What are a reporting entity’s obligations with regard to risk mitigation?


Every reporting entity is required to exercise ongoing due diligence with respect to the business relationship with every client and closely examine the transactions in order to ensure that they are consistent with their knowledge of the client, his business and risk profile and where necessary, the source of funds. 

Every reporting entity should carry out risk assessment to identify, assess and take effective measures to mitigate its money laundering and terrorist financing risk for clients, countries or geographic areas, and products, services, transactions or delivery channels 

The risk assessment should be documented, should consider all the relevant risk factors before determining the level of overall risk and the appropriate level and type of mitigation to be applied, should be kept up to date and should be available to competent authorities and self-regulating bodies.