When should a review and update of the AML risk assessment be undertaken?

The timing of a review and update of the AML risk assessment is critical to ensuring that an organization remains compliant and effectively manages its money laundering risks. Conducting a review whenever a major risk event occurs reflects a proactive approach to risk management, as significant changes in the operational environment, regulatory landscape, or the organization’s activities can introduce new risks or alter existing ones.

Major risk events, such as changes in legislation, emerging trends in money laundering tactics, or incidents of financial crime involving the organization or its peers, can significantly impact the organization’s risk profile. Updating the risk assessment in response to these events ensures that the organization can adapt its controls and strategies to address any newly identified vulnerabilities.

This approach is more dynamic and responsive than more rigid timelines, such as a quarterly or annual review, which may not capture urgent changes in the risk landscape. Constantly optimizing the risk assessment in response to relevant events demonstrates a commitment to maintaining robust AML compliance and tailoring defenses to the current threat environment.