All provisions · AML/CFT Act (Cap. 251) · Part Vi: Preventive measures
32 Obligation to identify and assess money laundering and terrorist financing risks
(1) Every reporting entity shall take measures to identify, assess, understand and monitor its risks of money laundering and terrorist financing activities and take appropriate measures to mitigate the risks identified.
(2) The reporting entity shall, in identifying and assessing such risks, take into account—
(a) the profile of its customers;
(b) the geographic area in which it conducts business;
(c) the product or products that it deals in;
(d) the service or services that it provides or receives;
(e) the means by which such products or services are delivered;
(f) the transactions that it conducts;
(g) customer due diligence carried out by third parties; and
(h) the technological developments in identifying such risks.
(3) In assessing the risks referred to in subsection (1), the reporting entity shall also take into account the outcome of any risk assessment carried out at national level and any regulatory guidance issued by the FIU or a supervisory authority.
(4) Prior to the launch of a new product or business practice or the use of a new or developing technology, the reporting entity shall identify and assess the money laundering and terrorist financing risks that may arise in relation to the development and use of new products or business practices, or new or developing technologies for both new and pre-existing products, and take appropriate measures to manage and mitigate those risks.
(5) Every reporting entity shall document the outcome of the risk assessment, regularly update it, and shall submit the same to the appropriate supervisory authority and law enforcement agency upon request.
(6) A reporting entity which fails or neglects to take reasonable measures to identify, assess and monitor the risks of money laundering and terrorist financing activities, commits an offence, and is liable on conviction, to a fine not exceeding SCR400,000. (Amended by Act 62 of 2021)
Obligations to establish and maintain internal control systems and procedures
(2) The reporting entity shall, in identifying and assessing such risks, take into account—
(a) the profile of its customers;
(b) the geographic area in which it conducts business;
(c) the product or products that it deals in;
(d) the service or services that it provides or receives;
(e) the means by which such products or services are delivered;
(f) the transactions that it conducts;
(g) customer due diligence carried out by third parties; and
(h) the technological developments in identifying such risks.
(3) In assessing the risks referred to in subsection (1), the reporting entity shall also take into account the outcome of any risk assessment carried out at national level and any regulatory guidance issued by the FIU or a supervisory authority.
(4) Prior to the launch of a new product or business practice or the use of a new or developing technology, the reporting entity shall identify and assess the money laundering and terrorist financing risks that may arise in relation to the development and use of new products or business practices, or new or developing technologies for both new and pre-existing products, and take appropriate measures to manage and mitigate those risks.
(5) Every reporting entity shall document the outcome of the risk assessment, regularly update it, and shall submit the same to the appropriate supervisory authority and law enforcement agency upon request.
(6) A reporting entity which fails or neglects to take reasonable measures to identify, assess and monitor the risks of money laundering and terrorist financing activities, commits an offence, and is liable on conviction, to a fine not exceeding SCR400,000. (Amended by Act 62 of 2021)
Obligations to establish and maintain internal control systems and procedures
Official source: Anti-Money Laundering and Countering the Financing of Terrorism Act (Cap. 251), Act 5 of 2020, Revised Edition as at 17 January 2025 (Acts 5 of 2020, 7 of 2021, 8 of 2021, 62 of 2021, 9 of 2022, 12 of 2024, S.I. 145 of 2020)
