54. The risk-based approach to supervision enables supervisory authorities to allocate their resources and attention based on identified risks. Supervisory authorities should develop and implement supervisory strategies that are risk-based and graduated using the information obtained as part of the risk assessment process. The strategy should provide a clear nexus between the ML/TF risks (the risks specific to the jurisdiction or sector) and indicate how the proposed strategy and the use of supervisory tools (covered in Annex A of this Guidance) addresses these risks. A risk-based supervisory strategy ensures the risks determine the nature, frequency, intensity, and focus of supervision, setting expectations for engagement with entities across the risk spectrum including higher risk and lower risk entities.