Anti-Money Laundering

Anti-Money Laundering (AML) includes policies, laws, and regulations to prevent criminals’ financial crimes and illegal activity. Global and local regulators are established worldwide to prevent financial crimes, and these regulators build policies. Companies must comply with these regulations, even though compliance can be complex. As a result, financial organizations have compliance departments and buy software solutions.

In Simple Terms, What is Anti-Money Laundering?

In the most general sense, Anti-Money Laundering (AML) refers to the collection of laws, processes, and regulations that prevent illegally obtained money from entering the financial system.

AML targets a wide variety of crimes, from corruption and tax fraud to market manipulation and illicit trade, as well as efforts to mask these activities as the source of money.

Because most criminals and terrorists rely significantly on laundered money for their illegal operations, having effective AML procedures in place has broader crime-reducing consequences.

Many businesses must do extensive customer due diligence under Money Laundering Regulations to prevent money laundering and economic crime. AML checks are an essential aspect of customer due diligence since they screen clients against PEP and Sanctions lists and verify their claimed identities. Failure to comply with AML standards can result in financial penalties and, in extreme cases, disqualification as a business/director.