One of the key requirements of the FATF Recommendations is for countries, to identify, assess and understand the money laundering (ML) and terrorist financing (TF) risks that they are exposed to. Once these risks are properly understood, countries will be able to implement anti-money laundering and counter terrorist financing measures that mitigate these risks.
This approach, the risk-based approach, is central to the effective implementation of the FATF Standards and also applies to financial institutions and designated non-financial businesses and professions.
Many countries have chosen to publish information about the ML/TF risks to their financial system in the form of a national money laundering and terrorist financing risks assessment. The publication of such a national risk assessment is not a mandatory requirement of the FATF Standards. However, sharing this information will increase global understanding of ML/TF risk and may help countries identify, assess and understand where their own vulnerabilities lie.
Each country can determine how it will assess these risks. To assist countries in this process, the FATF has developed a guidance which explains the general principles and stages of a risk assessment. The practices described in the guidance serve as examples, and are not specific actions that a country must take.
Regardless of the approach a country has chosen to identify, assess and understand the risk to its financial system, the FATF will assess the extent to which it has been able to do so during its peer reviews. These reviews are based on the Methodology for assessing technical compliance with the FATF Recommendations and the Effectiveness of AML/CFT Systems and assessors will look closely at a country’s evaluation of its risks during the assessment of Recommendation 1 and Immediate Outcome 1.
The following are examples of published national and regional risk assessments:
National risk assessments
||Australia’s non-profit organisation sector: money laundering and terrorism financing risk assessment - 2017 Terrorism Financing in Australia - 2014
Money Laundering in Australia - 2011
|Austria||Nationale Risikoanalyse Österreich - 2015 [in German only]|
|National Money Laundering and Financing of Terrorism Risk Assessment - 2017|
|Isle of Man|
|Jersey||Money Laundering Typologies and Trends - 2015|
|Japan||National Risk Assessment of Money Laundering and Terrorist Financing - 2014 [tentative translation]|
|Singapore||Singapore National Money Laundering and Terrorist Financing Risk Assessment Report - 2013
Penningtvätt och anan penninghantering - 2015 (National Money Laundering Risk Assessment, in Swedish only)
Rapport sur l’évaluation nationale des risques de blanchiment d’argent et de financement du terrorisme en Suisse - 2015
|Tunisia||National Risk Assessment of Money Laundering and Terrorist Financing, Executive Summary - 2017|
|Ukraine||National Risk Assessment Report on Preventing and Countering Legalization (Laundering) of Proceeds of Crime and Financing of Terrorism - 2016|
|United Kingdom||UK National Risk Assessment of Money Laundering and Terrorist Financing – 2015
|Regional or supranational risk assessments|
Regional risk assessment 2016 South-East Asia / Australia - co-led by Australia and Indonesia, with contributions from Malaysia, the Philippines, Singapore and Thailand.
EU Supranational Risk Assessment Report - 26 June 2017
FATF conducts typologies studies which essentially represent ML/TF assessments of a narrower scope, such as on particular threats or vulnerabilities