Publication: National Assessments of Money Laundering Risks: Learning from Eight Advanced Countries’ NRAs
Date
2022
ISSN
Published
2022
Author(s)
Ferwerda, Joras
Reuter, Peter
Abstract
The Financial Action Task Force
(FATF) requires national governments to demonstrate an
understanding of the money laundering risks in the country.
Such an understanding is the foundation for effective
control of money laundering under the risk-based approach
the FATF calls for. The authors analyzed the National Risk
Assessments (NRAs) published by eight systemically important
countries to test whether they demonstrate that basic
understanding and to draw lessons for national governments
from those NRAs. The eight show very different
conceptualizations, analytic approaches, and products. Each
raises serious issues regarding the risk assessment
methodology. For example, most relied largely on expert
opinion, which they solicited in ways that are inconsistent
with the well-developed methodology for making use of expert
opinion. They misinterpreted data from suspicious activity
reports and failed to provide risk assessments relevant for
policy makers. Only one described the methodology employed.
Although the challenge of conducting strong risk assessments
is great, given the difficulty of estimating the extent of
money laundering in any sector, the findings based on this
limited sample point to ways to improve substantially on
existing practices. The report concludes with a set of
suggestions for (international) policy makers and those
conducting NRAs for improving risk assessments. Suggestions
include increased clarity about the conceptualization of
risk, transparency about data and methods so that each
country can learn from others, and the adoption of more
formal and standardized methods of eliciting expert opinion.
Link to Data Set
Citation
“Ferwerda, Joras; Reuter, Peter. 2022. National Assessments of Money Laundering Risks: Learning from Eight Advanced Countries’ NRAs. EQUITABLE GROWTH, FINANCE & INSTITUTIONS INSIGHT;. © World Bank, Washington, DC. http://hdl.handle.net/10986/37305 License: CC BY 3.0 IGO.”