3 Points Of AML Compliance Program for Businesses to Resist Money Laundering

Introduce to AML Compliance Program for Businesses


The rise in the number of illicit funds used for money laundering and terror financing has accelerated the need for a solid AML Compliance program. An AML program that can restrict the circulation of illegal funds in the financial ecosystem and encourage legitimate sources of money to be used in the monetary channels is known as an efficient AML compliance program. Since the sources of laundered money are illegal, it is crucial to make it difficult to gain money from those sources. As the money is circulated in the financial channels, it becomes harder to point out money launderers because money laundered hides the source of money. The first step to point money laundering is by exposing the source.

AML Compliance Program

Businesses and governments should set some protocols and rules to stop aml anti-money laundering and terror financing. To implement an AML compliance program a business or government should adopt the below practices.

Written Policies

During or after the construction of the business model of organization policies, laws, regulations, and procedures should be stated clearly. Executives, Managers, regular employees, and regulators should be well aware of the organizational policies. The process of identification, verification and authentication of the customers for a business should be declared decidedly.

  • Normally the written policies answer the below questions.
  • What are the verification procedures?
  • What records are business maintaining?
  • What directions (AML directives) are businesses acting upon?
  • How a business will communicate with other business entities?
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AML Compliance Officer

AML Compliance Officer
AML Compliance Officer

An AML compliance officer or AML compliance department is responsible for compliance with AML directives issued by global law enforcement agencies. AML compliance officers make sure that communication with other business entities is secure and the other business entities are doing legitimate business. In case of any regulatory breach, he takes appropriate disciplinary measures to prevent any breach in future.

Training of Employees

This is the most significant and effective step against money laundering. Now cybercriminals use digital channels for money laundering. Gone are the days when there was the physical transfer of money across borders, in the present date cryptocurrency, freelance platforms and online banking channels are used to launder money. Employees of a business should be trained and educated with these means of money laundering. Normally AML compliance officers educate employees with written policies and regulations of the business. The training also includes related knowledge of the directive and guidelines by the global monitoring authorities.

As employees have to deal with daily transactions, their training is essential for the reporting of any suspicious financial transaction. The training shouldn’t be one time in the service, but employees should get regular training workshops probably annually or whenever new directives are issued by authorities.

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If everything is going smooth there is nothing to fear but why should a business wait for any breach. Businesses should review their policies accordingly with the new laws and regulations. Businesses should conduct regular third-party audits. The auditor should not be a person associated with the business and reviews the AML compliance program periodically.

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Red Flags

A warning for any doubtful activity or financial cash flow should be set up for the AML compliance program. The AML compliance red flags include.

  • Heavy cash transfers
  • Splitting of large cash into small amounts
  • Money obtained through gambling or casinos
  • Transactions that are directly or indirectly connected with money launderers or PEPs (Politically Exposed Persons)
  • Financing of private funding by a business
  • Quick sale-purchase of assets
  • Ghost shipments, nothing has been delivered but the payment has been paid or nothing has been paid but the order is delivered

Wrapping It Up

AML compliance program is essential for any business as directed by monetary authorities. A business that does not comply with an AML program could be banned or fined. In the era of digitization and virtualization, AML compliance is carried through AML software. The software scans and screens any irregular cash flows in a business. The screening of PEP’s through anti-money laundering software is fast and reliable. All the businesses should comply with the anti-money laundering program, it will save them from penalties and also make a more safe financial ecosystem.












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