Anti-money Laundering (AML)
What is anti-money laundering (AML)?
Money laundering is the illegal practice of making a large amount of money, obtained through criminal means, look as though it comes from legitimate sources. The term comes from the notion that such money (usually cash) is ‘dirty’ and ‘laundering’ it makes it appear clean. Unfortunately, it’s a common problem in today’s international marketplace. Examples of money laundering include:
- funnelling money through a criminal enterprise’s legitimate cash-based business, such as a restaurant that boosts its daily earnings
- spreading large sums of money across multiple bank accounts in smaller deposits to keep from being caught
- using shell companies – organizations with no office and no employees that exist only on paper
Anti-money laundering (AML), therefore, attempts to counter this prevailing problem. AML encompasses the laws, regulations and processes that aim to stop criminals from passing off illegally gained funds as legitimate income. These rules and regulations also require companies to closely monitor the individuals and organizations with which they do business.
AML activities focus on such illicit transactions and practices as:
- market manipulation
- illegal goods trading
- tax evasion
- other forms of financial corruption
AML rules and regulations are becoming increasingly more stringent worldwide, and it’s more important than ever that companies comply and protect themselves from association with corrupt individuals, entities and practices.
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