Risk-Based Approach

The FATF has been urging countries to conduct a Risk Assessment of the NPO sector - here is what that means

The FATF is, more than ever before, pushing governments to conduct a National Risk Assessment on money laundering (ML) and terrorism financing (TF). It calls on countries to 'identify, assess and understand' the ML/TF risks they face, and states that countries should also designate 'an authority or mechanism to co-ordinate actions to assess risks'. The goal of the standard is to ensure that countries can mitigate their ML/TF risks effectively, and the risk assessment is clearly intended to serve as the basis for an application of the risk based approach, i.e., 'to ensure that measures … are commensurate with the risks identified'.

Principles of a Risk-Based Approach:

  • Evidence-based
  • Outreach to NPO sector
  • Proportionality 

Click here to see how you can engage in the Risk Assessment process.