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Compliance Risks for Small Businesses in Malta: Why Conducting a Business Risk Assessment (BRA) Matters
Small businesses in Malta are no strangers to the importance of risk management. With the ever-evolving regulatory landscape, it’s crucial for entrepreneurs to stay ahead of the game and identify potential risks that could impact their operations.
What is Risk Management?
Risk management is a critical business activity that involves identifying, evaluating, monitoring, and improving risk mitigation processes within an organization. While all sizes of firms engage in risk management, small businesses often formalize it as they grow. Effective risk management ensures stability and minimizes the likelihood of losses due to unforeseen events.
Why Conduct a BRA?
As of January 2018, Regulation 5(1) of the Prevention of Money Laundering and Funding of Terrorism Regulations and Section 3.3 of the FIAU Implementing Procedures Part I (IPs) require businesses to conduct a Business Risk Assessment (BRA). The purpose of this assessment is to determine potential Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) risks that a business may face when conducting a relevant activity.
What is a BRA?
A BRA is a crucial document that outlines an organization’s risk-based approach to ensure its business model aligns with its risk appetite. It involves implementing and applying AML/CFT measures to allocate resources effectively in areas where the risk of money laundering or terrorist financing is higher than usual.
Key Components of a BRA
- Identifying and assessing all evident risks
- Establishing goals and identifying risk areas
- Analyzing types of risks
- Evaluating and ranking risks
- Developing strategy plans
- Monitoring and reviewing risks
How Should a BRA be Conducted?
A clear methodology for conducting the BRA is essential to obtain accurate results. The process should outline how to evaluate the likelihood and impact of identified risks, as well as the effectiveness of corresponding controls. A step-by-step procedure helps organizations avoid mistakes that could lead to ignoring significant ML/FT dangers or focusing on areas with low-risk exposure.
How Does a BRA Cater for Different Client Needs?
A BRA is a tailored document that reflects a client’s unique business model, operations, and scenarios. By conducting a thorough assessment, businesses can identify specific risks and develop targeted strategies to mitigate them.
Benefits of Conducting a BRA
- Identifies potential AML/CFT risks
- Develops a risk-based approach to business operations
- Allocates resources effectively
- Enhances regulatory compliance
Why Choose MK Services for Your Business Risk Assessment?
Michael Kyprianou Services offers a wealth of knowledge and experience in AML/CFT, Business Risk Assessments, and Compliance services. Our tailored assistance can help your business navigate compliance risks and ensure regulatory peace of mind.
Contact Us
If you’re interested in learning more about our Business Risk Assessment services, please contact us at infomalta@kyprianou.com or telephone +356 2016 1010.
Disclaimer
The content of this article is valid as of its first publication date. It provides general guidance on the subject matter and does not constitute legal advice. We recommend seeking professional advice on your specific matter before acting on any information provided.