Purpose and Scope
Becfin is obliged to comply with the Austrian and European AML/CFT laws and regulations. Non-compliance with these requirements could result in disciplinary actions initiated by the regulatory authorities, fines, restrictions of business, reputational risk and even the loss of the rights to offer the services and products.
Becfin has established the internal structure and mechanism to minimize the risk arising from the money laundering and terrorism financing, which consists of client due diligence policy and all its annexes. The documents prepared are a guidance for employees to identify and prevent money laundering and terrorist financing activities.
Legal and Regulatory Framework
This section provides an overview of the relevant laws, regulations, and industry standards related to anti-money laundering (AML) and countering the financing of terrorism (CFT). It helps employees understand the legal obligations and the consequences of non-compliance
European and International Legal Framework
Austrian Legal Framework
Upcoming Laws and Regulations
Risk-Based Approach
The risk-based approach is a fundamental principle in the field of AML and CTF that guides organizations in assessing and mitigating risks associated with financial crimes. It recognizes that not all clients, transactions, or business relationships pose the same level of risk and emphasizes the need to allocate resources and implement controls based on the level of risk identified.
Here are the key aspects of the risk-based approach:
1. Risk Assessment: Organizations conduct risk assessments to identify and understand the potential risks they face in relation to money laundering and terrorist financing. This involves evaluating factors such as the nature of the business, client types, geographical locations, products and services offered, and the overall regulatory environment. The risk assessment helps deter-mine the inherent risk associated with various elements of the organization's operations.
2. Client Risk Profiling: Once the risks are identified, organizations assess the risk posed by indi-vidual client. This involves profiling clients based on factors such as their business activities, geographic location, transaction volumes, political exposure, and reputation. Clients are typi-cally categorized into risk levels, such as high-risk, medium-risk, and low-risk, based on the as-sessment of their characteristics and behaviors.
3. Enhanced Due Diligence (EDD): The risk-based approach calls for applying enhanced due dili-gence measures to higher-risk clients. Enhanced due diligence involves gathering additional in-formation and conducting more extensive verification procedures to ensure a deeper under-standing of the client's activities, the source of their funds, and the purpose of their transac-tions. This may include conducting in-person meetings, verifying the source of wealth, and ob-taining additional supporting documentation.
4. Monitoring and Controls: The risk-based approach guides organizations in determining the ap-propriate level of monitoring and control measures. Higher-risk clients and transactions require more robust monitoring, including real-time transaction monitoring, ongoing review of client activities, and periodic updates of client information. Lower-risk clients, on the other hand, may be subject to less stringent monitoring requirements.
5. Reporting and Escalation: The risk-based approach emphasizes the importance of reporting and escalating suspicious activities in accordance with applicable laws and regulations. Organiza-tions are encouraged to develop systems and processes to detect and report suspicious trans-actions or behaviors, ensuring that higher-risk indicators are given appropriate attention and reported to the relevant authorities.
6. Ongoing Review and Updating: The risk-based approach is not a one-time exercise. It requires organizations to regularly review and update their risk assessments, client risk profiles, and control measures based on evolving risks, changes in the business environment, and new regu-latory requirements. Regular reviews help ensure that the organization's risk management practices remain effective and aligned with the current risk landscape.