What is Money Laundering?
Money laundering has become a pervasive global issue over the past few decades, prompting financial institutions and governments worldwide to address the influx of illicit funds into the global economic system. International bodies, such as the Financial Action Task Force (FATF), have formulated Anti-Money Laundering (AML) regulations to combat this problem on a global scale.
What is Anti Money Laundering (AML)?
AML, or Anti-Money Laundering, encompasses a set of policies and legislation that require compliant industries to identify, screen, and monitor their clients to prevent money laundering. Any suspicious activities must be reported by the designated Money Laundering Reporting Officer (MLRO) as a Suspicious Transaction Report (STR) to the relevant supervisory body.
Origins of AML regulations
AML regulations have their origins in the efforts of the Financial Action Task Force (FATF), an influential international organization involving 37 countries. The FATF has gained significant prominence and emerged as a leading authority in the AML domain.
It has established global standards and implemented a robust framework that assesses countries based on their AML legislation. Through this approach, the FATF encourages countries to strengthen their laws and enforce AML standards universally.
By aligning with international standards, countries are compelled to enhance their AML regulations and ensure consistent compliance across borders. This concerted effort aims to combat money laundering effectively and promote transparency in the global financial system.
Is your organization already compliant with AML regulations?