84. Banking supervisors are expected to comply with FATF Recommendation 26, which states in part: "For financial institutions subject to the Core Principles, the regulatory and supervisory measures that apply for prudential purposes, and which are also relevant to money laundering and financing of terrorism, should apply in a similar manner for AML/CFT purposes. This should include applying consolidated group supervision for AML/CFT purposes." The Committee expects supervisors to apply the Core principles for effective banking supervision to banks' ML/FT risk management in a manner consistent with and supportive of the supervisors' overall supervision of banks. Supervisors should be able to apply a range of effective, proportionate and dissuasive sanctions in cases when banks fail to comply with their AML/CFT requirements.

85. Banking supervisors are expected to set out supervisory expectations governing banks' AML/CFT policies and procedures. The essential elements as set out in this paper should provide clear guidance for supervisors to proceed with the work of designing or improving national supervisory practice. National supervisors are encouraged to provide guidance to assist banks in designing their own customer identification policies and procedures. The Committee has therefore developed two specific topic guides in Annexes 1 and 2, which could be used by supervisors for this purpose.