Financial Crime World

Saudi Arabia’s National Risk Assessments on Money Laundering and Terrorism Financing: Identifying and Mitigating Threats

The National Risk Assessments (NRAs) on Money Laundering (ML) and Terrorism Financing (TF) in Saudi Arabia play a crucial role in strengthening the kingdom’s Anti-Money Laundering and Counter-Terrorism Financing (AML/CFT) regime. Conducted by the Anti-Money Laundering Permanent Committee (AMLPC) for ML and the Permanent Committee for Counter Terrorism (PCCT) for TF, these assessments offer valuable insights into the threats, vulnerabilities, and consequences confronting the Saudi Arabian financial sector.

Importance of ML/TF Risk Assessments

An ML/TF risk assessment is a critical process aimed at identifying, analyzing, and addressing risks. In Saudi Arabia, the NRAs focus on the three components of ML/TF risk: threat, vulnerability, and consequence. Their main objectives include:

  1. Evaluating and improving the current AML/CFT regime.
  2. Identifying and prioritizing risk mitigation activities.
  3. Making informed decisions regarding AML/CFT coverage for low-risk sectors and products.

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Key Objectives of ML/TF Risk Assessments

  1. Evaluate and improve the current AML/CFT regime.
  2. Identify and prioritize risk mitigation activities.
  3. Make informed decisions regarding AML/CFT coverage for low-risk sectors and products. [/background-color:transparent]

Methodology and Data Collection

AMLPC and PCCT employed a comprehensive range of qualitative and quantitative data for the ML and TF risk assessments. Sources included:

  • Competent authorities
  • Survey results
  • Technical team meetings
  • International, regional, and national sources

Additional information was gathered from:

  • Annual reports from competent authorities
  • SAFIU strategic analysis reports
  • Academic studies
  • Governmental think tank research
  • Verdict cases
  • Published reports
  • Open-source data
  • Workshops with experts

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Data Sources for ML/TF Risk Assessments

Sources of data included:

  • Competent authorities
  • Surveys
  • Technical team meetings
  • International, regional, and national sources
  • Annual reports
  • SAFIU strategic analysis reports
  • Academic studies
  • Governmental think tank research
  • Verdict cases
  • Published reports
  • Open-source data
  • Workshops with experts [/background-color:transparent]

Identifying Threats, Vulnerabilities, and Consequences

Technical teams were established, composed of stakeholders from multiple competent authorities, including LEAs, supervision bodies, investigation and prosecution entities, other relevant authorities, and the private sector. These teams identified threats, vulnerabilities, and consequences associated with ML and TF risks for Financial Institutions (FIs), Designated Non-Financial Businesses and Professions (DNFBPs), legal persons, and Non-Profit Organizations (NPOs).

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Identifying Threats, Vulnerabilities, and Consequences

Technical teams identified threats, vulnerabilities, and consequences for:

  • Financial Institutions (FIs)
  • Designated Non-Financial Businesses and Professions (DNFBPs)
  • Legal Persons
  • Non-Profit Organizations (NPOs) [/background-color:transparent]

Collaboration and Resource Allocation

Following the completion of the ML and TF risk assessments, workshops were held with other relevant permanent committees and competent authorities to discuss findings and provide guidance on priorities and allocating resources towards mitigating these risks. The private sector actively participated, contributing valuable input through questionnaires and further detailed data as needed.

AMLPC and PCCT, in collaboration with other competent authorities, prepared national strategic objectives and a National Action Plan to address the outlined ML and TF risks in the kingdom. These initiatives support ongoing efforts to mitigate risks identified in the ML and TF risk assessments.

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Collaborative Efforts

  • Workshops: Discussed findings and provided guidance on priorities and resource allocation
  • Private sector participation: Contributed valuable input through questionnaires and detailed data
  • National strategic objectives and a National Action Plan: Support ongoing efforts to mitigate risks identified in the ML and TF risk assessments