Implementing Effective Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) Measures

The Financial Action Task Force (FATF) Recommendations provide a framework for countries to prevent and mitigate money laundering, terrorist financing, and proliferation financing risks. Here are the key points related to implementing these measures:

Risk-Based Approach

Countries should take a proactive approach in identifying, assessing, and understanding the risks associated with money laundering, terrorist financing, and proliferation financing. This involves:

• Identifying and assessing the risks of these activities
• Understanding the underlying factors that contribute to these risks
• Applying a risk-based approach to ensure that measures are commensurate with the identified risks

National Cooperation and Coordination

Effective AML/CFT/CPF policies require national cooperation and coordination. Countries should:

• Establish clear national AML/CFT/CPF policies informed by identified risks
• Designate an authority or establish a coordination mechanism responsible for these policies
• Regularly review and update these policies to ensure they remain effective

Requirements for Financial Institutions and DNFBPs

Financial institutions and designated non-financial businesses and professions (DNFBPs) play a critical role in preventing and mitigating money laundering, terrorist financing, and proliferation financing risks. They should:

• Identify, assess, and take effective action to mitigate their associated risks
• Implement risk-based measures commensurate with the identified risks

Additional Requirements

Countries are also required to:

• Identify, assess, and understand proliferation financing risks
• Take commensurate action aimed at ensuring these risks are mitigated effectively
• Require financial institutions and DNFBPs to identify, assess, and take effective action to mitigate their associated risks