Central Bank of the UAE Anti-Money Laundering and Combating the Financing of Terrorism and Illegal Organisations Best Practices for Licensed Financial Institutions on Implementing a Risk-Based Approach and Conducting Risk-Based Institutional Risk Assessments

October, 2025

Contents

1. Introduction...3 1.1. Purpose and Scope...3 1.2. Applicability ...4 1.3. Legal Basis...4 1.4. Acronyms ...4
2. Implementing a Risk-Based Approach ...5 2.1. Definition and Purpose ...5
3. Conducting a Risk-Based Institutional Risk Assessment ...6 3.1. Definition and Overview ...6 3.1.1. Purpose of ML/TF/PF Risk Assessment...6 3.1.2. Overview of the characteristics of an effective risk assessment methodology ...7 3.1.3. Granularity and level of detail in the risk assessment ...8 3.1.4. Consultation, accountability and stakeholders relevant to the Risk Assessment ...8 3.1.5. Frequency of the ML/TF/PF Risk Assessment ...8 3.2. Principles and Best Practices for ML/TF/PF Institutional Risk Assessments ...9 3.2.1. General Best Practices...9 3.2.2. Assessing Inherent Risk ...10 15 3.2.3. Assessing the Control Environment ...15 3.2.4. Determining Residual Risk ...22
4. Application of an RBA...24
5. Conclusion ...25
6. Annexur...