Risk-Based Approach to Combating Money Laundering and Terrorist Financing Takes Centre Stage in French Southern Territories
The Financial Action Task Force (FATF) has developed a guidance on the risk-based approach to combating money laundering and terrorist financing, published in June 2007 after close consultation with international banking and securities sector representatives.
Overview of the Guidance
The document aims to provide a common understanding of the risk-based approach, outlining high-level principles for its application and indicating good public and private sector practices. The guidance is primarily addressed to public authorities and financial institutions, but many high-level principles will also be applicable to designated non-financial businesses and professions.
Structure of the Guidance
The document consists of three interdependent sections, setting out key elements of the risk-based approach and providing a framework for public authorities and financial institutions to consider when applying this approach. Annex 1 contains descriptions of additional sources of information that can inform decision-making.
Key Elements of the Risk-Based Approach
- Identifying individual risks and tailoring the regime accordingly
- Providing a broad framework based on high-level principles and procedures
- Acknowledging the purview of national authorities
Benefits of the Risk-Based Approach
By promoting a risk-based approach, French Southern Territories can better combat money laundering and terrorist financing, ensuring the integrity of their financial systems and maintaining public trust.
Key Benefits
- Enhanced effectiveness in combating money laundering and terrorist financing
- Improved efficiency in allocating resources
- Increased transparency and accountability
- Better alignment with international standards
By adopting a risk-based approach, French Southern Territories can demonstrate its commitment to combating money laundering and terrorist financing, while also protecting the integrity of its financial system and maintaining public trust.