Anti-money Laundering : Introduction
Money laundering has become a worldwide problem, enabling criminals to transform the proceeds of illicit activity into seemingly legitimate funds that can move freely through the global financial system without detection. Through money laundering, criminals can conceal their ill-gotten gains and promote criminal activity. Almost every country has laws criminalising money laundering, penalising individuals and corporations for laundering crime proceeds both domestically and internationally.
In most jurisdictions, a money laundering conviction results in a significant term of imprisonment, criminal penalties and asset forfeiture. In some jurisdictions, the government may bring civil claims, such as through civil asset forfeiture, to recover crime proceeds or property related to the laundered funds. Countries devote significant resources to the investigation and prosecution of money laundering, with some creating specialised prosecutorial units with dedicated law enforcement officers.
To combat money laundering, a substantial number of countries have enacted anti-money laundering (AML) laws and regulations requiring financial institutions in the respective countries to take steps to prevent money laundering through their institutions and report on suspected money laundering and terrorist financing activity. Which businesses fall under a given country’s AML laws and are subject to regulation vary by jurisdiction.
While the AML laws and regulations differ from country to country, these laws often share similarities, including requirements to create AML policies and procedures, such as Know Your Customer and Customer Due Diligence procedures; to monitor customer transactions; and to identify and report suspicious activity and transactions.
This know-how guide reviews the money laundering and anti-money laundering laws in specific jurisdictions enabling practitioners to identify the relevant laws and regulations and to understand which individuals and entities are subject to those laws and regulations. Practitioners can compare and contrast the laws and regulations across jurisdictions to better understand what constitutes money laundering in a particular jurisdiction and the affirmative obligations on financial institutions operating in the jurisdiction to prevent and report money laundering and the financing of terrorism.