WHAT IS ANTI MONEY LAUNDERING?
Anti-money laundering concerns a variety of rules regulation and policies to prevent criminals from disguising illegally acquired funds as legitimate revenue. While anti-money laundering (AML) laws cover a relatively limited range of transactions and criminal activities, they have far-reaching implications. AML laws, for example, require banks and other financial institution that offer credit or allow customers to open deposit accounts to obey the rules to ensure they don’t help with money laundering.
Enforcement officers at AML are often appointed to monitor anti-money laundering measures and ensure compliance by banks and other financial institution.
How to fight money laundering(AML)
Anti-money laundering laws criminal and regulation counter criminal activities such as market manipulation trafficking in illegal goods through abuse of public funds and tax evasion as well as the method used to cover up this crime and the money they gain from them. One of the most popular strategies is to run the money through a legal cash-based business owned by the criminal organization or its confederates. The allegedly legitimate business will deposit the money which can then be stolen from the criminals.
Money launderers may also sneak cash into foreign countries to deposit it, deposit cash in smaller increments likely to raise suspicion or use it to purchase other cash instruments. The money will sometimes be spent by launderers, using fraudulent brokers willing to ignore the law in exchange for big commissions.
It is up to financial institutions to monitor deposits and other transaction made by their customers to ensure they are not part of the money-laundering scheme. Institutions need to check where a large amount of money originated track suspicious activity and record cash transactions over $10,000. In addition to compliance with AML rules, the financial institution has to ensure clients are aware of them. Police and other law enforcement agencies money laundering operation also require scrutinizing financial records for anomalies or suspicious activity. Extensive records are kept on just about any significant financial transaction in today regulatory environment so when investigator tries to trace a crime to their victims, few strategies are more successful then finding the details of the financial transaction in which they have been involved.
The law enforcement agency can often return the fund or property found during the money-laundering investigation to the victims of the crime in cases of theft embezzlement or larceny. For instance, if an agency discovers money a criminal laundered to cover-up embezzlement the agency may typically trace it back to those it was embezzled from.
AML vs KYC
AML and KYC (know your customer) vary. In the banking sector, KYC is the process that can be used to verify the identities of their customers before they provide the services. AML operates on a much wider level and the measures that institution are taking to prevent and combat money laundering, terrorist financing and other financial crimes. Bank use compliance with AML/ KYC to keep the financial institution safe.
AML HOLDING PERIOD
One form of anti-money laundering is the AML holding period which allows deposits to stay in an account for a minimum of five days of trading. The holding period is intended to assist in the management of anti-money laundering and risk.
Anti-money laundering report (AML)
Initiatives against money laundering gained global attention in 1989 when the financial action task force was founded by a group of countries and organizations all over the world. The mission is to formulate international standards to deter money laundering and to promote the application of those standards. Shortly after the 9/11 terrorist attack on the united states in October 2001, FATF expanded its mandate to include to fight terrorist financing.
The international monetary fund (IMF), is another significant agency involved in the fight against money laundering. Like the FATF, the IMF has also been pushing its 189 members countries to follow international standards to curb terrorist financing.