What is anti-money laundering

The set of procedures and legislation adopted in order to prevent generating income through the means of illegal financial activity is referred to as anti-money laundering. The majority of individuals that acquire income through illegal means tend to conceal it to avoid being caught engaging in fraudulent activity.

The scope of anti-money laundering

Anti-money laundering, commonly known as AML, refers to a specific set of procedures that are adopted to negate the chances of income being generated from unethical or illegal sources. Money launderers take measures in order to conceal their illegal activity from the government and international bodies within jurisdictions, however due to AML, these unscrupulous individuals are caught and deterred from such activity.

Money laundering often includes the movement of funds between jurisdictions or within a country, as well as terrorist activity involving finances. To prevent and avoid such activity taking place within a jurisdiction, the government adopts a number of strict anti-money laundering regulations.

The following is a brief outline of measures that can be taken in order to avoid money laundering:

  • Background checks on clients/potential clients
  • Identifying suspicious financial activity
  • Reporting unaccounted sums of money
  • Due diligence procedures

The above mentioned procedures are often adopted by banks or financial institutions to negate the potential of illegal activity and suspicious clients. There are a number of other procedures that can be applied to banking regulations to further prevent money laundering.

When establishing a bank, it is highly important to adopt anti-money laundering regulations to avoid further distress for the banking institution. It is advised to enlist the services of a professional consultancy firm to ensure that your bank is established in an efficient and timely manner.

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