Several US-based financial agencies, including the Financial Crimes Enforcement Network (FinCEN) and the Office of the Comptroller of the Currency (OCC), have issued a joint statement to help banks revisit the importance of a risk-based approach to assessing customer relationships and carrying out customer due diligence (CDD).
The statement emphasizes that banks must apply a risk-based approach to CDD, even when developing customer risk profiles. The risk-based approach will help banks understand the nature and purpose of customer relationships to create a customer risk profile. Moreover, it will guide continuous transaction monitoring to identify and report suspicious transactions.
The statement restates that no customer type (such as non-resident aliens, or charities, or politically exposed persons, etc.) should be inherently associated with a uniform risk level or a specific ML/TF risk profile. The risk posed by a customer depends on many factors that may be very unique to a particular customer relationship. As long as banks comply with AML/CFT laws, they are free to provide their services to customers of any type/class. The banks should then manage customer relationships and handle customer risks on a case-to-case basis.
Source: FinCEN, USA
