Guidance on Risk
There are a range of sources where guidance on money laundering (ML) and terrorist financing (TF) risk and applying a risk based approach to supervision and preventive measures can be accessed some of which is set out below.
The Financial Action Task Force (FATF) is the international standard setting body for combating money laundering, the financing of terrorism and proliferation of weapons of mass destruction. It publishes guidance that assists in the identification of money laundering and terrorist financing threats and vulnerabilities that assist supervisors, financial institutions and designated non-financial businesses and professions (DNFBPs) to adopt a risk based approach to supervision and applying preventative measures.
The European Supervisory Authorities (ESAs) are in the process of completing guidelines under the Fourth EU AML Directive on carrying out risk assessments and risk factors to be taken into consideration when applying simplified and enhanced customer due diligence. The European Commission is also due to publish a Supra-national risk assessment of the risk of ML and TF across the EU. Guidance from the ESAs and the Supranational Risk Assessment will be published on this website once finalized.
National Risk Assessment for Ireland - Money Laundering and Terrorist Financing
The Department of Finance and the Department of Justice and Equality have published Ireland's first Money Laundering and Terrorist Financing (ML/TF) National Risk Assessment (NRA).
The NRA is an assessment of the ML/TF threats in Ireland and the vulnerabilities of certain sectors to being used for ML/TF as a result of the products and/or services they offer, their customer base, the countries in which they operate and the delivery/distributions channels they utilize. As such, the NRA is an important source for financial institutions to support and inform their own ML/TF risk assessments.
Please see links below where the NRA can be accessed:
Department of Finance
Department of Justice
FATF Designated High Risk and Non-Cooperative Jurisdictions
It is important for supervisors and designated persons to be aware of high-risk and non-cooperative jurisdictions when applying a risk-based approach. The EU has identified high risk third countries with strategic AML/CFT deficiencies that are set out in Annex to the Commission Delegated Regulation supplementing the 4th EU AML Directive.
The Delegated Act is legally binding on member states and must be complied with by designated persons. Also, the FATF identifies jurisdictions with weak measures to combat money laundering and terrorist financing (AML/CFT) in two FATF public documents that are issued three times a year.
The FATF’s process to publicly list countries with weak AML/CFT regimes has proved effective. As of October 2016, the FATF has reviewed over 80 countries and publicly identified 60 of them. Of these 60 countries identified, 49 have since made the necessary reforms to address their AML/CFT weaknesses and have been removed from the process. The latest list of high-risk and un-cooperative jurisdictions is set out below:
This guidance will assist countries and their competent authorities, as well as the practitioners in the MTVS sector and in the banking sector that have or are considering MTVS providers as customers, to apply the risk-based approach to the development of measures to combat money laundering and terrorist financing for the MTVS sector.
This guidance is intended to assist countries in developing an effective supervisory and enforcement model.
This guidance assists in the design and implementation of this approach for the banking sector, taking into account national risk assessments and the national legal and regulatory framework.
This guidance describes how banks should include risks related to money laundering and financing of terrorism within their overall risk management framework.