The Financial Action Task Force (FATF) has published an updated version of its guidance on a risk-based approach for money or value transfer services (MVTS).

This non-binding Guidance is intended to assist countries and their competent authorities, as well as practitioners in the MTVS sector and in the banking sector that have or are considering MVTS providers as customers, to apply the risk-based approach associated to MVTS. The risk-based approach, the cornerstone of the FATF Standards, requires that measures to combat ML/TF are commensurate with the risks. Such measures should not necessarily result into the categorisation of all MVTS providers as inherently high-risk.

The purpose of this guidance is to:

  • support the development of a common understanding of what the RBA to AML/CFT entails for MVTS providers, banks and other financial institutions that maintain relationship with MVTS providers and competent authorities responsible for monitoring MVTS provider’s compliance with their AML/CFT obligations;
  • outline the key elements involved in applying a RBA to AML/CFT associated to MVTS;
  • highlight that financial institutions that have MVTS as customers should identify, assess and manage the ML/TF risk associated with individual MVTS, rather than avoid this category of customers;
  • assist countries, competent authorities and MVTS providers in the design and implementation of a RBA to AML/CFT by providing general guidelines and examples of current practice;
  • assist countries in the implementation of the FATF Recommendations with respect to MVTS, particularly Recommendations 14 and 26; and
  • support the effective implementation and supervision of national AML/CFT measures, by focusing on risks and on preventive and mitigating measures.

The guidance consists of four sections. Section 1 sets out the key elements of the RBA and needs to be read in conjunction with Sections 2 to 4, which provide specific Guidance to MVTS providers, to supervisors of MVTS providers on the effective implementation of a RBA and to banks that have MVTS providers as customers and supervisors of banks that have MVTS providers as customers.

While this Guidance is applicable to the entire MTVS sector (both banking and non-banking institutions offering MVTS); it is primarily intended for non-banking MVTS providers. This Guidance should be read in conjunction with other relevant Guidance, in particular FATF Guidance for a Risk-Based Approach: The Banking Sector.

View FATF updates guidance for money or value transfer services, 23 February 2016