Risk Assessment Template

Preferred method: Please convert your organisation’s existing country financial crime risk rating on the scale of 1 (low) to 3 (high).

Alternative method: Please refer to the Corruption Perceptions Index and convert the country score (as opposed to country rank) using the following scale:

75-100 → 1 (low risk).
41-74 → 2 (medium risk).
1-40 → 3 (high risk).

Please assess which of the below applies:

(1) There are no credible reports of widespread illicit trade in the FTZ or the country.
(2) There are reports of widespread illicit trade in the FTZ concerned but their credibility is difficult to ascertain or there are credible reports of widespread illicit trade in the country concerned but not in the FTZ specifically.
(3) There are credible reports of widespread illicit trade in the FTZ.

- FATF’s Mutual Evaluation Reviews;
- US State Department’s International Narcotics Control Strategy Reports;
- NGO reports.

Please assess which of the below applies to the country where the FTZ is located:

(1) Is neither a sanctioned country, nor in geographic proximity to a sanctioned country, nor are there credible reports of widespread sanctions evasion through that country.
(2) There are credible reports of widespread sanctions evasion through the country. However, it is itself not a sanctioned country, nor in geographic proximity to a sanctioned country.
(3) Is either a sanctioned country or there are credible reports of widespread sanctions evasion through the country and it is in geographic proximity to a sanctioned country.

For the purposes of this risk factor, a country is sanctioned if the country or significant sectors of its economy is sanctioned by the UN or multiple other foreign countries.

Please assess which of the below applies:

(1) Goods coming into the FTZ are scrutinised as carefully as elsewhere in the country’s territory and the country’s customs controls are reasonably effective.
(2) Goods are either not scrutinised as effectively as elsewhere in the country or there is reputable criticism of the country’s customs capacity.
(3) Effective customs controls are absent.

Please rate the extent to which tax residents in the FTZ benefit from lesser taxation compared to the rest of the country’s territory:

(1) No reduced taxation.
(2) Minor tax incentives.
(3) Significant differences in taxation to the rest of the country territory.

- FTZs’ websites;
- Trade or other ministries’ websites;
- NGO reports.

Please rate the extent and nature of manufacturing and processing in the FTZ:

(1) No to limited manufacturing or processing of goods.
(2) Manufacturing or processing of goods takes place but does not involve goods that are often counterfeited or high-value goods.
(3)  Widespread manufacturing or processing of goods that are often counterfeited or high-value goods.

- FTZs’ websites;
- Trade or other ministries’ websites;
- NGO reports.

Assumed 3 (high) as the absence of information implies all activities are allowed.

Please rate the extent of transhipment activities in the FTZ:

(1) Little significant transhipment activity.
(2) The FTZ is a regional transhipment hub.
(3) The FTZ is an international transhipment hub.

- FTZs’ websites;
- Trade or other ministries’ websites;
- NGO reports.

Please rate which of the below best characterises physical security arrangements in the FTZs:

(1) FTZ physically secure with effective controls on entry and exit.
(2) FTZ delineated and secured but there are credible reports of goods going in and out illegally.
(3) FTZ not delineated and/or physically secured e.g. with a fence.

- FTZs’ websites;
- Customs agencies’ websites;
- Trade or other ministries’ websites;
- US State Department’s International Narcotics Control Strategy Reports;
- NGO reports.

Please rate the arrangements for independent monitoring of the FTZ administrator’s crime prevention and security efforts:

(1) There is a formal and regular process for review of the FTZ’s security.
(2) Such a process is supposed to be in place but no information about its outcomes is available.
(3) Such a process is not in place.

- FTZs’ websites;
- Customs agencies’ websites;
- Trade or other ministries’ websites.

Please rate which of the below best characterises the due diligence that new users undergo to operate in the FTZ:

(1) Users subject to due diligence to rule out links to known criminals.
(2) Users subject to due diligence but it does not check links to known criminals or is only superficial.
(3) Users not subject to due diligence or one can sub-rent space in an FTZ without it.

- FTZs’ websites;
- Customs agencies’ websites;
- Trade or other ministries’ websites;
- US State Department’s International Narcotics Control Strategy Reports;
- NGO reports.

Assumed 3 (high) as the absence of effective due diligence is widespread among FTZs.

Please rate which of the below best characterises the publication of law enforcement statistics related to the FTZ, including on arrests and seizures of goods:

(1) Regular and comprehensive enforcement statistics are published.
(2) Enforcement statistics are published on an ad hoc basis or are perfunctory.
(3) No enforcement statistics are published.

- FTZs’ websites;
- Customs agencies’ websites.

Please rate which of the below best characterises the AML/CTF regime in the FTZ:

(1) Low risk, e.g. the same as in the host country that is low risk.
(2) Medium risk, e.g. the host country is low risk but the FTZ has a discrete regime.
(3) High risk, e.g. the host country is high risk and there are no mitigation measures in the FTZ.

- FATF’s Mutual Evaluation Reviews;
- NGO reports;
- Basel AML Index by the Basel Institute on Governance.

Please rate which of the below best characterises beneficial ownership transparency in the FTZ:

(1) The information on beneficial owners of companies and other similar legal arrangements (trusts, partnerships etc) created in the FTZ is publicly available.
(2) Beneficial ownership information is not publicly available but is verified and made available to competent authorities, including domestic and foreign law enforcement agencies.
(3) Beneficial ownership information is not publicly available nor verified, or such information is not made available to competent authorities.
 

If the FTZ’s incorporation regime is the same as in the rest of the country, please make this assessment based on the country’s incorporation regime.

- FATF’s Mutual Evaluation Reviews;
- NGO reports.