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Elucidate GmbH

A first general comment regarding Guideline 4.4 relates to the consistency of terminology.

Paragraph 86 notes that competent authorities “should always have the END GOAL in mind.” Paragraph 86) d) refers to “the time needed for the supervisory tool to achieve its PURPOSE”. [emphasis added] Elsewhere in the document e.g. in para 78 there are references to “clear objectives” in relation to AML/CFT supervision.

While it can reasonably be inferred that these terms are referring to similar concepts, to avoid confusion the recommendation would be to ensure consistency across this and other relevant sections of the Guidelines.

The second comment relates to Paragraph 78 which states that “In the strategy, competent authorities should set clear objectives for their approach to AML/CFT supervision and set out how these objectives will be achieved.” Paragraph 78 also lists six elements a) to f) that a supervisory strategy should include.

We would recommend to add the following to the first sentence of paragraph 78:
“...set out how these objectives will be achieved WITHIN A PRE-ESTABLISHED TIMEFRAME.”

Rationale: A specified timeframe facilitates the definition of the scope and level of ambition of supervisory objectives; provides opportunities to link supervisory objectives to other relevant time frames e.g. FATF evaluation cycles; and facilitates the monitoring and evaluation of progress against objectives.

In addition, we recommend to add the following points to the list of six elements a) to f) under paragraph 78:

- Ensure that supervisory objectives are expressed in terms of outcomes and/or impacts rather than outputs or inputs
- Establish a systematic approach to monitor and report on progress towards the supervisory objectives set out in the strategy
- Determine qualitative and quantitative indicators linked to the supervisory objectives, together with the baseline and target values for those indicators within the relevant timeframe.


The recommendation to focus on outcomes and impacts is in line with sources including World Bank (2011) which notes that outcomes and impacts are linked to the principle of effectiveness, while inputs and outputs are linked to the principle of efficiency.

Given the overarching goal of AML/CFT effectiveness in the Guidelines, this recommendation seeks to ensure that objectives established by supervisors are also defined in a way that explicitly contributes to increased AML/CFT effectiveness.

Regarding monitoring and evaluation of progress, including the determination of indicators, multiple sources emphasise the importance of systematic monitoring and evaluation mechanisms to strengthen public policy design and implementation.

World Bank (2011) for example, states that "Performance measurement is an essential part of a broader process often referred to as performance based management or managing for results, the objective of which is to improve efficiency, effectiveness, and accountability in government."

The OECD defines monitoring as “a continuing function that uses systematic collection of data on specified indicators to provide management and the main stakeholders of an ongoing […] intervention with indications of the extent of progress and achievement of objectives and progress in the use of allocated funds”, and defines evaluation as “the systematic and objective assessment of an ongoing or completed project, programme or policy, its design, implementation and results".


The third comment refers to Para 91: “ Where the implementation of AML/CFT systems and controls by subjects of assessment is not the competent authority’s key objective, competent authorities should consider the use of offsite reviews.”

For this paragraph, clarification would be welcome: in which situations would it be acceptable for implementation of AML/CFT systems and controls not to be an authority’s key objective? Is this for cases where implementation is already considered satisfactory?

The fourth and final comment refers to Paragraph 129: “Competent authorities should put in place and apply a communication strategy…”

We recommend including an explicit mention of the resources required in order to implement the communication strategy, e.g. “...apply a communication strategy, including sufficient human and technical resources, that ensures that…”

Rationale: Communication of complex issues to a diverse group of stakeholders requires dedicated expertise. Hallahan et al. (2007) for example, define strategic communication as “the purposeful use of communication by an organization to fulfill its mission” which requires high levels of planning and research. Execution of the communication strategy will also require a specific set of skills and competencies.

In addition, including an explicit mention of resources in the paragraph referring to communication strategy contributes to the internal consistency of the Guidelines. For example, Paragraph 78 e) notes the need to “ensure that sufficient resources are available” in the context of supervisory strategy; the same should apply to communication strategy.


Thank you for the opportunity to provide input.

Maximilian Heywood