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World Bank proposes the establishment of an international research centre on AML risk assessment

In newly published research, researchers from the World Bank stated that the ideas and emphasis of National Risk Assessments (NRAs) should be "made clearer and universally applicable."

The World Bank Group (WBG) researchers Joras Ferwerda and Peter Reuter's evaluations are the main topic of the 45-page report National Assessments of Money Laundering Risks: Learning from the NRAs of Eight Advanced Countries.


To "maximise the possibility of countries learning from each other," National Risk Assessments should be made clearer, according to the researchers, who also urged for the creation of a "international research centre focused on money laundering risk assessment."


"Trying a new and different NRA approach should be welcomed, and possible failures of such methods should be accepted beforehand. A lack of transparency about research methods and data used, however, is not acceptable if countries are to eventually want to learn what works and what does not,"  according to the document.

According to the researchers, these suggestions are "relatively low-hanging fruit that can be readily implemented."


The WBG representatives emphasized that in order to effectively protect a jurisdiction against criminal abuse and contribute to the global fight against financial crime, a "robust assessment and understanding of the risks of money laundering and terrorist financing in a jurisdiction are prerequisites."


The WBG investigations examined the standard of AML/CFT risk assessment by eight nations, almost ten years after FATF imposed standards for evaluations of money laundering and terrorism financial concerns through National Risk Assessments.


The study reveals that, with the exception of Japan, all nations contain an explicit threat assessment that complies with general FATF Guidance, while these nations carry out their threat assessments in a variety of methods.


It was discovered that certain nations, including Canada, had classified some people as dangers while other nations had classified some crimes as threats.


According to the study, only the UK's NRA makes specific reference to vulnerability, while other nations' NRAs are "less explicit," with the Japanese NRA "barely mention[ing] either vulnerability or inherent risk."

By fLEXI tEAM

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