Simon Prescott
Plenitude Insights
AML/CTF/CPFAs regulations strive to match the pace of the threat of proliferation financing, so will enforcement. There is a continual need for regulated firms to prioritise their understanding of various risk types and take appropriate steps to mitigate those risks.
The consideration of proliferation financing (PF) risk exposure is not readily apparent in the risk and control frameworks of many regulated firms. However, in the past 5 years, several PF related guidance documents have been published which highlight this specific risk exposure and have thus driven the introduction of specific regulatory requirements.
Conclusion
With all UK regulated firms now required to identify, assess, and mitigate their related risk exposure, proliferation financing has never been more important to fully understand.
While many regulated firms will be able to fully and accurately identify their PF risk exposure, not all will. By conducting a thorough and considered assessment of each of the risk factors that have been set out in the Money Laundering Regulations, entities will be able to demonstrate, to both internal and external stakeholders (including regulators and where relevant external auditors), that the appropriate risk identification steps have been taken.
