Financial Crime World

Tokelau Implements Risk-Based Approach to Anti-Money Laundering Measures

The government of Tokelau has taken a significant step in strengthening its anti-money laundering (AML) and combating the financing of terrorism (CFT) controls by adopting a risk-based approach. This new measure aligns with international guidelines set by the Financial Action Task Force (FATF).

A Risk-Based Approach to AML/CFT

Under this approach, Tokelau’s financial institutions will be required to assess and understand the level of money laundering and terrorist financing risks they face. Based on these assessments, they will take proportionate measures to mitigate those risks.

Key Benefits

  • Effective risk management: By focusing on high-risk areas, financial institutions can prevent the consequences of de-risking behavior.
  • Streamlined procedures: Lower-risk activities will have more efficient procedures, reducing regulatory burdens.
  • Balanced regulation: The risk-based approach strikes a balance between effective AML/CFT controls and operational efficiency.

Guidance for Implementation

The Tokelau government has developed comprehensive guidelines to support the implementation of this approach. These guidelines take into account national risk assessments and the country’s legal framework, providing a common understanding among supervisory authorities and financial institutions.

Key Elements of the Guidance

  • Understanding the risk-based approach: The guidance provides a clear explanation of the key elements of the risk-based approach.
  • Specific guidance for banking supervisors: The guidelines offer detailed advice for banking supervisors to ensure effective implementation.
  • Common understanding among supervisory authorities and financial institutions: The guidance helps establish a shared understanding of the risk-based approach.

Next Steps

The adoption of a risk-based approach is an important step in strengthening AML/CFT controls in Tokelau. For further information on Tokelau’s AML/CFT measures, journalists can contact [Name] at the Tokelau Financial Intelligence Unit.