23. The restrictive measures exposure assessment should enable the financial institutions to …

The restrictive measures exposure assessment should enable the financial institutions to iden-tify and assess:

• a. which restrictive measures regimes apply to them;
• b. the likelihood of non-implementation of restrictive measures;
• c. the likelihood of circumvention of restrictive measures;
• d. the impact of any breaches of restrictive measures; and
• e. the following risk factors:
• a) geographic risk, including:
• i. where the financial institution conducts its business, i.e. the jurisdictions and territories in which the financial institution is established or operates;
• ii. the extent to which those jurisdictions and territories are exposed to restric-tive measures or are known to be used to circumvent restrictive measures;
• iii. origin and destination of transactions.
• b) customer risk, including:
• i. links of customers and, if applicable, their beneficial owners and controlling shareholders, to countries for which restrictive measures are in place due to a situation affecting this country, or known to be used to circumvent restrictive measures;
• ii. the number of customers, type of customers and the complexity of those customers, such as the issues with identification of the beneficial owner;
• iii. activity of its customer base, and complexity of the activity, including any links to industries or sectors that may be subject to economic or any other restric-tive measures, as well as frequency and types of transactions.
• c) products and services risk, including:
• i. the nature of the financial institution’s products and services;
• ii. the extent to which providing these products and services exposes the financial institution to the risk of breaches of restrictive measures and circumvention of restrictive measures.
• d) delivery channels risk, including whether the use of intermediaries, agents, third par-ties, correspondent banking relationships or other delivery channels creates vulnera-bilities, including by:
• i. limiting the visibility the financial institution has on the parties involved;
• ii. making the financial institution dependent on the screening processes of third parties;
• iii. increasing the financial institution’s exposure to geographic risks because they are operating, or based in, countries for which restrictive measures are in place due to a situation affecting this country or countries known to be used to circum-vent restrictive measures.

1. Overview

1.1 References

1.2 Identified Requirements

1.3 Related Standards

2. Identified Requirements

3. Related Standards

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