Violators exploit several loopholes of the cross-border trade process to launder money. AML-TRACE is a one-time installation automated software that tracks such illicit activities even when they occur under the radar.
Assessing risk is possible only after it has been identified; this is the function of risk indicators. These vary across businesses as per varying business needs. Also, generally, these risk indicators keep changing even across a particular company from time to time.
Keep in mind that a risk indicator only demonstrates the likelihood of suspicious activities. Also, a single indicator revealing a high-risk customer does not alone warrant suspicion of trade-based money laundering risk. Besides, it doesn’t necessarily provide a clear indication of such activity. It only prompts further monitoring and examination, as required.
However, if multiple indicators reveal a high-risk customer, this warrants a closer examination.
1. Structural Risk Indicators
These include the legal structure, footprint, business activities, and presence of the parties involved in the trade transaction. The indicators are:
2. Account and Transaction Activity Risk Indicators
There are specific patterns of behaviors associated with how a violating trading party uses/manages its account–like an increase in cash usage or trade volume. The indicators are:
3. Trade Activity Risk Indicators
The erring parties execute certain features or attributes of the trade transactions. The indicators are:
4. Trade Document and Commodity Risk Indicators
These bring forth the potential risks associated with trade documentation like invoices, contracts, and quantity reports. The indicators are:
With AML-TRACE, which can be deployed in-site and on-Cloud, you carry out effective customer screening and transaction monitoring and thus, minimize financial fraud risk while improving business competencies. Talk to us to know more.