The AML CFT Act is risk based legislation.  The risk based approach to regulatory requirements evolved after recognition that prescriptive legislation was not allowing businesses to compete on a level playing field.   Overly prescriptive legislation caused small to medium size businesses to incur compliance costs that did not fairly reflect the risks they presented.

A risk based approach allows businesses to target resource and effort where the risk is greatest and, conversely, reduce requirements where the risk is low.   How a business satisfies these obligations will be dependent on the types of risks it faces.

Senior management buy-in and ongoing commitment is needed in order to produce and embed a successful risk based approach.      

IMPORTANT INFORMATON – The AML CFT Act does not prevent business that falls into a high risk category.   What the Act requires is that risk be recognised and appropriately managed.   Recognising and appropriately managing risk protects your business.  The Risk Assessment and Compliance Programme are the primary documents that will evidence your business’s stance to your AML CFT Act obligations.