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25 Eur. J. on Crim. Pol'y & Rsch. 1 (2019)

handle is hein.journals/eurjcpr25 and id is 1 raw text is: European Journal on Criminal Policy and Research (2019) 25:1-4 https://doi.org/10.1007/s10610-019-09409-3 Assessing the risk of money laundering: researchh challenges and implications for practitioners Ernesto Ugo Savona' - Michele Riccardi' Published online: 5 March 2019 © Springer Nature B.V. 2019 Introduction Over the past 12 years, the concept of risk has become central to the anti-money laundering (AML, hereinafter) debate worldwide. All the actors involved in the prevention of money laundering governments, law enforcement agencies, public authorities, banks and profes- sionals have been asked to shift from a rule-based paradigm to a risk-based approach, allocating their AML efforts where the risk of money laundering is higher. The key reference of this risk-based approach (RBA) is the first of the 40 Recommenda- tions issued by the Financial Action Task Force (FATF). FATF Recommendation 1 provides that AML measures should be commensurate with the risks identified (FATF 2012, pg. 31): higher money laundering risks require enhanced measures, lower risks allow for simplified ones. Consequently, AML resources (e.g. processes, people, investigations) should be de- ployed according to the estimated risk. The RBA is a very innovative paradigm. For the first time, public and private institutions are advised not to comply blindly with the law but to evaluate where and when to take action. This innovation has found a lot of success among regulators and policy-makers. Since its introduction in the late 1990s by the FATF, the RBA has inspired the AML legislation of most countries worldwide, including the United States and most European countries. The Directive 2015/849 (or 4th EU AML Directive) and the forthcoming 5th AML Directive devote an entire section to the RBA. However, its success goes beyond geographical scope. The RBA is applied by both governments and private companies, namely all the obliged entities which are subject to AML legislation: banks, insurances, professionals, notaries, casinos, real estate agents, high value dealers, among others. All these actors should carry out an assessment of how money laundering risks distribute across areas, sectors, products and clients. The FATF and, in the EU, the 4th AML Directive 2 Ernesto Ugo Savona emesto. savona@unicatt.it Michele Riccardi michele.riccardi@unicatt.it Universiti Cattolica del Sacro Cuore - Transcrime, Largo Gemelli 1, Milan, Italy 4 Springer

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