Over the past three years, progress has been made with the problem of derisking and the situation has stabilized so that no country is at risk of losing access to international payments services. At the same time, the problem has not yet been resolved, according to a report from the Center for Global Development(CGD), Policy Responses to De-Risking: Progress Report on the CGD Working Group's 2015 Recommendations.
Three years ago, CGD published Unintended Consequences of Anti–Money Laundering Policies for Poor Countries, which made focused on international correspondent banking, money transfer operators (MTOs), and nonprofit organizations (NPOs) and warned that "the disruption of these sectors could make it harder for small businesses to secure trade finance, for migrants to send remittances back home, and for NPOs to provide lifesaving humanitarian aid abroad." The 2015 report made five recommendations to stakeholders to address derisking:
- Rigorously assess the unintended consequences of AML/CFT and sanctions enforcement at the national and the global level.
- Generate better data and share data to facilitate regulatory impact assessments
- Strengthen the risk-based approach
- Improve compliance and clarify indicators of lower risk
- Facilitate identification and lower the costs of compliance
CGD's new report takes stock of the progress made on these recommendations, finding that stakeholders should continue to work together to mitigate derisking and its root causes. The number of international correspondent banking relationships continues to decline, and MTOs and NPOs continue to encounter financial access problems. At the same time, it notes that "he policy response to de-risking, especially at the international level, has been commendable."
The new report suggests additional measures that could be taken by policymakers, such as conducting comprehensive regulatory impact assessments of AML/CFT and sanctions regimes, providing more training to bank examiners on how to properly assess the risks of MTOs and NPOs, clarifying regulations and bank examination manuals as appropriate to reflect a proportionate risk-based approach, and implementing systematic monitoring of account and transaction activities in correspondent banking, remittances, and NPOs focused on humanitarian activities. "De-risking has exposed certain flaws in our approach to AML/CFT, but it also presents a valuable opportunity to address those shortcomings and, in doing so, to move toward a system that does more to ensure integrity and inclusiveness," the report states.