Anti-Money Laundering - The Critical Role of AML Compliance - YouTube

Money laundering is a scourge on the planet.

An estimated 800 billion to 2 trillion  dollars is laundered every year.

That's why Anti-Money Laundering  laws were established,

to make it harder to hide money and  get away with crime and corruption.

It's a battle being fought by regulators,  compliance teams, and good businesses everywhere.

Money launderers hide proceeds  from illicit activities in

real estate, businesses, casinos shell, companies

and numerous other schemes to  legitimize their ill-gotten gains.

They laundered their money through:

Banks, which were generally the first  institution to come under AML laws.

Brokers, any financial services or money  services business, also needs to implement AML.

or Bitcoin, the launderers are always adapting, always looking for new ways to cheat.

And AML laws expand to cover  new methods, close loopholes,

and try to tighten the financial  rope around these miscreants.

Compliance departments put those regulations  into effect at regulated companies such as,

banks, financial institutions,  and money service businesses,

to help ensure that the companies don't face  fines, sanctions, or reputational damage.

AML is a critical defense  for societies trying to help 

shepherd funds into the public  good, not criminal hands.

AML compliance is vital work.

There are three stages of money laundering.

1. Placement, when the dirty money  enters a legitimate financial system.

2. Layering, using multiple complex  transactions to hide the source of the money.

3. Integration, when the clean money returns to the criminal via legitimate sources.

While each stage of the process  is necessary for the money 

launderer to get their dirty funds  clean and back into their hands,

it is the first step, placement, that provides  the best opportunity to stop the operation.

After all, placement is when the money  has the closest connection to the crime  

and there's less chance that the true source  of the funds has been obscured or diluted.

For that reason, transactions in cash are  an excellent place to start when creating

AML compliance policies, programs, and procedures.

If there is a large cash transaction,  where did the money come from?

If there are numerous cash  transactions in the same account,  

why is there so much cash being transacted?

If there is a big spike in the number or value of transactions, why?

Does the business deal with lots of cash?

Does it deal with countries or organizations that  are known to have issues with money laundering?

There are often said transaction or  threshold limits that provide rules

on the use of cash and what is suspicious  and requires investigation or reporting.

One best practice is taking a risk-based  approach, understanding the risks of various  

activities and accounts and modifying the level  of risk management and controls accordingly.

Creating a good AML compliance  program should not be left a chance.

It requires careful strategic  thinking, robust operational 

procedure and ongoing fine-tuning, and analysis.

While each jurisdiction and  industry will have different 

requirements, here are some general rules:

have a written policy,

have a designated officer,

have employee training,

have systematic reviews.

An effective AML screening program, which stops  money launderers before they even open an account,

is one of the best ways to help ensure AML  regulatory compliance and risk mitigation.

Know Your Customer, that  means knowing your customer's 

identity, their financial  activities, and the risk they pose.

Requiring proof of identity to open a financial account is standard practice.

Being thorough and accurate at this stage  can help prevent the opening of accounts

that are not connected with real individuals,

or by individuals associated  with problematic activities.

The same approach applies for opening business accounts,

the identity of individuals associated with the business should be checked and verified.

AML laws are increasingly requiring the checking  of the ultimate beneficial owners of the business, 

the UBOs, to better understand the nature  of the company and the people behind it.

Beyond AML screening, there  are many steps to ensure an

effective AML compliance program including

monitoring and reporting.

Accounts need to be monitored to ensure that  transactions fit with the account profile

and any unusual activities are  flagged for further investigation.

If suspicious activity does  occur, reporting to the regulators

is necessary to help track and potentially lay charges around criminal activity.

AML compliance is often complex,  ever changing and, a source of substantial risk.

As opposed to making it an afterthought, approaching AML compliance as

a core requirement, helps deliver a program that  protects the organization and its good name.

Helping your organization prevent the facilitation of crime and corruption is fundamental to modern financial operations.

For more information about AML compliance, search 'AML' at trulioo.com/resources

For over 25 different reference papers, case  studies, webinars, reports, and data sheets.