Risk and Guidance

It is important for supervisors and designated persons to be aware of risk factors when conducting its risk assessment and to apply an effective risk-based approach. Risk factors can fall under categories including customer, products/services, geography and channels/distribution.

There is a range of sources where guidance on Money Laundering (ML) and Terrorist Financing (TF) risk and applying a risk based approach to supervision and preventive measures can be accessed, some of which is set out below.

Central Bank of Ireland Anti-Money Laundering and Countering the Financing of Terrorism Guidelines for the Financial Sector

The Central Bank of Ireland published Anti-Money Laundering and Countering the Financing of Terrorism Guidelines for the Financial Sector ("the Guidelines") on 6 September 2019. The Guidelines set out the expectations of the Central Bank in respect of credit and financial institutions compliance with their AML/CFT obligations as set out in the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 (the CJA 2010), following the transposition of the EU's Fourth Anti-Money Laundering Directive (4AMLD) into Irish Law. The Guidelines also incorporate expectations set out in previous Central Bank AML/CFT Sectoral Reports, AML/CFT Bulletins, and relevant European Supervisory Authority Guidelines.

Anti-Money Laundering and Countering the Financing of Terrorism Guidelines for the Financial Sector | pdf 1340 KB

National Money Laundering and Terrorist Financing Risk Assessment

The Department of Finance and the Department of Justice and Equality have published Ireland's first Money Laundering and Terrorist Financing (ML/TF) National Risk Assessment (NRA).

The NRA is an assessment of the ML/TF threats in Ireland and the vulnerabilities of certain sectors to being used for ML/TF as a result of the products and/or services they offer, their customer base, the countries in which they operate and the delivery/distributions channels they utilize. As such, the NRA is an important source for financial institutions to support and inform their own ML/TF risk assessments.

Please see links below to the respective Department of Finance and Department of Justice website where the NRA can be accessed from:

Department of Finance

Department of Justice

European Guidance on Money Laundering and Terrorist Financing Risk

ESAs

The European Supervisory Authorities (ESAs) are mandated under the Fourth EU AML Directive to publish guidance on risk factors. ESA's Risk Factor Guidelines (the ESA's Guidelines) were published on the Joint Committee's webpage in all Member State languages on the 4 January 2018. The purpose of the ESA's Guidelines is to assist firms when carrying out risk assessments and the risk factors to be taken into consideration when applying simplified and enhanced customer due diligence.

Firms need to comply with the Guidelines by 26 June 2018.

European Commission Supra National Risk Assessment Report (SNRA)

The European Commission has published a Supra-national risk assessment of the risk of ML and TF across the EU that can be accessed at European Commission Supranational Risk Assessment

High Risk Third Countries

The European Union has identified high-risk third countries with strategic AML/CFT deficiencies that are set out in Annex to the Commission Delegated Regulation supplementing the 4AMLD.

The Delegated Act is legally binding on member states and must be complied with by designated persons.

FATF Guidance

The Financial Action Task Force (FATF) is the international standard setting body for combating money laundering, the financing of terrorism and proliferation of weapons of mass destruction. It publishes guidance that assists in the identification of money laundering and terrorist financing threats and vulnerabilities that assist supervisors, financial institutions and designated non-financial businesses and professions (DNFBPs) to adopt a risk based approach to supervision and applying preventative measures.

The FATF identifies jurisdictions with weak measures to combat ML/TF in two FATF public documents that are issued three times a year. The latest list of high-risk and un-cooperative jurisdictions can be found at:

FATF High Risk Jurisdictions

Improving Global AML/CFT Compliance - Ongoing Process

The FATF also publishes guidance on adopting a risk-based approach.

Risk-Based Approach for the Life Assurance Sector (2018)

Risk-Based Approach for the Securities Sector (2018) 

Guidance for a Risk-Based Approach for Money or Value Transfer Services (2016)

This guidance will assist countries and their competent authorities, as well as the practitioners in the MTVS sector and in the banking sector that have or are considering MTVS providers as customers, to apply the risk-based approach to the development of measures to combat money laundering and terrorist financing for the MTVS sector.

Guidance for a risk-based approach: effective supervision and enforcement by AML/CFT supervisors of the financial sector and law enforcement (2015)

This guidance is intended to assist countries in developing an effective supervisory and enforcement model.

Risk-Based Approach for the Banking Sector (2014)

This guidance assists in the design and implementation of this approach for the banking sector, taking into account national risk assessments and the national legal and regulatory framework.

Basel Committee

Risk management guidelines related to anti-money laundering and terrorist financing issued by the Basel Committee 

This guidance describes how banks should include risks related to money laundering and financing of terrorism within their overall risk management framework.