Edited by Brigitte Unger and Daan van der Linde
Chapter 9: Conducting national money laundering or financing of terrorism risk assessment
How much risk is posed by the money laundering that occurs in certain countries, sectors and transaction types? This chapter summarizes the main components of a frame work that International Money Fund (Fund) staff is developing for conducting national ML or FT risk assessment (NRA). Although the FATF standard recognizes that it is appropriate in many contexts to apply a risk-based approach to AML/CFT, it has proved difficult to apply risk-management concepts to the AML/CFT field in a rigorous way. The undertaking is complicated by the fact that ML and FT processes are many faceted and –since they are often intentionally hidden from view – inherently difficult to document or quantify. Moreover, different stakeholders in the AML/CFT community see ML and FT risks from different perspectives: financial firms are concerned about legal, operational and reputational risk posed by their clients, products and services; financial regulators are concerned about the risk that regulated entities will be compromised by dealing (wittingly or unwittingly) with the proceeds of crime; law enforcement and security services are concerned about the risk that criminals and security threats will escape detection and enjoy the fruits of their illicit activity; national policymakers may be concerned about the consequences of any or all of the above.
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