| Ad hoc inspection | means a review that is triggered by a specific event or ML/TF risk |
| AML/CFT returns | means regular or ad hoc requests by competent authorities to subjects of assessment for quantitative or/and qualitative data and information relating to key ML/TF risk indicators. |
| Cluster | means two or more credit institutions or financial institutions in a sector having similar characteristics and exposure to the same levels of ML/TF risk. |
| De-risking | means a refusal to enter into, or a decision to terminate, business relationships with individual customers or categories of customers associated with higher ML/TF risk, or to refuse to carry out higher ML/TF risk transactions. |
| Emerging risk | means a risk that has never been identified before or an existing risk that has significantly increased. |
| Follow-up inspection | means a review, which serves to assess whether weaknesses in subject of assessment’s AML/CFT systems and controls framework identified during a previous inspection or review have been corrected. |
| Full-scope on-site inspection | means a comprehensive review of all AML/CFT systems and controls implemented by subjects of assessment or their business lines, which takes place on the premises of subject of assessment. |
| Inherent risk | refers to the level of ML/TF risk present in a subject of assessment or a sector before mitigating measures are applied. |
| ML/TF Risk | means the likelihood and impact of ML/TF taking place. |
| ML/TF risk factors | means variables that, either on their own or in combination, may increase or decrease ML/TF risk. |
| Off-site review | means a comprehensive review of subjects of assessment’s AML/CFT policies and procedures, which is not taking place on the premises of subjects of assessment. |
| Risk ‐ based approach (RBA) | means an approach whereby competent authorities and subjects of assessment identify, assess and understand the ML/TF risks to which subjects of assessment are exposed and take AML/CFT measures that are proportionate to those risks. |
| RBS Model | refers to the whole set of procedures, processes and mechanisms that competent authorities use to exercise their AML/CFT supervisory powers in a way that is commensurate with the identified ML/TF risks. |
| Residual risk | means the level of risk that remains after AML/CFT systems and controls are applied to address the inherent risk. |
| Risk profile | refers to the overall characteristics of the ML/TF risk associated with the subject of assessment or sector/sub-sector, including the type and level of risk. |
| Subject of assessment | means a credit institution or a financial institution or a cluster, categorised according to criteria laid down by the competent authorities. |
| Supervisory tools | means all supervisory measures competent authorities can take to ensure compliance by subjects of assessment with their AML/CFT obligations. |
| Thematic inspection | means a review of a number of subjects of assessments that focus on one specific or very few aspects of these subject of assessments’ AML/CFT systems and controls. |
| Threat | means the potential harm caused by criminals, terrorists or terrorist groups and their facilitators, through their past, present and future ML or TF activities. |