148. According to the FATF Standards, a jurisdiction may decide to assign all or some of supervisory tasks and responsibilities to self-regulatory bodies (SRBs) of DNFBPs (except for casinos). However, this arrangement needs to consider the jurisdictional context and may not be optimal for all jurisdictions. In general, SRBs may lack the power and the tools of government supervisory agencies, particularly the sanctioning power. There may be conflict of interest and independence related issues for some SRBs (particularly where SRBs are dependent upon membership fee income). In addition, many SRBs have serious human resources and other capacity constraints, or are not adequately focused on, or adequately trained/experienced in relation to, AML/CFT issues.

149. Strategies to address this challenge:

• The designation of the appropriate AML/CFT supervisory authorities should carefully analyse these factors before deciding the possible role of the SRBs in supervision accordingly. Based on this analysis, a jurisdiction may decide that the role of the SRBs can be more complementary in nature, for example, contributing to implementing market entry controls, awareness raising, training, and guidance.

• If an SRB is chosen as a supervisor laws and regulations need to be drafted/amended to ensure that they have the necessary powers and tools. The laws and regulations should also ensure the conflict of interest situations are dealt with.