WorldBank Lessons Learned from the First Generation of Money Laundering and Terrorist Financing Risk Assessments

This report aims to guide the policy makers in World Bank client jurisdictions in continuously improving their assessments and understandings of money laundering and terrorist financing risks in their jurisdictions.

To this end, the report attempts to draw lessons mainly from;

1. Observations and experiences from more than 100 World Bank technical assistance projects that supported client jurisdictions’ National ML/TF Risk Assessments (NRAs); and
2. An analysis of feedback on NRAs in 146 mutual evaluations conducted by the Financial Action Task Force (FATF) and FATF-style regional.

Ex summary

1. Understanding and assessing risks related to the proceeds of crime, money laundering (ML), and terrorist financing (TF) and developing risk-based and effective measures to mitigate those risks are important for creating a stable and safe environment that enables economic
2. development and shared prosperity. Development efforts can be effective only on a stable foundation that is safe from erosion by corruption, organized crime, and other security risks.
3. This foundation is also essential to prevent the siphoning of valuable national resources in the form of illicit financial flows.
4. Considering the importance of financial integrity as an enabler of development and shared prosperity, the World Bank, over the past decade, has developed a National ML/TF Risk Assessment (NRA) Toolkit and has supported 114 client jurisdictions in their ML/TF risk assessments using this toolkit. Those technical assistance activities have taught many lessons, most of which were integrated into the World Bank’s existing guidance and technical assistance material.
5. This report brings together some lessons learned from the World Bank’s field experiences in supporting NRAs in a wide range of jurisdictions, with a perspective to guide World Bank client jurisdictions in undertaking more robust and in-depth risk assessments in the future. A more extensive understanding of risks is expected to lead to risk-based and more effective prevention and suppression measures against the proceeds of crime, money laundering, terrorist financing, and, subsequently, criminal and terrorist organizations reliant on these

The findings:

1. More than 90 percent of all jurisdictions received some sort of criticism about the depth and comprehensiveness of their understanding of ML/TF risks.
2. Approximately 90 percent of the jurisdictions face problems related to the implementation of a risk-based approach by non-financial businesses and professions.
3. Most developing economies are still in the infancy of their risk-based approaches to AML/CFT

The WorldBank Lessons Learned and findings highlight the need for expert guidance in designing and executing risk-based frameworks, including methodologies and strategies tailored to each country's unique risks.

Source

http://documents1.worldbank.org/curated/en/099052110042330899/pdf/IDU0c1b39c8c0bfd604cf608ad40de3e4e0e24b8.pdf