These types of outreach are useful in the following: ●● Outlining the legal and regulatory framework across a sector; ●● Clarifying the interpretation of the requirements of the AML/CFT laws and regulations and explaining how to implement them in practice; ●● Sensitizing institutions in assessing and mitigating ML/TF risks and in designing and implementing AML/CFT controls; and ●● Raising awareness of risks and new legal requirements related to AML/CFT. It is also a good practice to publish the main characteristics of the supervisory framework, including the design and method of off-site and on-site supervision and the method of implementation of enforcement actions.
EXAMPLES OF OFF-SITE AML/CFT SUPERVISION SYSTEMS AND PROCESSES IN SOME JURISDICTIONS Box 4.3 provides examples of off-site AML/CFT supervisory regimes from several jurisdictions.
BOX 4.3 Examples of Off-Site Anti-Money-Laundering and Combating the Financing of Terrorism (AML/CFT) Supervisory Frameworks Colombia. The Superintendencia Financiera de Colombia (SFC) has incorporated AML/ CFT supervision within its broader integrated supervision framework, which addresses both prudential and financial risks and AML/CFT risks (IMF and GFILAT 2018). The AML/CFT component of the framework is based largely on the risk management system for money laundering and terrorism financing (ML/TF), SARLAFT, which is the basic risk-based AML/ CFT regulation issued to supervised entities. The risk-based framework does not specifically address terrorism financing risk, and the results of the off-site risk analysis are used for planning on-site inspections. The current risk-profiling model is based on an assessment of inherent risks associated with clients (individuals and legal entities), products and services (as reported by financial institutions that have been scheduled for on-site inspections), economic sectors, and the geographic location of customers. In addition, the SFC assesses controls and compliance through a questionnaire completed by institutions scheduled for inspections. On-site inspections verify the adequacy of these controls. The questionnaire covers, among (box continues on next page)
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PREVENTING MONEY LAUNDERING AND TERRORIST FINANCING
