Financial Crime World

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

Overview

The Financial Action Task Force’s (FATF) risk assessment methodology is a comprehensive framework used to identify and evaluate threats related to money laundering (ML), terrorism financing (TF), and proliferation financing (PF). This report provides an overview of the key points involved in conducting a thorough risk assessment using this methodology.

Risk Assessment Methodology

Identification

  • Threats: Identify threats and vulnerabilities by analyzing various sources, including:
    • Predicate offenses and non-predicate offenses relevant to domestic and transnational crime.
    • Illicit financial flows, chances, methods, size, and value.
    • Payment methods or businesses used in placement, layering, and integration of ML.

Analysis

  • Threats: Analyze the nature, sources, likelihood, and consequences of risk factors using a likelihood index (consisting of 4 indicators) and a consequence index (consisting of 7 indicators).

Evaluation

  • Prioritization: Prioritize risks and consider appropriate risk avoidance and mitigation measures.

Threats Analysis

Money Laundering

  • Analyze predicate offenses and non-predicate offenses relevant to domestic and transnational crime.
  • Examine the use of payment methods or businesses in placement, layering, and integration.

Terrorism Financing

  • Analyze the movement of individual groups and entities relevant to terrorist activities and terrorism financing.

Proliferation Financing

  • Analyze individuals, groups, and entities involved in WMD proliferation and potential breaches or non-implementation of targeted financial sanctions.

Vulnerability Analysis

  • Consider the nature, sources, likelihood, and consequences of risk factors using the likelihood index (4 indicators) and consequence index (7 indicators).

Additional Methods

  • Detection Capacity Model: Estimate the size and value of ML.
  • Big data analytics techniques: Consider potential risks of unfair trade and price manipulation.

Conclusion

This report provides an overview of the risk assessment methodology used to identify and evaluate threats related to money laundering, terrorism financing, and proliferation financing in Thailand. By understanding these methodologies, organizations can better mitigate risks and prevent illicit financial activities.