CountriesAll references in the FATF Recommendations to country or countries apply equally to territories or jurisdictions. should For the purposes of assessing compliance with the FATF Recommendations, the word should has the same meaning as must. identify, assess, and understand the money laundering and terrorist financing Terrorist financing is the financing of terrorist acts, and of terrorists and terrorist organisations. risks All references to risk refer to the risk of money laundering and/or terrorist financing. This term should be read in conjunction with the Interpretive Note to Recommendation 1. for the country, and should take action, including designating an authority or mechanism to coordinate actions to assess risks, and apply resources, aimed at ensuring the risks are mitigated effectively. Based on that assessment, countries should apply a risk-based approach (RBA) to ensure that measures to prevent or mitigate money laundering and terrorist financing are commensurate with the risks identified. This approach should be an essential foundation to efficient allocation of resources across the anti-money laundering and countering the financing of terrorism (AML/CFT) regime and the implementation of riskbased measures throughout the FATF Recommendations. Where countries identify higher risks, they should ensure that their AML/CFT regime adequately addresses such risks. Where countries identify lower risks, they may decide to allow simplified measures for some of the FATF Recommendations under certain conditions.

Countries should require financial institutions Financial institutions means any natural or legal person who conducts as abusiness one or more of the following activities or operations for or on behalf of a customer:
1) Acceptance of deposits and other repayable funds from the public.
2) Lending.
3) Financial leasing.
4) Money or value transfer services.
5) Issuing and managing means of payment (e.g. credit and debit cards,cheques, traveller's cheques, money orders and bankers' drafts, electronic money).
6) Financial guarantees and commitments.
7) Trading in:
a) money market instruments (cheques, bills, certificates of deposit, derivatives etc.);
b) foreign exchange;
c) exchange, interest rate and index instruments;
d) transferable securities;
8) Participation in securities issues and the provision of financial services related to such issues.
9) Individual and collective portfolio management.
11) Otherwise investing, administering or managing funds or money on behalf of other persons.
12) Underwriting and placement of life insurance and other investment related insurance.
13) Money and currency changing.
and designated non-financial businesses and professions (DNFBPs) to identify, assess and take effective action to mitigate their money laundering and terrorist financing risks.

Countries should For the purposes of assessing compliance with the FATF Recommendations, the word should has the same meaning as must. have national AML/CFT/CPF policies, informed by the risks*Proliferation financing risk refers strictly and only to the potential breach, non-implementation or evasion of the targeted financial sanctions obligations referred to in Recommendation 7. identified, which should be regularly reviewed, and should designate an authority or have a coordination or other mechanism that is responsible for such policies.

Countries should ensure that policy-makers, the financial intelligence unit (FIU), law enforcement authorities, supervisors Supervisors refers to the designated competent authorities or non-public bodies with responsibilities aimed at ensuring compliance by financial institutions (�financial supervisors� 60Including Core Principles supervisors who carry out supervisory functions that are related to the implementation of the FATF Recommendations.) and/or DNFBPs with requirements to combat money laundering and terrorist financing. Non-public bodies (which could include certain types of SRBs) should have the power to supervise and sanction financial institutions or DNFBPs in relation to the AML/CFT requirements. These nonpublic bodies should also be empowered by law to exercise the functions they perform, and be supervised by a competent authority in relation to such functions. and other relevant competent authorities, at the policymaking and operational levels, have effective mechanisms in place which enable them to cooperate, and, where appropriate, coordinate and exchange information domestically with each other concerning the development and implementation of policies and activities to combat money laundering, terrorist financing Terrorist financing is the financing of terrorist acts, and of terrorists and terrorist organisations. and the financing of proliferation of weapons of mass destruction. This should include cooperation and coordination between relevant authorities to ensure the compatibility of AML/CFT/CPF requirements with Data Protection and Privacy rules and other similar provisions (e.g. data security / localisation).