Risk-Based Approach to AML/CFT in RÉUNION: A Key to Effective Implementation

Introduction

The risk-based approach is a cornerstone of the successful implementation of the Financial Action Task Force (FATF) Recommendations. It is essential for Réunion to effectively combat money laundering and terrorist financing by identifying, assessing, and understanding the risks posed by these threats.

Benefits of a Risk-Based Approach

• Flexibility in resource allocation: financial institutions, authorities, and countries can tailor their strategies to address specific risks.
• Efficient use of resources: focus efforts on higher-risk areas and apply simplified procedures where risks are lower.
• Avoidance of de-risking: no need for financial institutions to sever ties with entire regions or client segments.

Guidance from the FATF

The FATF provides guidance on designing and implementing a risk-based approach in Réunion’s banking sector, taking into account national risk assessments and the country’s legal and regulatory framework. This guidance will help establish a common understanding between supervisory authorities and financial institutions of the principles and practices underlying the risk-based approach.

Structure of the Guidance

The guidance is structured into three sections:

• Section 1: Key Elements - outlines the key elements of the risk-based approach.
• Section 2: Banking Supervisors - provides specific guidance for banking supervisors.
• Section 3: Financial Institutions - offers practical advice for financial institutions.

Case Studies and Examples

The FATF also publishes case studies and examples to illustrate how the various components of this approach can be applied in practice.

Contact Information

For further information on the risk-based approach and its implementation, journalists should contact the FATF Secretariat at:

+33 (0)1 45 24 90 90 or contact@fatf-gafi.org.