FATF Supplements Guidance in Money Laundering National Risk Assessment Toolkit

The Financial Action Task Force ("FATF") added three annexes, each addressing a distinct aspect of national risk assessment design and implementation, to its "Money Laundering National Risk Assessment ("NRA") Toolkit." 

FATF explained that the guidance assists jurisdictions in conducting comprehensive, risk-based assessments of their money laundering threats and vulnerabilities. It is intended as a flexible, non-prescriptive resource to help countries adapt their NRA methodologies to national contexts while maintaining alignment with FATF’s risk-based approach. The toolkit includes practical examples, case studies, and data references to support effective and proportionate implementation across jurisdictions.

In Annex A: Quick Guides for Assessing Challenging Risk Areas

FATF provided practical guidance for jurisdictions on assessing four areas that can present significant challenges in national risk assessments:

• Corruption. FATF offered recommendations on assessing corruption-related risks, including understanding the domestic and foreign corruption landscape, the role of politically exposed persons, and the flow of proceeds from corruption. There are case studies from Indonesia, Malaysia, France, and The Gambia.
• Virtual Assets and Virtual Asset Service Providers ("VASPs"). FATF outlined key differences between virtual assets and traditional finance, providing a framework to assess VASP-related threats and vulnerabilities. FATF included guidance on country context, data collection, and risk identification, supported by case studies.
• Legal Persons and Legal Arrangements. FATF included steps for evaluating risks related to corporate structures, including mapping all entity types, identifying foreign entities with links to the jurisdiction, and collecting relevant data. FATF stated that case studies from New Zealand, China, Türkiye, Nigeria, and Jordan illustrate good practices.
• Informal Economy. FATF emphasized the importance of understanding informal financial activities as a contextual risk factor for money laundering ("ML") vulnerabilities. Case studies are drawn from China, Indonesia, and Israel.

In Annex B: Cross-Comparison and Categorization of ML Threats

FATF helps jurisdictions prioritize and contextualize their assessment of money laundering threats and vulnerabilities:

• Major Predicate Offenses. FATF compiled global data identifying fraud, corruption, drug trafficking, and tax crimes as the most common and highest-yielding predicate offenses.
• Consequences of Crime. FATF encouraged jurisdictions to consider not only financial losses but also broader societal, environmental, and governance impacts arising from ML and its predicate offenses.
• Types of Money Laundering. FATF analyzed the range of ML typologies reflected in national assessments, including self-laundering, third-party laundering, and cross-border schemes.
• Threat and Vulnerability Factors. FATF provided detailed tables categorizing threat indicators (e.g., sources and movement of illicit funds, perpetrators, and technologies used) and sectoral vulnerabilities through a PESTEL (Political, Economic, Social, Technological, Environmental, Legislative) framework.

In Annex C: Package of NRA Tools

FATF summarized several publicly available tools, developed by international partners, to support jurisdictions in conducting effective risk assessments:

• World Bank Tool:  FATF provided a self-assessment framework combining quantitative and qualitative data modules for national and sectoral risk evaluation.
• International Monetary Fund Tool: FATF provided a methodology centered on assessing threats, vulnerabilities, and consequences using surveys and expert consultations.
• Council of Europe Tool:  FATF provided an adaptable tool for initial and follow-up assessments, emphasizing a data-driven yet flexible approach to determining inherent and residual risk.

Annex C also includes extensive tables listing additional data sources and reference materials corresponding to each of the challenging risk areas addressed in Annex A.