Combating Money Laundering & Terrorism Financing

International Standards on Combating Money Laundering and the Financing of Terrorism & Proliferation

A. AML/CFT Policies and Coordination

1. Assessing Risks and Applying a Risk-Based Approach

Countries should identify, assess, and understand the money laundering and terrorist financing risks for the country. They should take action to mitigate these risks by designating an authority or mechanism to coordinate actions and apply resources effectively.

Risk Assessment: Countries should assess the money laundering and terrorist financing risks for their country.
Designated Authority: Countries should designate an authority or mechanism to coordinate actions and apply resources effectively.
Risk-Based Approach: Based on the assessment, countries should apply a risk-based approach (RBA) to ensure that measures to prevent or mitigate money laundering and terrorist financing are commensurate with the risks identified.

2. National Cooperation and Coordination

Countries should have national AML/CFT/CPF policies informed by the risks identified. They should designate an authority or have a coordination mechanism responsible for such policies.

National Policies: Countries should have national AML/CFT/CPF policies informed by the risks identified.
Designated Authority: Countries should designate an authority or have a coordination mechanism responsible for such policies.
Effective Mechanisms: Policy-makers, the financial intelligence unit (FIU), law enforcement authorities, supervisors, and other relevant competent authorities should have effective mechanisms in place to cooperate and coordinate with each other concerning the development and implementation of policies and activities to combat money laundering, terrorist financing, and the financing of proliferation of weapons of mass destruction.

3. Proliferation Financing Risks

Countries should identify, assess, and understand the proliferation financing risks for their country. They should take commensurate action aimed at ensuring that these risks are mitigated effectively.

Proliferation Financing Risk: In the context of Recommendation 1, “proliferation financing risk” refers strictly and only to the potential breach, non-implementation or evasion of the targeted financial sanctions obligations referred to in Recommendation 7.
Designated Authority: Countries should designate an authority or mechanism to coordinate actions to assess risks and allocate resources efficiently for this purpose.

4. Requirements for Financial Institutions and DNFBPs

Countries should require financial institutions and designated non-financial businesses and professions (DNFBPs) to identify, assess, and take effective action to mitigate their money laundering, terrorist financing, and proliferation financing risks.

Requirements: Countries should require financial institutions and DNFBPs to identify, assess, and take effective action to mitigate their money laundering, terrorist financing, and proliferation financing risks.

International Standards on Combating Money Laundering and the Financing of Terrorism & Proliferation

The FATF Recommendations are included in this booklet together with the Republic of Nauru National Strategy for Anti-Money Laundering and Combatting the Financing of Terrorism 2022-2025 for the purposes of information to all stakeholders on the implementation of this Strategy.

Note: The original text is reproduced carefully to simply replicate the original copies issued by Financial Action Task Force. In case there is any inconsistency between this and the principal instrument, the principal instrument prevails.