RBA stands for Risk-Based Approach.

Then what’s that referring to?

A RBA to AML/CFT means that countries, competent authorities and financial institutions, are expected to identify, assess and understand the ML/TF risks to which they are exposed and take AML/CFT measures commensurate to those risks in order to mitigate them effectively.

When assessing ML/TF risk, countries, competent authorities, and financial institutions should analyze and seek to understand how the ML/TF risks they identify affect them; the risk assessment, therefore, provides the basis for the risk-sensitive application of AML/CFT measures. The RBA is not a “Zero failure” approach; there may be occasions where an institution has taken all reasonable measures to identify and mitigate AML/CFT risks, but it is still used for ML or TF purposes.

A RBA does not exempt countries, competent authorities and financial institutions from mitigating ML/FT risks where these risks are assessed as low.