Money Laundering National Risk Assessment Guidance

Regulation Name: Money Laundering National Risk Assessment Guidance

Publishing Date: 08 November 2024

Region: Global

Agencies: Financial Action Task Force

On November 08, 2024, The Financial Action Task Force (FATF) released a guidance on Money Laundering National Risk Assessment. This guidance explains how understanding and managing risk is essential for a country’s effective risk-based approach, requiring ongoing evaluation of new information and environmental changes. Conducting a National Risk Assessment (NRA) helps systematically assess money laundering threats and vulnerabilities, enabling policymakers to tailor Anti Money Laundering (AML) strategies based on risk levels. This guidance draws on insights from over 90 FATF Global Network countries and 500 public consultation responses to support effective NRA development.

A thorough understanding of risk is essential for any country adopting a risk-based approach, particularly in the ongoing battle against money laundering (ML). Developing an accurate, up-to-date risk understanding is a dynamic process, requiring countries to respond to evolving environmental factors, continuously evaluate new information, and anticipate emerging risks. Given the complexities involved, it’s crucial that countries employ a structured, coherent approach to build a comprehensive risk assessment.

A widely adopted strategy is conducting a National Risk Assessment (NRA), which enables countries to systematically evaluate and address ML threats and vulnerabilities. This evidence-based process allows policymakers to tailor Anti-Money Laundering (AML) strategies effectively, implementing enhanced mitigation measures for higher-risk areas while simplifying controls in lower-risk areas.

This guidance document supports countries in executing an effective NRA focused on assessing ML risks, drawing insights from over 90 countries within the FATF Global Network and feedback from over 500 public consultations. The document is organized into three key sections:

1. NRA Preparation and Setup: Outlines the foundations for a successful NRA, including political commitment, establishing an inclusive NRA mechanism, setting objectives, and acquiring necessary data and information.

2. Assessing and Understanding Money Laundering Risks: Provides a structured yet flexible methodology for analyzing threats, vulnerabilities, and risks, allowing countries to adopt a coherent approach suited to their unique capacities and risk contexts.

3. Post-NRA Actions: Recommends next steps, such as aligning mitigation measures with identified risks, effectively communicating findings, and refining the NRA process for continual improvement.

Overall, this guidance is a practical resource for countries striving to strengthen their AML/CFT systems, offering alignment with best practices across the FATF network and a pathway to a more resilient national approach to combating money laundering.

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