What is the primary action a financial institution should take before formulating its anti-money laundering program?

Question

Options

• AIt should perform a comprehensive risk analysis
• BIt should determine how extensive and well-trained the compliance staff is
• CIt should consult with its correspondent banks to determine the nature and extent of their AML
• DIt should ensure that its training modules for all employees cover all relevant AML issues

• A
  71% (25)
• B
  17% (6)
• C
  3% (1)
• D
  9% (3)

Explanation

A comprehensive risk analysis is the first and most important step in developing an effective anti- money laundering program. A risk analysis helps a financial institution identify and assess its exposure to money laundering and terrorist financing risks, based on its products, services, customers, geographic locations, and other factors. A risk analysis also enables a financial institution to tailor its policies, procedures, controls, and training to mitigate the specific risks it faces. A risk analysis should be conducted periodically and updated as necessary to reflect changes in the institution's risk profile.

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