Financial Crime World

Here is the article rewritten in markdown format:

GABON: Implementing a Risk-Based Approach to Compliance

A significant shift in the way companies manage compliance has been sparked by the introduction of the new ISO 19600 standard, which emphasizes the importance of integrating risk management with compliance. In Gabon, organizations are now under pressure to adopt a more proactive approach to managing compliance risks.

Overlapping Processes

Compliance risks are often similar to operational risks, with the only difference being that compliance risks can lead to an actual or potential breach of regulatory requirements. Therefore, many of the risk events that cause compliance breaches will also lead to other operational impacts such as financial loss or reputation damage. Organizations in Gabon can leverage existing operational risk management processes for compliance risk management.

Leveraging Existing Processes

Some examples of processes that can be leveraged include:

  • Risk and Control Self-Assessment: Compliance risks should be considered in the overall risk assessment.
  • Stress Testing: Severe compliance breaches should be considered as part of the overall stress testing program.
  • Key Risk Indicators (KRIs): Early warning indicators should be put in place around key compliance risks.
  • Incident Management: Compliance breaches should be managed using the same approach as other risk incidents.

Separate Considerations

While many processes can be leveraged for both operational and compliance risk management, there are some nuances that must be separately considered. These include:

Identifying Compliance Obligations

Identifying and recording compliance obligations linked to source legislation or guidance is a crucial step in managing compliance risks.

Developing a Risk-Based Approach

Developing a risk-based approach to compliance, with the application of standard ERM processes only being suitable for key compliance risks, requires careful consideration and planning.

Conclusion

The new ISO 19600 standard marks a significant shift in the way companies manage compliance in Gabon. By adopting a risk-based approach and integrating compliance risk management with enterprise risk management, organizations can ensure they are adequately managing their compliance obligations while also leveraging existing risk management processes.