Your Client Has a High Risk Rating

A client or transaction may be classified as high risk when there is an increased potential for money laundering or terrorist financing, based on factors such as:


  • Client profile or occupation
  • Source of funds or source of wealth
  • Geographic exposure, including high-risk jurisdictions
  • Complex ownership structures or third-party involvement
  • Presence of multiple or significant red flags
  • Client has a connection to a country under Ministerial Direction
  • Client is a Foreign PEP//HIO
  • Client shows up on a Sanctions List


When a high risk rating is assigned, enhanced due diligence must be applied, including:

  • Obtaining additional information and documentation (Income and Down Payment) to better understand the client and the transaction
  • Source of Funds and Wealth Verification: Trace and evidence the source of funds and wealth (See Definitions section below)
  • Open Public Searches: Search the client and any related PEPs on OpenSanctions.org. Retain search results in the file.
  • Escalating the file to the compliance team for review and direction



When you mark your client as High Risk in Velocity, the ABW compliance team gets notified. They will review the notes you have in your Conclusion section of Velocity to try to understand the clients situation, reasoning and steps taken by you. Please ensure your notes describe this.


 You will receive an email from the compliance team with questions and to walk you through the process in determining if:


  • You have taken all the correct enhanced due diligence steps.
  • You have assigned an accurate risk rating.
  • If a Suspicious Transaction Report needs to be filed to FINTRAC.


Definitions


Source of Funds: Refers to the origin of the particular funds used in the transaction. Down Payment and Income being the most highly considered. (e.g., salary, sale of an asset, inheritance, Gift or other identifiable transaction-specific funding). Documentation must be obtained and assessed for each application to ensure the legitimacy of monies used.

Source of Wealth: Refers to the origin of the individual’s total financial standing or net worth (e.g., career earnings,

accumulated investments, ownership interests, family wealth).