Financial Crime World

COMOROS: Implementing a Risk-Based Approach to Combat Money Laundering and Terrorist Financing

As part of its efforts to combat money laundering and terrorist financing, Comoros has been advised to adopt a risk-based approach to ensure that measures to prevent or mitigate these illicit activities are commensurate with the identified risks. This approach is considered an essential foundation for efficient allocation of resources across the anti-money laundering and countering the financing of terrorism (AML/CFT) regime.

Identifying and Mitigating Risks

According to international standards, countries should identify, assess, and understand the money laundering and terrorist financing risks for their country, and take action to mitigate these risks effectively. Comoros has been urged to designate an authority or mechanism to:

  • Coordinate actions to assess risks
  • Apply resources aimed at ensuring the risks are mitigated effectively
  • Require financial institutions and designated non-financial businesses and professions (DNFBPs) to identify, assess, and take effective action to mitigate their money laundering and terrorist financing risks

Assessing Risks

Comoros has been advised to consider all relevant risk factors when assessing the level of overall risk and determining the appropriate level of mitigation. Financial institutions and DNFBPs operating in Comoros may differentiate the extent of measures depending on:

  • Type and level of risk for various risk factors, such as:
    • Customer acceptance
    • Ongoing monitoring

Effective Implementation

The country has been urged to ensure that financial institutions and DNFBPs are effectively implementing their obligations under the AML/CFT regime. Supervisors should:

  • Review the money laundering and terrorist financing risk profiles and risk assessments prepared by financial institutions and DNFBPs
  • Take the result of this review into consideration when carrying out their supervisory functions

Simplified Customer Due Diligence

In addition, Comoros has been advised to allow financial institutions and DNFBPs to apply simplified customer due diligence (CDD) measures in cases where a lower risk has been identified. However, any such exemptions should be:

  • Strictly limited
  • Justified
  • Relate only to specific types of financial institutions or activities that pose a low risk of money laundering and terrorist financing

Conclusion

Overall, Comoros is urged to adopt a robust risk-based approach to combat money laundering and terrorist financing, in line with international standards and best practices. This approach will help ensure the efficient allocation of resources across the AML/CFT regime and effectively mitigate the risks associated with these illicit activities.