Once you have identified the ML/TF risks you expect to encounter in your business, these risks need to be assessed or measured in terms of a combination of:

• liklihood that these will occur
• impact of the consequence of loss or severity of damage that may result if these do occur.

Using scales of likelihood and impact within a risk matrix will allow you to combine the two separate measures to generate a matrix of risk scores.

Likelihood scale

A likelihood scale refers to the potential of a ML/TF risk occurring in your business for the particular risk being assessed. Three levels of risk liklihood are shown in the sample table below, but you can define as many levels of likelihood as you believe are necessary for your particular business.