This Guidance on the Risk-Based Approach to combating Money Laundering and Terrorist Financing was developed by the FATF in close consultation with representatives of the trust and company service providers industries. The Guidance supports the development of a common understanding of what the risk-based approach involves, outlines the high-level principles involved in applying the risk-based approach, and indicates good public and private sector practice in the design and implementation of an effective risk-based approach
The purpose of this guidance is to:
Support the development of a common understanding of what the risk-based approach involves.
Outline the high-level principles involved in applying the risk-based approach.
Indicate good practice in the design and implementation of an effective risk-based approach.
However it should be noted that applying a risk-based approach is not mandatory. Countries will need to make their own determinations on whether to apply a risk-based approach, based on their specific ML/FT risks, size and nature of the designated non-financial businesses and professions (DNFBPs) activities, and other relevant information. The issue of timing is also relevant for countries that may have applied anti-money laundering/combating the financing of terrorism (AML/CFT) measures to DNFBPs, but where it is uncertain whether the DNFBPs have sufficient experience to implement and apply an effective risk-based approach.
Target audience, status and content of the guidance
This guidance has been prepared for, and in relation to, accountants in public practice. This refers to sole practitioners, partners or employed professionals within professional firms. It is not meant to refer to "internal" professionals that are employees of other types of businesses, nor to professionals working for government agencies, who may already be subject to measures that would combat money laundering.
The roles and therefore risks of the different DNFBP sectors are usually separate. However, in some business areas, there are inter-relationships between different DNFBP sectors, and between the DNFBPs and financial institutions. For example, accountants may be instructed by businesses or professionals within other DNFBP sectors or by financial institutions. Accountants may also undertake trust and company services covered by the FATF Recommendations. For such activities, accountants should make reference to the guidance on the risk-based approach for Trust and Company Service Providers (TCSPs).