Risk-based approaches to AML / CFT – focus note 2

The risk-based approaches that are applied by countries and institutions are now shaped by the specifications set out in FATF Recommendation 1 and related interpretive note, which provide a platform for countries to develop regulatory and supervisory frameworks that allow flexibility to achieve financial integrity objectives while at the same time providing the room to address financial inclusion objectives.

The specification of standards and guidance relating to risk-based approaches has, perhaps to greater extent than in the past, brought the achievement of AML/CFT objectives into view. It is reasoned that there would be merit in unpacking this matter in that countries would, as a matter of course, be steered towards focusing on the effectiveness of AML/CFT requirements and the achievement of objectives, and, as a consequence, institutions would also be more AML/CFT output focused.