BCB Group Risk Appetite Statement
Introduction
This Statement defines the BCB’s risk appetite, risk tolerance and strategy in the face of money-laundering, terrorist financing, sanctions and other related financial crimes risks.
The principles outlined in this statement apply to our direct B2C and B2B clients and indirectly to our ‘nested customers’ in turn on boarded by our clients.
Overview of Risk Appetite
BCB maintains a comprehensive ML/TF/Sanctions management framework, which emphasises the importance of regulatory standards, professionalism, maintaining high quality staff, and accountability to stakeholders. BCB’s risk appetite underpins both this framework and the firm’s ML/TF mitigation strategy.
Financial Crime Risk Appetite Statement
BCB has a low-risk tolerance for financial crime risk. To this end BCB has put in place the following mitigants and controls to prevent and detect BCB being used to facilitate financial crime:
- Financial Crime Business Wide Risk Assessment;
- Financial Crime Policies and Procedures;
- Client Due Diligence (CDD) procedures (including initial and ongoing screening);
- Transaction Monitoring (TM);
- AML/counter-terrorist financing (CTF) training for the Board and all employees.
BCB Group is committed to combating financial crime and continually strives to ensure that accounts held at our Firm are not misused for the purpose of ML/TF irrespective of product or origination. Our financial crime risk management controls are proportionate to the risks we face. In line with this. BCB will not:
- Knowingly facilitate criminal activities by clients, including but not limited to tax evasion, ML, TF or any other fraudulent or illegal activity.
- Accept any deliberate or systemic breaches of applicable laws and regulation.
- Facilitate transactions with entities or individuals that;
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- Cannot be identified in accordance with BCB’s KYB/KYC program and are unresponsive to information requested by BCB which is significant to their identification; or Intentionally provide misleading information to BCB which is significant to their identification or activities;
- are sanctioned or known to be associated with the financing of terrorism;
- are known and verified to be operating without required licensing and/or registration
- Operate any line of business or do business with any client segment in which the Board believes that its control environment cannot protect the Firm from risks that exceed its stated tolerance.
In addition, any high-risk clients (as determined by our client risk assessment methodology) must be approved by the MLRO prior to onboarding and subject to periodic reviews on an ongoing basis (existing clients). High-risk clients that do not receive approval from the MLRO must be either not onboarded, or offboarded immediately (existing clients) in accordance with the offboarding procedures.
High Risk Jurisdictions
In all instances BCB seeks to determine the provenance of all parties it enters into relationships with prior to commencement of the relationship. Where it is determined that i) a potential client, business partner or supplier is established or otherwise has a presence or ii)wishes to execute a transaction(s) with another party in a ‘high-risk’ third country BCB will in all instances conduct EDD.
Being “established in” a high-risk country means:
- Corporates – being incorporated in or having its principal place of business in that country, or, in the case of a financial institution or credit institution, having its principal regulatory authority in that country
- Individuals – being resident in that country, but not merely having been born in that country
High-risk countries are those with significant deficiencies in their money laundering countermeasures, and/or a significant level of systemic corruption.
BCB use multiple sources to identify and track those countries it deems ‘high risk’, taking specific reference to:
- Financial Action Task Force ( FATF) recommendations e.g Blacklist and Greylist)
- EU Commission recommendation
- OFAC
- UK Money Laundering and Terrorist Financing Regulations
- EU list of non-cooperative jurisdictions
BCB will also reference other sources when assessing country risk including Basel AML Index and the Corruption Perception Index.
Any matter with high-risk third country involvement must be reported to the MLRO immediately who will decide whether the client will be onboarded and if so, what additional EDD measures should be adopted.
The list set out below reflects those countries BCB treat as high risk for determining whether a given relationship will be prohibited or whether EDD is required prior to onboarding or facilitating transactions. Further additions or amendments to the list may arise depending on the risk appetite of our business partners.
BCB maintains a programme of ongoing monitoring to ensure the following list is maintained, changes to the list are made on an adhoc and monthly basis.
Prohibited Jurisdictions *
| Country | Rationale for Restriction (FATF, EU Prohibition, UK Prohibition, US Prohibition, BCB Risk Appetite) |
|---|---|
| Belarus | US, UK Sanctions |
| Burundi | UK Sanctions |
| Democratic People’s Republic of Korea (North korea) | FATF Blacklist |
| Democratic Republic of the Congo | FATF Greylist, UN Sanctions |
| Iran | FATF Blacklist |
| Iraq | UK Sanctions, BCB Risk Appetite |
| Lebanon | UN, UK Sanctions |
| Libya | UN, UK Sanctions |
| Mali | UN, UK Sanctions |
| Myanmar | FATF Blacklist, EU, UK |
| Russia | US, UK Sanctions |
| The Central African Republic | UK Sanctions, BCB Risk Appetite |
High Risk Jurisdictions
| Country | Rationale for Restriction (FATF, EU Prohibition, UK Prohibition, US Prohibition, BCB Risk Appetite) |
|---|---|
| Albania | FATF Greylist, UK |
| Afghanistan | EU, UK Sanctions |
| American Samoa | EU non coop |
| Anguilla | EU non coop |
| Bahamas | EU non coop |
| Bahrain | BCB Risk Appetite |
| Barbados | FATF Greylist, EU, UK |
| Bermuda | BCB Risk Appetite |
| Bolivia | BCB Risk Appetite |
| Bosnia and Herzegovina | UK Sanctions |
| British Virgin Islands | BCB Risk Appetite |
| Burinka Faso | FATF Greylist, EU, UK |
| Cambodia | FATF Greylist, EU, UK |
| Cameroon | BCB Risk Appetite |
| Cayman Islands | FATF Greylist, EU, UK |
| China | BCB Risk Appetite |
| Colombia | BCB Risk Appetite |
| Cuba | US Sanctions |
| Egypt | BCB Risk Appetite |
| Fiji | EU Non Cooperative |
| Gibraltar | UK, BCB Risk Appetite |
| Guam | EU Non Cooperative |
| Guernsey | BCB Risk Appetite |
| Guinea | UK Sanctions |
| Guinea-Bissau | UN Sanctions, UK Sanctions |
| Haiti | FATF Greylist, EU, UK |
| Isle of Man | BCB Risk Appetite |
| Jamaica | FATF Greylist, EU, UK |
| Jersey | BCB Risk Appetite |
| Jordan | FATF Greylist, EU, UK |
| Liechtenstein | BCB Risk Appetite |
| Macau | BCB Risk Appetite |
| Madagascar | BCB Risk Appetite |
| Mali | FATF Greylist, EU, UK |
| Mexico | BCB Risk Appetite |
| Monaco | BCB Risk Appetite |
| Morocco | FATF Greylist, EU, UK |
| Mozambique | FATF Greylist, UK |
| Nicaragua | EU, UK Sanctions |
| Nigeria | BCB Risk Appetite |
| Pakistan | EU, BCB Risk Appetite |
| Palau | EU Non Cooperative |
| Panama | FATF Greylist, EU, UK, EU non coop |
| Rwanda | BCB Risk Appetite |
| Samoa | EU Non Cooperative |
| Senegal | FATF Greylist, EU, UK |
| Somalia | UN, UK Sanctions |
| South Sudan | FATF Greylist, EU, UK |
| Sudan | BCB Risk Appetite |
| Syria | FATF Greylist, EU, UK, US |
| Tanzania | FATF Greylist, UK |
| The Philippines | FATF Greylist, EU, UK |
| Trinidad and Tobago | EU Restriction, EU non coop |
| Turkey | FATF Greylist, UK |
| Turks and Caicos Islands | EU Non Cooperative |
| Uganda | FATF Greylist, EU, UK |
| Ukraine | BCB Risk Appetite |
| United Arab Emirates | FATF Greylist,, UK |
| US Virgin Islands | EU Non Cooperative |
| Vanuatu | EU Restrictions, EU non coop |
| Venezuela | US, UK Sanctions |
| Vietnam | BCB Risk Appetite |
| Yemen | FATF Greylist, EU, UK, Sanctions |
| Zimbabwe | EU Restriction |
Prohibited Client Business Activities
Whilst BCB’s client base is focused on those entities active within the digital asset and crypto currency space we recognise that our clients may have use cases which involve them being active in other sectors. BCB also recognises that some industries carry a greater inherent ML/TF risk than others. As such BCB applies further restrictions and prohibitions depending on the industry in which clients operate.
BCB will not enter into business relationships with entities or individuals actively involved in or with strong connections to the following sectors;
- Adult industry
- Gambling
- Arms/weapon dealing
- Illegal drugs and substances designed to mimic illegal drugs
- Counterfeit goods
- Conducting a business without the correct licences/jurisdictional approvals in place
- Multi level marketing/pyramid schemes
BCB will apply enhanced due diligence to any clients actively involved in or with strong connections to the following sectors:
- Mining and extraction of gold, precious metals and gemstones
- Luxury goods
- Pharmaceuticals
- Crypto Lending businesses
- Spread betting companies
All the restrictions above are communicated to BCB business partners at the inception of the relationship and on an ongoing basis in line with any further amendments/additions to these lists.