Writing Resources
The increasing and continuous efforts to prevent financial crimes placed a significant weight on the adoption of a Risk based approach RBA Its definition can be found at FATF s Risk Based Approach Guidance for the Banking Sector as a system whereby countries competent authorities and banks identify assess and understand the money laundering and terrorist financing risk to which they are exposed and take the appropriate mitigation measures in accordance with the level of risk In the same line the Law Society explains that the RBA is an approach which allows professionals to direct resources to meet money laundering risks where they are the greatest whereby financial crimes can be more effectively targeted On the opposing side some might argue that a Rule based approach which is solely based on prescriptive rules and does not consider the risks inherent to each party can be equally efficient to prevent money laundering and terrorist financing However when analysing the flexibility given to countries and institutions to design their own strategy considering its specificities and risks we can understand why its applications is constantly increasing
