BOX 3.2 (continued) ●● Examination findings ●● Results of sample tests ●● Recommendations, possible corrective measures, expected timelines. PART V: FOLLOW-UP ●● Recommendations for enforcement and sanctions ●● Risk profile update: inherent risk, mitigation, and compliance ●● Process and timelines for follow-up. PART VI: STATISTICS ●● Ongoing collection of statistics on supervisory activities (for example, number of risk assessments conducted or updated; number of off-site and on-site reviews; number of recommendations or enforcement actions and results of follow-ups; and other useful statistics to serve as metrics of the effectiveness of supervisory interventions) ●● Analysis of statistics on supervisory activities and a feedback mechanism for findings to inform the supervisory process. Source: World Bank. Note: AML = anti-money-laundering. CFT = combating the financing of terrorism.
COOPERATION BETWEEN PRUDENTIAL AND AML/CFT SUPERVISION From the perspective of operational risk, AML/CFT is considered within the overall risk profile of a financial institution. Consequently, prudential and AML/CFT supervisors should coordinate their supervision efforts, especially when AML/CFT oversight is separated from the rest of prudential supervision.8 From the perspective of international standards, the Basel Core Principles include both prudential and AML/CFT elements, while the FATF standards also incorporate elements of these core principles. Several supervisory issues overlap between prudential and AML/CFT supervision, specifically in the areas of corporate governance, internal audit, and compliance. In particular, special attention should be paid to coordinating the supervision of compliance with due diligence obligations on beneficial ownership and politically exposed persons, including in the context of licensing and fit and proper assessment of shareholders and senior management of banks. Consequently, the risk assessments, supervision planning, and conduct of inspections should be coordinated with the prudential supervision departments to enable a holistic approach to supervision, but also to avoid duplication or gaps. Especially in jurisdictions where the prudential supervisor is not the same as the AML/CFT supervisor,9 additional efforts are needed to coordinate and collaborate on AML/CFT supervision. The following issues need to be addressed when the prudential and AML/CFT supervisors are not the same: CHAPTER 3: INTRODUCTION TO A RISK-BASED AML/CFT SUPERVISORY FRAMEWORK
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