Financial Crime World

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Risk Assessment Methodology for Money Laundering, Terrorism Financing, and Proliferation Financing

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Overview of the Risk Assessment Methodology

The risk assessment methodology used for Money Laundering (ML), Terrorism Financing (TF), and Proliferation Financing (PF) is based on the Financial Action Task Force (FATF) ML/TF/PF risk assessment methodology. This methodology consists of three stages: Identification, Analysis, and Evaluation.

Stage 1: Identification

Identifying Threats and Vulnerabilities

  • Identify threats and vulnerabilities related to ML, TF, and PF.
  • Analyze qualitative and quantitative data from various sources, including:
    • Documentary research (reports, sectoral risk assessments, previous research)
    • Official crime and ML/TF/PF statistics
    • Case studies, typology, in-depth interviews, and focus group interviews

Stage 2: Analysis

Evaluating Risk Indicators

  • Evaluate the nature, sources, likelihood, and consequences of identified risks using a likelihood and consequence index.
  • Consider indicators such as:
    • Number of detectable cases
    • Amount of seizure
    • Frequency of crime
    • Level of control
    • International impacts
    • Impacts on the financial system and financial institutions
    • Impacts on the economy

Stage 3: Evaluation

Prioritizing Risks and Mitigation Measures

  • Prioritize risks based on likelihood and consequence index scores.
  • Consider appropriate risk avoidance and mitigation measures.

Initiatives in Thailand National Risk Assessment

Detection Capacity Model

  • The Detection Capacity Model estimates the size and value of ML by calculating criminal income from the National Crime Victimization Survey (NCVS) 2021.
  • This model aims to improve the detection capacity for ML cases.

Big Data Analytics Technique

  • A big data analytics technique is used to consider potential risk of unfair trade and price manipulation from personal linkage of executives in public limited companies listed on the Thai Stock Exchange Market.