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Costanzo, Paolo --- "The risk-based approach to anti-money laundering and counter-terrorist financing in international and EU standards: what it is, what it entails" [2013] ELECD 931; in Unger, Brigitte; van der Linde, Daan (eds), "Research Handbook on Money Laundering" (Edward Elgar Publishing, 2013) 349

Book Title: Research Handbook on Money Laundering

Editor(s): Unger, Brigitte; van der Linde, Daan

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9780857933997

Section: Chapter 26

Section Title: The risk-based approach to anti-money laundering and counter-terrorist financing in international and EU standards: what it is, what it entails

Author(s): Costanzo, Paolo

Number of pages: 19

Abstract/Description:

The ‘rule-based’ and the ‘risk-based’ are two approaches to the implementation of Anti-Money Laundering and Counter-Financing of Terrorism (AML/CFT) systems. They affect areas like the scope of AML/CFT legislation (for example, in relation to the identification of obliged entities and of the measures they should apply), the type and intensity of the preventive measures (this is typically the case for customer due diligence (CDD) obligations), and the extent and nature of controls performed by competent authorities. It is important to stress, on the other hand, that other components of the AML/CFT system like, for example the criminalization of money laundering and terrorist financing and the obligation to report suspicious transactions or confiscation measures are not risk-sensitive and therefore do not in principle vary depending on whether a risk-or rule-based approach has been followed.