The Wolfsberg Group has published a statement setting out how financial institutions can assess risk in defined priority areas and demonstrate their anti-money laundering and counter financing of terrorism (AML/CFT) programme effectiveness.
The Wolfsberg Group Statement on Demonstrating Effectiveness document builds on previous effectiveness statements by the association of thirteen global banks that aims to develop frameworks and guidance for the management of financial crime risks.
Priority risk areas
The group says it believes that designing, assessing, and measuring AML/CTF programmes based on performance against defined outcomes not only enables financial institutions to detect and deter criminal activity better, but also improves the effectiveness of the system to combat money laundering and terrorist financing overall.
The statements underline that the starting point for an effective AML/CFT programme should be an understanding of the priority risks identified by countries or supranational bodies in their own assessments of AML/CTF risks and the applicability of those risks to the financial institution.
Measures of effectiveness
The group says it believes that a financial institution’s effectiveness related to designated priorities or the AML/CFT programme overall should be measured based on its compliance with law and regulations and how it is designed to provide highly useful information to government authorities in defined priority areas.
It should also be measured by how the financial institution builds and maintains a reasonable and risk-based set of controls to mitigate the risks of the institution being used to facilitate illicit activity.
The group says it remains committed to further dialogue with policymakers, supervisors, law enforcement agencies and other stakeholders on effectiveness in AML/CFT in order to achieve the shared goal of fostering the increased effectiveness of the global financial crime risk management framework.
The Wolfsberg Group Statement on Demonstrating Effectiveness can be found here.
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