Maldives Takes a Step Forward in Combating Money Laundering and Terrorist Financing

The Government of Maldives has announced its intention to adopt a Risk-Based Approach in combating money laundering and terrorist financing, as endorsed by the Financial Action Task Force (FATF). This approach is a significant step forward in strengthening the country’s anti-money laundering and counter-terrorist financing measures.

What is the Risk-Based Approach?

The Guidance on the Risk-Based Approach to Combating Money Laundering and Terrorist Financing was published by FATF in June 2007. It provides a framework for public authorities and financial institutions to identify, assess, and mitigate risks associated with money laundering and terrorist financing.

Key Components of the Risk-Based Approach

• Collaboration: Public authorities and financial institutions must work together to identify high-risk areas and implement measures to prevent and detect suspicious transactions.
• Ongoing Monitoring and Evaluation: Measures must be effective, and ongoing monitoring and evaluation are necessary to ensure that they remain so.

Implementation Plan

The Maldivian government plans to:

1. Review existing regulations and guidelines in light of the new approach
2. Develop a comprehensive framework for regulating and supervising financial institutions
3. Implement guidelines for identifying high-risk customers and transactions, as well as procedures for reporting suspicious activity

Benefits of the Risk-Based Approach

• Better identification and mitigation of risks associated with money laundering and terrorist financing
• Improved regulatory framework to meet international standards and obligations