What is money laundering?
‘Money laundering’ describes the way some criminals use the legitimate financial system to try to hide or disguise the proceeds of crimes. Money laundering enables criminals to frustrate attempts to prosecute them or to recover the illegal gains of their crimes by distancing themselves and the money from the criminal activity that generated them. It also enables criminals to use the money for future criminal activity or in legitimate business.
What is terrorism financing?
The term terrorism financing includes the financing of terrorist acts, and of terrorists and terrorist organisations. The financing of terrorism may include the provision of any kind of asset in any form, including but not limited to, bank credits, travellers cheques, bank cheques, money orders, shares, securities, bonds, drafts, and letters of credit.
What are the core requirements of an Anti-Money Laundering program?
The Financial Action Task Force (FATF) currently comprises 190+ country members representing most major financial centres in all parts of the globe.
FATF has developed recommendations on money laundering and terrorism financing that member countries have committed to adopt. FATF assesses each member country against these recommendations in published reports. Countries seen as not being sufficiently compliant with such recommendations are subjected to financial sanctions.
The core components of most AML/CFT Programs includes:
- Customer Identification / Know Your Customer (KYC)
- Enhanced Customer Due Diligence (ECDD)
- Know Your Employee (KYE) / Employment Screening
- Ongoing Customer Due Diligence (OCDD)
- Transaction Monitoring Program (TMP)
- Board and Senior Management Oversight
- Independent Review
- Staff Awareness Training
- AML Programs and Policy