Inclusive Financial Integrity: Guidance Note

Inclusive Financial Integrity: Guidance Note

March 16, 2018 •

Countries in the sub-Saharan Africa (SSA) region have been on a development curve in setting up effective Anti-Money Laundering (AML) and Combatting the Financing of Terrorism (CFT) regulatory responses that meet the international Financial Action Task Force (FATF) standards. FATF is a global body mandated with setting standards on financial integrity and monitors and evaluates countries’ progress in meeting these standards through FATF mutual evaluations, which are currently taking place. If countries do not meet these international standards, they face the risk of sanctions, including cutting off their financial systems from important correspondent banking relationships.

Against this background, countries in SSA have highlighted the key challenge of designing AML/CFT frameworks and processes that meet FATF integrity standards while at the same time promoting both financial inclusion and integrity. In fact, financial inclusion and integrity are perceived and pursued as competing objectives. However, key findings from a report commissioned by Financial Sector Deepening Africa (FSDA) look at how effectively implementing a risk-based approach (RBA) to AML/CFT regulation can balance financial inclusion and financial integrity as complementary objectives.

This guidance note builds on the findings from the report and industry engagements held in Zambia, Malawi, Nigeria and Uganda to help financial regulators effectively implement an RBA approach to AML/CFT to achieve both financial inclusion and financial integrity.

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