Source of Wealth (SoW)

A source of wealth assessment gives an indication of the customer's wealth and a picture of how it was acquired. The source of wealth assessment is generally framed as part of the enhanced due diligence measures some entities should carry out in cases of increased money-laundering risk. Clients may determine that a SoW assessment is required according to a risk-based approach that takes into account their specific circumstances.

Establishing the source of wealth is part of the Enhanced Due Diligence measures applicable for Customers from high-risk countries and PEPs, since this business relationship may indicate a higher than normal money laundering or terrorist financing risk. This requirement derives from FATF Guidance on Politically Exposed Persons (Recommendations 12 and 22).

As mentioned in the High-risk Countries Screening section, the European Union’s Anti-Money Laundering Directive states the requirement that EU Member States shall perform enhanced due diligence with respect to business relationships and transactions involving high-risk third countries, which may include the Source of Wealth.