RUSI Institutional Proliferation Finance Risk Assessment Guide

The RUSI Institutional Proliferation Finance Risk Assessment Guide [guide] is designed to provide multi-jurisdictional support to the private sector in identifying activities that may be higher risk, determining the levels of risks the industry faces, and developing strategies to tackle such threats.

This guide is designed to provide multi-jurisdictional support to the private sector in identifying activities with higher risk, determining the levels of PF risks the industry faces, and developing strategies to tackle such threats.

With the private sector conducting institutional risk assessments (RAs), national authorities will obtain an increasingly comprehensive understanding of PF risk nationally.

Proliferation Finance [PF] RAs will help institutions better understand and define risk appetite while aligning with Combatting Proliferation Finance [CPF] laws and regulations.

The guide documents how FIs should understand the inherent PF risks they face through

• Their customers,
• Products and services,
• Jurisdictions operated in and with,
• Transactions,
• Delivery channels used, and
• Cyber threats.

It explains how FIs can assess the inherent risk of these categories by considering the likelihood of the risk materialising, alongside the impact of the event should it materialise.

Once the inherent risk is evaluated, the next step is to assess the institution's residual PF risks by evaluating the effectiveness of the controls an FI has in place to tackle inherent risks.

When the institution completes its PF RA, it can measure its residual risk and its vulnerability to PF risk. Institutions can then choose whether to accept this risk, mitigate further, or try to prevent such vulnerabilities and exposures to PF risk.

The guide explains that RAs should be a dynamic exercise and that FIs need to identify emerging and/or future PF vulnerabilities.

Furthermore, the RA should follow a risk-based approach that provides institutions with flexibility with CPF efforts.

https://static.rusi.org/proliferation-finance-risk-assessment-special-resource.pdf