FATF Recommendation 1

Assessing Risks and Applying a Risk-Based Approach

Firstly, the FATF recommends that countries take a Fisk-eased Approach (FBA) to prevent and mitigate Money Laundering (ML), Terrorist Financing (TF) and Proliferation Financing (PF) risks through their AntiMoney Laundering (AML) and Countering the Financing of Terrorism (CFI) regime.

Essentially, this means that each country should:

  • Identify, assess and understand its ML, TF and PF risks, inclu ding throu gh coordi nation ofactions by approp riate authority or mechanism.
  • Ensure that measures and resource allocation are efficient and proportionate to mitigatethe assessed ML, TF and PF risks.

•In applying the RBAr where ML. TF and PF risks have been assessed as (1 )higher, ensure enhanced measures are adopted or (2) lower, simplified measures may be adopted, provided all obligations are adhered to.

  • Require Financial Institutions and Designated NonFina ncial Business Professionals to identify, assess and take effective measures to mitigate their respective ML, TF and PF risks.

The RBA is the core element for the effectiveness of the AML/CFT regime.

Leave a comment