated the development of systematic and multidisciplinary participatory processes to help countries assess their financial crime risks. In the case of the Maldives, this approach has enabled the country to build capacity for the longer term and establish a process for regularly updating its understanding of the country’s risks.

A Comprehensive Risk Assessment Tool

At the heart of the risk assessment advisory package is a methodological tool developed by the World Bank. This Excel-based model enables countries to identify the main drivers of money laundering/terrorist financing (ML/TF) risks, providing a comprehensive and structured approach to assessing threats and vulnerabilities.

Key Features of the Tool

  • Consists of several interrelated modules that are built on input variables representing factors related to ML/TF threats and vulnerabilities.
  • Includes ratings assigned by experienced practitioners from government and private sectors, which are justified with quantitative and qualitative data.
  • Each input variable has an assigned weight and impact on the vulnerability level of the assessed sector or area.

The Three-Phase Risk Assessment Process

  1. Preparation: The World Bank provides written guidance on setting up a National Risk Assessment Working Group, collecting pre-assessment data, and managing logistics.
  2. Assessment: A three-day workshop introduces the assessment tool and launches the assessment process. Working group members receive hands-on training on the risk assessment tool and begin the assessment process.
  3. Finalization: A final three-day workshop reviews the risk assessment results, designs a risk-based action plan, and discusses implementation issues.

Key Outputs of the Risk Assessment Process

  • Populated tool highlighting areas of higher, medium, or lower risk in various sectors and at a general national level.
  • A risk assessment report documenting the assessment process, findings, and evidence, which should be published or made available to stakeholders.
  • A detailed action plan for implementing a risk-based approach to prevent and mitigate identified ML/TF risks.

Maldives Takes Ownership of Risk Assessment Process

The risk assessment is organized, led, and owned by the Maldivian government, facilitated by technical support from the World Bank. The process involves establishing a working group comprising representatives from relevant AML/CFT stakeholders, including:

  • Financial Intelligence Unit
  • Central Bank
  • Regulatory agencies
  • Self-regulatory bodies
  • Law enforcement
  • Tax authorities
  • Customs

Quick Facts

  • Managed and owned by the Maldivian government with technical support from the World Bank.
  • Capacity-building activity enabling future risk assessments without external support.
  • Involves all relevant AML/CFT stakeholders from public and private sectors for enhanced cooperation.
  • Clear timetable ensures completion within a reasonable timeframe (6-9 months).
  • Cost-effective.