RISK MANAGEMENT VS ISSUE MANAGEMENT IN THE ANTI-MONEY LAUNDERING AND COUNTER TERRORIST-FINANCING (AML/CFT) CONTEXT

Abstract

This article aims to examine the Risk-based Approach (RBA) widely advocated in the standards of the Financial Action Task Force (FATF) in the implementation of policies and measures for the prevention and countering of money laundering money and the financing of terrorism (ML/TF). The article points out arguments why this approach could not be applied to all cases because, in specific situations, ML/TF should be considered as already occurring acts/issues and not only potential risks. The article's conclusions are based on the understanding that risks should be managed with different approaches than issues. Still, due to the FATF's requirements for unification in using RBA across all FATF standards, many countries have difficulty achieving high ratings on the relevant Immediate Outcomes 7 and 8, which should be treated as dealing with already emerging issues and not risks. The article offers an alternative reading in this direction and can serve many institutions engaged in preparing policies for the prevention and counteraction of ML/TF.