The first step in identifying the risks factors relevant to the Company, is to assess the inherent risk of ML/TF/PF to the Company. At minimum, this must be done with reference to:
Relevant legislation
Any Rules, Guidelines, Policies put in place by the regulator
Observations in National Risk Assessment and
Any other factors, included in the Company’s Policies and procedures
Inherent risk is defined in the joint Guidance Note on the Sound Management of Risk Related to Financial Crime in the Bahamas. In addition to the legal requirements and guidance above, Easyterms Ltd. may use additional material to assist with objectively identifying inherent risk identified in this framework, e.g.
FAFT recommendations
CFAFT Mutual evaluations
Information from independent sources may help to form the level of inherent risk, however, assessment of likelihood of outcome and impact may be more subjective.
After the identification of all risk factors, each is assessed, both for the likelihood/possibility of occurrence and impact on the business, should it occur. The resulting level of risk is compared to the Company’s appetite, as determined by the Board of Directors. Based on this comparison, risk may be:
Accepted as being in line with the board’s risk appetite
Rejected as exceeding the board’s risk appetite
Transferred via Insurance, or
Mitigated via the application of effective internal controls, to bring that risk in line with the board’s appetite.
The directors of Easyterms Ltd. determine the level of risk which Easyterms Ltd. will tolerate, and based on this determination, all inherent risk deemed too high for the Company’s risk appetite, will be reduced to an acceptable level, transferred to a third party or avoided. What is left after this process is residual risk; a level of risk, Easyterms Ltd. has determined as an acceptable part of doing business.
Each Individual or company engaging in services with Easyterms Ltd. must undergo risk rating, to determine the ML/TF/PF risk they bring to the Business. This risk profile, which will be reviewed and reassessed on an ongoing basis, determines the level of ongoing due diligence to which the client/customer will be subjected. Clients/Customers are rated on a risk sensitive basis and subject to the commensurate level of due diligence, in order to make the best use of the Company’s resources, focusing on greater attention to the high risk and less on the low risk relationships.
As factors of technology and legislation change, the Framework will be assessed and updated on an ongoing basis.