Topic 13

8. The assessment of the adequacy of a country‘s AML/CFT framework will not be an exact process, and the vulnerabilities and risks that each country has in relation to ML and FT will be different depending on domestic and international circumstances. ML and FT techniques evolve over time, and therefore AML/CFT policies and best practices will also need to develop and adapt to counter the new threats.

9. The FATF Recommendations provide the international standard for combating money laundering and terrorist financing and the Recommendations and the criteria set out in this Methodology are applicable to all countries. However, assessors should be aware that the legislative, institutional and supervisory framework for AML/CFT may differ from one country to the next. Provided the FATF Recommendations are complied with, it is acceptable that countries implement the international standards in a manner consistent with their national legislative and institutional systems, even though the methods by which compliance is achieved may differ. In this regard, assessors should be aware of each country‘s stage of economic development, its range of administrative capacities, and different cultural and legal conditions. Moreover, the report should provide the context for the assessment, and make note of any progress that has been or is being made in implementing the international standards and the criteria in this Methodology.

10. The essential criteria are those elements that should be present in order to demonstrate full compliance with the mandatory elements of each of the Recommendations. Criteria to be assessed are numbered sequentially for each Recommendation, but the sequence of criteria is not important. In some cases elaboration (indented below the criteria) is provided in order to assist in identifying important aspects of the assessment of the criteria. In addition, examples are provided, for some criteria, of situations in which a particular requirement could apply, or where there may be exceptions to the normally applicable obligations. The examples are not part of the criteria, and are only illustrative, but they may provide guidance as to whether national measures for particular criteria may be appropriate.

Compliance Ratings

11. For each Recommendation there are four possible levels of compliance: compliant, largely compliant, partially compliant, and non-compliant. In exceptional circumstances a Recommendation may also be rated as not applicable. These ratings are based only on the essential criteria, and defined as follows:

Compliant The Recommendation is fully observed with respect to all essential criteria.

Largely compliant. There are only minor shortcomings, with a large majority of the essential criteria being fully met.

Partially compliant. The country has taken some substantive action and complies with some of the essential criteria.

Non-compliant. There are major shortcomings, with a large majority of the essential criteria not being met.

Not applicable. A requirement or part of a requirement does not apply, due to the structural, legal or institutional features of a country e.g. a particular type of financial institution does not exist in that country.

12. Assessors should review whether the laws and regulations meet the appropriate standard and whether there is adequate capacity and implementation of those laws. Countries should only be regarded as fully complying with criteria if the relevant laws, regulations or other AML/CFT measures are in force and effect at the time of the on-site visit to the country or in the period immediately following the on-site mission, and before the finalisation of the report.