Transaction risk categorization
Methodology
The risk model created by PEPData was developed to be flexible, maintaining a degree of simplicity that allows it to be easily understood. It is composed by 3 distinct risk categories with the following thresholds (in points):
Low: [0 - 1]
Medium: [1 - 2[
High: 2+
Each transaction falls into the various risk categories, taking into account the following criteria:
Transaction Value
If the transaction value is between €20,000 and €50,000
Risk increases by 1 point.
If the transaction value exceeds €50,000
Risk increases by 2 points.
Type of Goods:
If the type of good is considered high risk
Risk increases by 2 points.
Existence of suspicion:
If you have a suspicion about the presented documentation or the transaction itself.
Increases the risk by 2 points.
Payment method:
Virtual asset:
If the payment was made in an unregulated virtual asset
Increases the risk by 1 point.
If the payment was made through an entity that is not registered to carry out activities with virtual assets
Increases the risk by 2 points.
Combination of Payment Method and Amount
Cash payments:
If the sum of payments in euros (€) made by individual entities is equal to or greater than 3.000€
Increases the risk by 2 points.
If the sum of payments in foreign currencies made by individual entities is equal to or greater than 10.000€, after the respective conversion has been made
Increase the risk by 2 points.
If the sum of payments made by collective entities is equal to or greater that 1.000€
Increases the risk by 2 points.
Regulated virtual assets:
Bitcoin (BTH);
Ethereum (ETH)
You can consult here the list of entities registered to carry out activities with virtual assets.
Note: our risk calculation algorithm is under constant development. If you have any proposal for improvement or specificity in your professional area, don't hesitate to contact us.
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