Saint Pierre and Miquelon Adopts Risk-Based Approach to Combat Money Laundering and Terrorist Financing
The Financial Action Task Force (FATF) has developed a comprehensive guidance on the risk-based approach to combating money laundering and terrorist financing, in collaboration with international banking and securities sectors. The Guidance was published in June 2007.
Background
Since the adoption of revised FATF Recommendations in 2012, the FATF has been reviewing its set of risk-based approach guidance papers. In October 2014, the FATF adopted a separate guidance for the banking sector, while a distinct document is being developed for the securities sector.
Purpose and Scope
The Guidance aims to support the development of a common understanding of what the risk-based approach entails, outline high-level principles involved in applying it, and indicate good public and private sector practices in designing and implementing an effective risk-based approach. The Guidance is primarily addressed to public authorities and financial institutions, but its principles will also be applicable to designated non-financial businesses and professions.
Document Structure
The document is structured into three interdependent sections:
- Section 1: Introduction: Provides an overview of the risk-based approach and its importance in combating money laundering and terrorist financing.
- Section 2: Principles and Procedures: Outlines high-level principles involved in applying the risk-based approach, including identifying risks, assessing risks, and implementing measures to mitigate risks.
- Section 3: Good Practices: Indicates good public and private sector practices in designing and implementing an effective risk-based approach.
Autonomy of Countries
Each country and its national authorities are recognized as having the autonomy to identify the most suitable regime tailored to address individual country risks. Therefore, the Guidance does not provide a single model for the risk-based approach but instead offers a broad framework based on high-level principles and procedures that countries may consider when applying it.
Expected Outcomes
By adopting this risk-based approach, Saint Pierre and Miquelon aims to effectively combat money laundering and terrorist financing while ensuring efficient use of resources. The guidance is expected to support the country’s efforts in this regard and promote international cooperation in combating these threats.
Conclusion
The risk-based approach to combating money laundering and terrorist financing is a comprehensive framework that provides a common understanding of what it entails, outlines high-level principles involved in applying it, and indicates good public and private sector practices in designing and implementing an effective risk-based approach. By adopting this approach, Saint Pierre and Miquelon can ensure the efficient use of resources while effectively combating these threats.
Annex 1: Additional Sources of Information
Provides additional sources of information on the risk-based approach to combating money laundering and terrorist financing.