FATF warns against wholesale de-risking

“De-risking should never be an excuse for a bank to avoid implementing a risk-based approach in line with Financial Action Task Force standards,” FATF announced in a release on 23 October 2014. Those standards, the 40 Recommendations, only call for financial institutions to close customer accounts, “on a case by case basis”, if the money laundering and terrorist financing risk cannot be mitigated. Any move to terminate business with entire customer classes without assessing “seriously and comprehensively” the risk they pose and measures that might be put in place to control it for individual customers would, said FATF, run counter to its standards. The risk-based approach does not mean “zero failure”, FATF added.