Risk-Based AML/CFT Regulations for Effective Supervision

Abstract

Money laundering is a global threat that requires an urgent attention of policymakers to protect financial systems from criminals. A jurisdiction is required to develop a regime to control or mitigate the impact of crimes that have multi-dimensional impacts on global economies. Prevention of global crimes is a challenge not only to jurisdiction but also to the global standard setters. The final impact of these crimes hit the financial system and other regulated institutions. Anti-money laundering/combating the financing of terrorism (AML/CFT) supervision is an emerging area; therefore, a sound regime of AML/CFT supervision is essential to support global initiatives in this regard. This chapter discusses the implementation of a sound risk-based AML/CFT supervision of financial institutions as well as designated non-finance business and professions. This is important for AML/CFT regulators to strengthen the AML/CFT regime of a country.