Each business has their own approach and differing mitigation tools and no two Business Risk Assessment templates will be the same. Of course there are some elements that we all need to consider under the new changes to the AML/CFT/CPF Handbook, but every business will also have their own unique considerations.
Personally my biggest business worry, is missing a fundamental change in regulation and legislation that could affect the licence of FCM limited.
Why? Because this has so many negative implications, fines, loss of earnings and for the business, but also for me personally As a Director of the business. These risks are big and real, and this is why I personally take them very seriously!
Jersey PLC has identified its own vulnerabilities by issuing various NRA’s, most recent is the update to Terrorist Financing. These risks have been identified by working parties made up of Regulators, Government agencies and industry and have been split into sector specific risks to assist identify the relevant factors.
As risk evolves, so must Jersey’s approach to mitigation tools and this is why there are new NRA’s being issued, such as the Legal Person & Legal Arrangements NRA. Interesting to note that Trusts remain the higher risk mainly due to the lack of data held.
At a recent seminar, the Government of Jersey issued some statistics around our regulatory risk and discussed how context is so important when reviewing them. For example, TCB have an average of 30% higher risks to Banking’s 4.9% high risks. It will be up to the Government and the JFSC to make sure this context is relayed clearly to MONEYVAL when they visit.
So, Jersey has identified its risks and has put in play many risk mitigation tools via laws, notices and regulation. However the passing of time from when the first NRA’s were issued allows Jersey, in some instances, the ability to benchmark and check that these remain robust. And, they and have used the skills of external parties like Royal United Services Institute to test that they remain fit for purpose.
It was good to hear that Government believe the controls in place for services such as TCB and Banking remain fit for purpose. My take away was that it’s the product risk that requires the most focus.
Funds are seeing the end of the old regimes such as Private Placement Funds so this section of the NRA will hold the most updates.
These changes are good triggers to stop take a breath and see if you need to revise your BRA, something that FCM complete on a regular basis. Things that financial services businesses need to now is:
If you feel your risk ethos aligns with FCM then please do get in touch.