Risk Assessment: Money Laundering & Terrorism Financing (Module 1)

This report analyzes the risks associated with money laundering and terrorism financing, focusing on risk assessment methodologies, vulnerabilities, and control measures. The report examines various risk assessment tools and typologies, including those outlined by AUSTRAC and Australian standards, to determine the vulnerability of financial products and services. It explores the vulnerabilities of online trade financing and offshore entities. The report also discusses the application of risk appetite, monitoring, and review procedures to adapt to changing risks. The report also provides detailed insight into the control of new products and services to identify and mitigate risks within the financial system. The report covers customer due diligence procedures and the importance of knowing clients to identify and mitigate ML/TF risks. The report also includes the vulnerabilities of businesses offering online trade financing and leasing products, as well as the vulnerabilities of offshore entities providing services to New Zealand customers.

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MONEY LAUNDERING AND TERRORISM TRAFICKING
Module Name
Assessment Title
Student Number
The Date

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MONEY LAUNDERING AND TERRORISM TRAFICKING
Task 1
Part 1
Question (a)
i. There are several risk assessment methodologies utilized under different
standards, to determine the vulnerability of financial products and facilities
offered by different institutions. The key business risk highlighted include data,
system and people capacity. Therefore, coming up with a risk plan, it is important
to access the vulnerabilities that data is exposed to and the points of weakness in
the system. For this risk plan, guidelines outlined by AUSTRAC and Australian
standards will be used to formulate the risk assessment methodology required for
the proposed acquisition (Bryans,2014, 441). The document used is the AS/NZS
4360:2004: Standards for risk management (Australian Standards). This
document combines the important aspects from Australian standards partisan to
ML/TF and regulations highlighted by AUSTRAC to produce a comprehensive
methodology for risk assessment and management (Bajada,2006, 12).The risk
categories as identified in ML/TF are four namely customer type ie PEPs,
designated services provided, methods by which delivers designated services and
foreign jurisdiction.
ii. To provide a comprehensive and efficient risk assessment framework, there are
various tools and AUTRAC topologies that will be used in the assessment

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methodology such as identification, assessment, treatment and monitoring and
review (Bryans, 2014, 441). The most relevant of the typologies and case studies
is from 2014.example is Case 6 – Accountant jailed for laundering money via
Hong Kong and New Zealand and Case 1 – Suspect used black market website
and digital currencies for drug trafficking 2014 AUSTRAC report. This report
highlights the Australian businesses that have been exploited for criminal
activities such as drug smuggling, tax evasion and even human trafficking.
a. Risk identification. As a reference from, Ferweda & Reuter
(2018), 7, this tool aims at determining the ML/TF risks that are
associated with the business and the products that it offers. Under
this tool, there are two types of risks that are taken into account,
namely: Business and regulatory risks. The business risk refers to
the main ML/TF risks associated with the business operations such
as :
 Product and services provided such as credit cards, private banking
and wealth management and retail banking.
 Customer types for example PEPs(Politically Exposed Persons),
natural persons (individuals) or Legal persons(personal representation created by
law)
 Countries of operation such as transactions to countries known to
have sanctions on trade or regarded as a source of narcotics or/ and reputable
criminal activity are considered high risk.

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 Methods of delivery for various services such as the online
services, emailing or third-party brokers.
Regulatory risks refer to risks that are as a result of not adhering to the AML/CTF act, which
is an Anti-Money Laundering and Counter-Terrorism Financing Act of
2006(Choo.2008,363). Such risks include failure to carry out customer verification
accurately, lack of an AML/CTF program in an institution or failure to submit AML/CFT
compliance reports.
b. Risk Assessment. This tool allows for the measure of the quantity
and effect of the risk to be stated. The assessment is done in two
measures: likelihood, which defines probability of the risk
occurring and impact, the damage that the risk would cause. A
product of the two measures provide a risk score or level which
can be low, medium , high or extreme depending on contributive
factors.
c. Risk Treatment. This tool allows for the identification and
enforcement of remedying measures to manage the risk that has
already being identified using previously mentioned tools. Such
measures could include introducing transactional limits or putting
in place processes to deal with high risk costumers or those that
choose to transact with high risk countries among other viable
strategies and policies.
d. Risk Monitoring and Review. This tool is used to keep track of the

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risk plan and how it is holding up in the face of changing products,
services and targets customers.
iii.
Industry typologies dictate in a lot of ways the manner in which an institution provides its
services (Freeman,2016, 25). Therefore, the level of risk between for example a retail bank and a
private bank will not be similar because they employ varied policies of engagement for their
customers, provide different services, probably operate in different jurisdictions and use varied
modes of transactions. Therefore, when it comes to using the risk assessment methodology to
produce risk plans for either of these institutions certain vulnerabilities will be high-risk for the
retail banks than the private banks and vice versa (Favarel 2011, 179). In the case of this
particular situation, BSL usually provides face to face transactions while FF uses their online
platform to sell their products. Therefore, a vulnerability such as anonymity will be more
prevalent for FF because online transactions do not demand much background or personal
information from the customer while for BSL the risk will be much less because the face to face
interaction lead to collection of customer information as well as the identification of the account
owner (Gardner, 2007, 337). Examples are Case 6 – Accountant jailed for laundering money
via Hong Kong and New Zealand and Case 1 – Suspect used black market website and digital
currencies for drug trafficking 2014 AUSTRAC report.
iv.
A company's risk appetite refers to a specific amount of risk that the company is
willing to endure as they target certain business goals, as referenced by Harvey, (2015).
In this case, BSL's risk appetite will help to provide the guidance in coming up with

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remedy strategies for the risks anticipated. Understanding the risk appetite of the
company will help determine the types of risk that the company is not willing to take, the
risks that will be treated on individual levels as well as the risks that will be delegated to
higher management (Hopton, D. 2016).
v.
In reviewing the ML/TF risk assessment, it is important to understand that risks change
over time due to increase or changes in products and customer types (Sadiq, &Governatori,
and,2009, 165). It is therefore important that a monitoring and review procedure of the risk
assessment methodology be developed to ensure that it can be adjusted accordingly in case it is
not working correctly. It is important that a system for keeping records is determined. Using the
records that are provided, analysis and review of the risk plan will be backed up with
performance data that can be used to adjust areas of weakness in the plan. It is important or the
top management to not that ML/TF risk mitigating cheque account is fact that a fully auditable
trail exists between the payer and the payeee.as a resolution there is no negotiation of each
cheque. ADIs are subject to AML/CTF customers, it has also been noted that the use of bank
accounts introduces illigal money in the currency circulation .
It is also very important to carry out internal audits of the company which allow for the
company to provide AML/CTF compliance reports (Hamin, Kamaruddin and Rosil, 2018, 3)
Question (b).
i.
Vulnerabilities of running a business that offers online trade financing and leasing
products include (Tahiri, 2018):

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 It is possible to operate from different jurisdictions and make value
movement to a third party.
 It is possible to aggregate value due to the complex currency exchange
transactions that usually occur multiple times hence value transfer is kept untraceable and
the anonymity of the criminal is concealed.
 Setting up accounts and transactions can be done without face to face
contact.
 Due to the voluminous flow of goods and transactions, it is not easy to
isolate individual criminal transactions and therefore granting opportunity to criminal to
transfer value.
 Limited resources and verification programs exchange between custom
offices in countries make it difficult to detect value transfer over multiple jurisdictions.
ii.
Vulnerabilities of running an off-shore entity/branch that provides products and services
to New Zealand Customers (Spink, 2017, 642)
 Bank secrecy that ae very rigid and therefore do not allow thorough
investigations of suspicious transactions by relevant financial institutions.
 The ability to maintain anonymity during the setting up and transacting of
accounts due to the inadequate information required to set up accounts.
 The product allows for transfer of value from owner to beneficiary without
the requirement of identity disclosure.
 The jurisdiction is considered as a moderate tax-haven hence there is
minimal background information needed, this type of transactions make it difficult for the

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authorities to track criminal transactions.
 There is a deficiency in the effectiveness of inter-border intelligence
which makes it difficult to create patterns between criminal transactions that are
connected but conducted in different jurisdictions.
The BSL risk profile suggests acquiring a company that offers online trade financing and
leasing products and also to run an offshore branch to provide its services to an expanded
customer base in New Zealand. Both these strategies increase the company's risk (King, C. 2018,
15-31)). The main source of risk comes from the online platform that allows for full anonymity
of the company's clients in this region. The strategies also offer the option of offering services
over various jurisdiction, which limits monitoring efforts, as well as enabling criminal to mask
their activity in normal transactions among other customer (Mahnken, Weiss, Graboske, and
Whelan, 2004.904). The acquisition involves increase in the product and service selection as
BSL seeks to reach Australians in remote areas. This means the criminals have a source of entry
for their value into the financial system and also have various products that can assist in
disguising their transactions. The company need to improve its control to combat these and other
risks (Loayza,Villa, & Misas, 2017).
Task 2.
Question a (i)
When coming up with the required control for the new product the following assumptions
were made about the model for BSL prior to the acquisition of FF. The leasing benefactor paid

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monthly payments to the leasing company upon receiving item on lease. The company also
makes a transaction to the supplier company to pay for the item. Therefore, the model is a
traditional one with the leasing beneficiary in this case being the payer of the leasing fee; the
receiving remitter is the agent/ operator at the company (Ryder, 2012). There is also a transaction
between a sending remitter from the BSL to the supplier who is also a beneficiary of the
transaction (Ryder, N.2015). In its current state, the controls that are in the system will not be
able to handle the online product without some adjustment (Malama,.2010). The controls in this
model are extremely vulnerable to risk associated with online transactions. As it is now, the
model is already high risk in as far as ML/TF is concerned.
The basic role of customer due diligence procedures is to guarantee the revealing element
knows its clients and comprehends their clients' money related exercises. The announcing
substance must set up a structure and report its client due constancy (CDD) methods in detail.
All AML/CTF programs (standard, joint and uncommon) must incorporate Part B. An
announcing element must be sensibly fulfilled that: an individual client is who they guarantee to
be for a non-singular client, the client exists and their advantageous proprietorship points of
interest are known.
By knowing its clients, an announcing element ought to be better ready to recognize and
alleviate ML/TF hazards in the lead of their budgetary exchanges, especially where the action or
exchanges are abnormal or strange. The CDD necessities include: gathering and confirming
client distinguishing proof data. Example instance, records, information or other data acquired
from a dependable and autonomous source recognizing and confirming the useful owner(s) of a
client recognizing, whether a client is a PEP (or a partner of a PEP) and finding a way to build up
the wellspring of assets utilized amid the business relationship or exchange getting data on the

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reason and proposed nature of the business relationship.
The basic role of Part A of an AML/CTF program is to recognize, relieve and deal with
the ML/TF chance emerging from the arrangement of an assigned administration by a detailing
element. Components of Part A likewise educate the risks based methodology that is connected
in Part B (customer identification).
( ii & iii)
The stakeholders that are best suited to assist in the determination of deficiencies in the
controls and probable solutions are the project manager and the project team (Parker, 2018, 454)
these are people who are in control of the business for example in positions that are vital for
decision making. The project manager is in charge of the daily operation of any company about
any new project implementation or maintenance of older projects The project manager and the
project team managers play a vital role in influencing the decisions made by the business. It ,
therefore, calls for their involvement in a vital decision such as determination of deficiencies in
controls and any solution to be availed. It is more of their department and therefore directly
affects them.
With some adjustments, the controls in the previous models can be used (Iken,
&Agudelo, 2017, 255-266). The highest risk vulnerability is the transaction from the payer to
the company. Therefore, adjusting the control for the payer will improve aspects of user
identification and even location will go a long way reducing the vulnerability risk. The
transaction from the company to the supplier is also vulnerable but the risk is not as high
(Ross,& Hannan, 2007, 109). It is also of importance to evaluate account holders information
online verify the user details and habits as this pose potential risks. The main risk from this side

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would be that the company is running on criminal activity and uses the cash from the leasing
company to clean up their money as they acquire product to lease.
iv.
The Know Your Customer (KYC) control is the first and most important control that
ought to be developed (Madinger, 2016). It will help to reduce risk on both ends of the
transaction. The KYC control would comprise of customer acceptance policy, customer
identification and transaction monitoring. With this control ,the biggest vulnerability for online
bank transfers and payments which is anonymity is removed and transactions can now be
accredited to specific individuals. This assumption is based on either lack of a KYC control in
BSL or an ill performing one that necessitates an upgrade to avoid vulnerabilities. The next
control would be the access control, more specifically logical access control. This control will
limit the network (Ross, & Hanna,,2007, 110) system files and data that both suppliers and
consumers can access on BLS online and therefore allow users to leave a digital footprint. This
type of control also reduces the possibility of untraceable transaction, bank transfers and
payments because all transaction take place on one network.
The final control included would be a clearing control (Ryder,2015). This control will
work effectively for transaction, bank transfers and payments made online from credit cards or
bank account because it allows for verifying of user information and completion of the
transaction will the ability to keep record of all transactions made. The order of priority will be
as the controls have been stated above. The first control that should incorporated is the KYC,
followed by the access control and finally the clearing control. The last two can be installed once
the product has ‘gone live’ since they work when the system is up and running.

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v. (transcript of video in (iv.) above.
Question b (i)
The main objective of the KYC control is to be able to acquire potential client
information and using the vetting processes lined up to determine whether the customer is a
vulnerability factor to the company or not. The design will entail prompting first time users to
log in, which entails user identification and verification. The information required at this point is
personal and unique to all individuals (Teffera, Sadagopan,& Nunes-Vaz,,2004., 164) Once the
individual is logged in, the next stage through a series of question will determine the individual’s
source of wealth, perform sanction screenings and a risk scoring. If the individual is deemed high
risk, further due diligence with be required from a manager but a low risk individual with be
accepted into the system and allowed to start transacting. A high-risk individual who is still high
risk after due diligence will be denied membership (Kilcullen, 2005, 609). This is a perfect
systems that will go on to identify Politically Exposed Persons (PEPs) and help the company to
either avoid such people because they draw a high level of attention to themselves or look for a
way in which to manage such people. PEP’s are ranked as high risk factors for money launders;
the launders do not necessarily look for this type of customer but rather look for what such
people possess which include high value accounts that are valuable to any money laundering
business. PEPs can also be corrupt and or have poor history with lending and credit facilities.
Use of such a system as this that verifies customers and allows access and or enrollment to
customers that are approved is a long way in ensuring the taming of money laundering at
registration or intake of customers.
(ii,iii & iv)

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The stakeholders chosen and or identified for consultation and or for involvement in the
decisions such as company deficiencies are very vital as early on mentioned. These stakeholders
stand as engineers for the day to day functioning of the business. In other words, they are the
arms and legs of the business and therefore play a vital role in ensuring that the small decisions
and or actions of the common laborer translate in meeting the objectives of the business however
minute they might seem. Stakeholders such as the project manager would assist to come up with
an efficient and accurate design for the vetting process in order to ensure that no criminal
transactions slip by. The project manager is at the heart of the running of the business and is
responsible for all the decisions made. He or she offers advice and gives instructions and
directions on what and what should not be done. They handle the project team daily and are
responsible for recruits and continuing team members. Therefore, they will come in handy in
offering such advice as to an accurate system to vet transactions. Also because of their day to day
experience with the business and such transactions as early on stated they have more wisdom on
matters to do with suspected criminal activity. The project team will also assist with technical
skills such as coding . The project team is the driver of the agenda and or the daily business of
the firm. They not only offer their skills and knowledge but also insight and advice on some
matters such as the direction the company is taking and what to be done and what not to be done.
They can influence certain aspects of control for the firm. They can also offer their experiences
from which the management can be influenced to make the right choices to minimize risks. The
project teams are also responsible for the active registering and or counter-checking of new
members to the firm, if they remain vigilant and trustworthy to the business then they can
contribute immensely to the fight against criminals propagated by money launders. The
functional aspects will provide information on the control that they feel has not been explored as

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they are the individuals working on it during working hours. The senior financial control
manager, is the senior most official in the financial department. His role is to be in charge of
monitoring the controls, as he will play an important role in monitoring transaction, accurately
reporting and protecting the company from fraud.
The Senior Controller assumes an administrative job in regulating the exercises and
productivity of the lesser controller. In this position he likewise approves every money related
control and strategies inside the business, guaranteeing the sufficient upkeep of appropriate
arrangements and techniques in the regions of fund, bookkeeping, and duty with the end goal to
keep up reasonable interior controls that prompt finish, exact, and opportune monetary detailing.
The Senior Controller additionally oversees reviews of the business by working intimately with
outer examining firms at all phases to guarantee precision in announcing.
The Senior Controller moreover readies the business' yearly spending plan in his
administrative job and supervises budgetary reports from bookkeeping groups with the end goal
to affirm exact audits of the business' current and anticipated monetary position, consequently,
guaranteeing honesty of data.
For this particular control, monitoring and assessment would involve analysis of records
and therefore generation of performance report. The control would also be subject to review
every year to ensure that it is updated to deal with diversification in products of consumer type.
Record analysis involve transaction audit to verify the organization trades and tax reports. In
addition, it will be necessary to check the organizations books to evaluate if the strategy is taking
effect. Compliance assessments AUSTRAC has distinguished four key zones where detailing
substances can enhance their AML/CTF results: ML/TF risk assessments applying the risk-based

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way to deal with AML/CTF re-appropriated and robotized forms administration issues. It is
pivotal that all announcing substances keep up thorough AML/CTF frameworks and controls.
Announcing substances are welcome to consider the issues brought up in this report and
guarantee their AML/CTF program is exceptional and shielding them from abuse.
The ML/TF risk appraisal is the foundation of an agreeable AML/CTF program.
Understanding the ML/TF risks it might confront is an essential initial step for an announcing
element in creating; actualizing and keeping up systems that moderate and deal with those risks.
Revealing substances with proper ML/TF risk assessments exhibited that they comprehended:
how their items and administrations could be abused by offenders to launder cash or reserve fear
mongering how likely it is that every item or administration could be abused.
Question c.
The design for the online leasing system for the product is basically a combination of all
the controls and modules, such as the Know Your Customer (KYC) and transitional module,
only that they cover a wider scope now because customers from both Australia and New Zealand
are included (Oneil,.2007, 485). The system design consists of the following parts:
I. The KYC control: as example this control is to ensure that accounts can be traced
back to names, addresses and even location. This control is used for the vetting of
potential clients, it is the same control that allows a member to log back in. This
control at this point will have two interfaces for customers from each country to
ensure efficiency.
II. The next step is the transaction module (Ravenda, &Valencia-Silva, 2018). In this
module we have the access control, that ensure whenever a module that certain

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parameters are met. At this point the transaction is made from the payer to the
receiving remitter of the company. The control works to increase visibility and
therefore reduce the probability of masking criminal activity. Another instance of
transaction is from the sending remitter from the company to the supplier.
Transactions that are made using credit cards, debit cards, visas or bank
information go through the clearing control to ensure that the information
provided is correct. This aspect of the system reducing third-party transaction and
allows for comprehensive record keeping after every transaction.
Question d.
A trend in the financial services that is more relevant now than when it started is cybersecurity
(Frebowitz, 2018). It remains a huge concern for financial services those offered through the
internet or the banking systems. According to Gardner, (2007), as technologies and brands in
financial services online continue to grow, more gaps are left that expose financial products to
more risk. It therefore goes without saying that the technological world will be working to come
up with mitigating measure for any vulnerabilities exposed in development.
The involvement of tech in financial services as contributed greatly to the shortening of leases.
Many customers seem to prefer shorter more convenient leases that go well with their lifestyle
and businesses (Ferwerda and Reuter.2018, 13). This has lead the leasing retailers to respond to
the demand with a different model for their businesses.
The shorter leases are growing in demand and will continue to grow s individuals get into
entrepreneurship lifestyles (Copeland,.2015). This trend is therefore causing online leasing
institutions to come into the game with a brand new revenue model. One that accommodates the

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short term for leases.
Task 3
Part 3
a. The deficiencies in Cash4U’s current AML/CTF processes
 Money transfer programs such as the bespoke platform that are not face-to-face
and not linked directly with the company are also high risk money laundering avenues as listed
by AML/CTF programs. They pose as a high risk avenue for money launders and especially if
the transactions are only received by the business at the end of the week.
 The business has not reviewed either the risk assessment or the AML/CTF
program in the las three years. The AML/CTF program however states otherwise. It should be
reviewed regularly or at least once in every three years something that Cash4U has failed to do.
Adding to these facts, the review needs to be conducted by an independent party so as to avoid
biases. The business not having conducted this review has put itself under very high risk of not
being able to identify any abnormalities in their day to day running of the business. Money
launders are fond of taking advantage of such loopholes to infest their way into laundering
money from the business if review measures have been delayed such as in the case with Cash4U.
 Politically Exposed Persons PEPs are high risk as rated by AML/CTF programs.
The fact that the business solely trusts the response from customers on whether they are PEP or
not is a high risk action in itself. People could lie and put the business at a very high risk. PEP
are exposed to high opportunities of corruption and their accounts are targets by money launders

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due to their position and resources, they should therefore be under the watch and knowledge of
AML/CTF in any business failure to which they put the business at high risk.
 Rating countries of such as Fiji and Nauru as low risk without any back up or
rationale as to arrival of this decisions is very unlikely for the nosiness. The rationale used to
arrive at such critical decisions needs to be clearly outlined and available for the CO. This is
because this it can be false and could be an avenue for Money Laundering (ML) ,to utilize
because any person reviewing the transactions by the company, may not concentrate on these
countries since they do not raise an alarm as they are ranked low risk .Whoever in the real case,
it might be the opposite and these countries could be very high in money laundering activities.
b. i. Cash4U has put the business at risk in numerous ways. Some of the
vulnerabilities the business faces with regards to the guidelines of AML/CTF processes include
the following:
Among the vulnerability the business currently faces is failing to review the
AML/CTF program and or the risk management program as required by the guidelines. This
is a high risk move because malicious activities could be going on without the notice of the
management. Money is likely being laundered from the business. Reviewing the AML helps
a business identify and take precaution against money laundering because it offers a
guideline and shows the management indicators of likely hood of money laundering activities
(Malmendier, and Saidi, 2016, pp. 92-106).
Use of third parties for money transfer in receiver countries such as the bespoke
platform is a vulnerable factor for Cash4U. The business further takes one week to review
these transactions; this is a long time in matters dealing with money (King, 2018). It is
sufficient time to conduct money laundering. Such private entities according to AML/CTF

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possess high wealth and secrecy something that is very attractive for money launders.
Further, third parties disguise the identity of money launders hence providing a very high-
risk platform for conducting business.
ii. Approach to Address the Key deficiencies
Remedy Time required Cost
Regular review of the
AML/CTF and risk
management
Quarterly $150
Regular monitoring of
the (bespoke) third party
transactions in the receiver
countries, develop a cashless
system for money transfer for
example using internet
banking transfers only where
the payment flows are
transparent to the bank
involved hence they can report
suspicious cases (Li, et. al.,
2015, pp. 277-288).
Daily $10-$25
Put in place a system
that identifies customers status
Daily $50

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and remits their names for
PEP analysis
c. i. identification of passionate, competitive and integral shareholders iin the
business, customers and finance regulating bodies and bringing them on board to work with
should be given highest priority at any organization because these are people that will be stuck
with you in the business. The process of identification should follow that relevant and enough
knowledge about their personal and business history is available for example their connections
with corruption and other malicious scandals. The information about their previous business
transactions should also be available and trustworthy. Their competencies about delivering and
resourcefulness should also be prioritized.
ii. Developing a comprehensive stakeholder consultation program for instance
capacity building and skills development among the shareholders in the business, which
involves the incorporation of all the stakeholder views, complaints and complements to
be undertaken annually b via online feedback platforms or via email and suggestions
boxes laid at the company office premises. This would include a detailed approach that
incorporates their individual views, their feelings about the program and or business and
their suggestions on the business activities and how they are run.
iii. Stakeholders are people with direct or indirect interest in the business. They
should be given priority when it is matters dealing with the business. A clear engagement
plan should be put in place including a face to face meeting with the stakeholders which
in this case could be for example at least quarterly. However such meetings will not be

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sufficient to address urgent matters and complaints or compliments. It therefore calls for
providence of feedback systems for instance through the business website and or social
media handles where customers are able to send their views by commenting and or
sending email to the business management. The customers’ views are then evaluated by a
team set a aside for such a duty as evaluation and communicated to the management who
then make a decision on such matters as raised by the customers.
iv To ensure the effectiveness of the controls, regular checkup and consistent storage
of data is important (Masciandaro, 2017). An independent contractor that is certified and
has experience in the monitoring and evaluation of controls and data storage should be
contracted to undertake the monitoring and assessment. In this way, it is not the
implementation body that is tasked with monitoring and evaluation of its work but rather
an independent body to avoid compromise. It is also important to schedule regular
maintenance of the controls to allow for upgrades if it is not effective
d.
i. The company is already ailing from the troubles already outlined such as failure
to constantly review the risk management and failure to identify customer status
correctly. The company should: Regularly review of the AML/CTF and risk
management quartile but this is not enough, it’s should be done all the time
through means such as constant customer feedback, put in place a system that
identifies customers status and remits their names for PEP analysis and identify
passionate and willing customers to work with. The suggested strategies will help
reduce vulnerability to money laundering and allow the company to increase

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revenue flow. The new strategies also allow for accountability and traceability of
transactions and items.
ii. To ensure a successful remediation, the following are the talk points ;
 First, bringing to the attention of the shareholders the
problems/deficiencies that we have as a company and the effects or risk
that it has and will expose our products to in the future (O'neil, 2007).
 Second would be to table the strategies that are available to remedy the
deficiencies at Cash4U.
 Engaging the stakeholders and allowing them to volunteer their opinions
on the matter in an aim of fostering a sense ownership.
 Coming up with a plan together on how to implement and remedy the
deficiencies in Cash4U.
iii. One of cash4U key controls is the KYC procedures that collect first and last
name, residential address and birth date from new clients. The information from
the new clients is verified and inspected by looking at the license and or passport
of the client. Therefore the company should put in place a body that confirms if
any information captured by the KYC system has ever found a name that is in the
crime or corruption. More information about the new clienst other than just their
name and address should be included. Their history of engagement with other
money transfer and credit facilities should also be included in the information to
be verified. The client should further be thoroughly monitored by cash4U for a
period not less than the first six months

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References.
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