In Chapter 2.12, FATF 40 Recommendations and Chapter 10.3, Risk-Based Approach and MER Comparison, First Edition, Money Laundering – A Handbook for CDD Compliance enlightens the objective of Risk-Based Approach (“RBA”).
RBA is a concept adopted by the FATF and is a risk assessment approach. In plain language, FATF Recommendation 10, Customer Due Diligence (applying the same effect to FATF Recommendation 22) requires the Compliance Officer to take all possible steps, procedures and methods to assess and identify the customer and assess the transaction in accordance to the rules in FATF Recommendation 1, Assessing Risks & Applying a Risk-Based Approach. See Diagram 27, The RBA Diagram of the Money Laundering, First Edition, Money Laundering – A Handbook for CDD Compliance.
FATF applied the RBA principles to determine the degree of the risk of a FATF member country in response to money laundering and terrorist financing. The outcome of the risk assessment shown and disclosed in the Mutual Evaluation Report.
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Categories: UNODC, UNCAC, FATF, AML/CFT Compliance, Money Laundering, Risk Assessment