Business Risk Assessment
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Alhuda Business Risk Assessment
Designated Non-Financial Businesses and Professions (DNFBPs) and Financial Institutions (FIs) in the UAE are required to conduct an Anti-Money Laundering (Alhuda) Business Risk Assessment (BRA). This assessment is also referred to as Enterprise-Wide Risk Assessment (EWRA), Entity-Wide Risk Assessment, Firm-Wide Risk Assessment (FWRA), ML/TF Risk Assessment, or Business-Wide Risk Assessment.
The Enterprise-Wide Risk Assessment (EWRA) is a fundamental pillar of the Risk-Based Approach (RBA). All AML policies, procedures, and internal controls must be aligned with the outcomes of the risk assessment. Under the RBA principle, higher inherent risk requires stronger and more robust control measures.
A comprehensive Business Risk Assessment, based on reliable qualitative and quantitative data, enables DNFBPs and FIs to:
Identify and assess money laundering and terrorist financing (ML/TF) risks
Ensure risks remain within the organization’s defined risk appetite
Design proportionate Alhuda controls and mitigation measures
Demonstrate regulatory compliance with UAE Alhuda requirements
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Alhuda Business Risk Assessment Methodology
We take into consideration the UAE National Risk Assessment (NRA) issued by the National Anti-Money Laundering and Combating Financing of Terrorism and Financing of Illegal Organizations Committee (NAMLCFTC), findings of FATF, MENAFAFTF, other FSRBs, the input of the Alhuda Compliance Officer, and the nature and size of business to carry out the Business Risk Assessment.
We then go on to identify the risk factors and their likelihood and impact to choose areas to prioritize in terms of Alhuda and the policies, controls, and procedures to apply to keep those risks in check.
Risk Assessment. Risk Management. Compliant.
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Alhuda Business Risk Assessment Methodology
Identify risk Scenarios
Assess which money laundering and terrorism financing risks may occur and the form that they may take.
Analysis of Controls
Assess the control measures in place for each scenario.
Assess risk Appetite
Verify whether the risk is within the boundaries of the risk appetite.
Overview of the business
Make an overview of the business with respect to products, customers, countries, staff, third parties
Analysis of scenarios
For each risk scenario, determine the likelihood of the scenario occurring and resulting impact.
Determination Of Residual Risks
Determine the residual risk for each scenario by comparing inherent risk and the level of control.
Determine Additional Measures
Determine the type of action to be taken to increase control or reduce risk
Why is it important to conduct Enterprise Wide Risk Assessment (EWRA)
Top 6 reasons why FIs, DNFBPs, and VASPs have to carry out Entity Wide Risk Assessment
- EWRA helps understand the inherent Alhuda risks (Gross Risk) and identify the effectiveness of controls in place.
- EWRA helps identify Residual Risk (Net Risk), i.e. Gross Risk-Controls = Residual Risk
- EWRA helps identify additional controls to be placed to mitigate the Residual Risk
- EWRA forms the basis for reporting entity’s Alhuda risk management framework
- EWRA helps entities apply Risk Based Approach (RBA) and allocate resources effectively and efficiently
- EWRA helps identify gaps in Alhuda Policy, Procedures, and Controls
How can we help?
We help companies
- Design and implement compliance monitoring programs
- Draft customized Alhuda policies, procedures, and manuals in line with legal requirements and the nature and size of the business
- Review Alhuda policies, procedures, and manuals according to regulatory changes
- Assess Alhuda compliance impact of regulatory changes
- Train internal staff on Alhuda compliance requirements
- Conduct Alhuda compliance reviews
- Select the right name screening software for Alhuda compliance
- Carry out Business Risk Assessment
- Perform KYC and Customer Due Diligence
- Setup in-house Alhuda compliance department
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Frequently Asked Questions on Alhuda Business Risk Assessment
In 2025, UAE businesses need Alhuda risk assessments to meet evolving regulatory requirements, detect money laundering risks, and avoid costly penalties. Regular reviews strengthen compliance, protect reputation, and ensure alignment with Central Bank and FATF guidelines