AML Officer Services
Anti-Money Laundering (AML) includes policies, laws and regulations to prevent financial crimes. The short name is AML. AML is a term used throughout the world to prevent money laundering. There are global and local regulators established in the world to prevent financial crimes. Each country has different AML policies. Companies must comply with these AML regulations. AML compliance is a very complex process for companies. Companies have AML compliance departments that ensure AML compliance.
What is Money Laundering?
To understand AML regulations, we must first learn what is money laundering. Most importantly, money laundering is a major financial crime. Money laundering is the legalization of money obtained illegally. There are various money laundering processes. Money laundering methods are increasing with the development of technology. According to the International Monetary Fund (IMF), the rate of money laundering is between 2-5 percent of world GDP. This ratio corresponds to very large money. Regulators announce new directives to prevent money laundering. These are commonly referred to as AML regulations.
What is the Anti-Money Laundering Process?
The main purpose of AML regulations is to prevent money laundering. Regulators publish a series of AML procedures to achieve this goal. Companies are required to comply with these procedures. One of these procedures is the Know Your Customer Policy. Regulators require companies to learn more about their customers. According to customers’ information, companies can understand whether there is a suspicious transaction. For example, a customer who wants to transfer money can be on a country’s list of terrorists. If the firm does not know this customer, it will probably help to finance terrorism. This is a very big financial crime and has very heavy penalties
Why is AML Compliance Important?
Criminals use money laundering to conceal their crimes and their money. Financial institutions play a very important role in the world of financial crime. If financial institutions do not comply with the regulations, financial crimes will continue to increase. 2-5% of GDP is money laundered through the financial system. That’s a lot of money. In addition, regulators impose various penalties for companies that do not comply with the regulations. The value of AML fines in 2018 was $ 4.27 billion. At the end of 2019, an increase of 2-3 times the penalties are expected compared to 2018. Most of the institutions receiving these penalties are banks.
AML Officer Duties & Responsibilities
For any Financial Institution across globe, Anti Money Laundering Officer is one of the key individuals whose presence and inputs are extremely important to monitor and stop fraudulent activities. AML officer’s role depends on the AML team size but in general, the AML officer’s duty revolves around these tasks:
- Understanding the exact mechanism and process of monetary transactions taking place in the financial Institution. He can be a part of the team for improving internal KYC procedures, so as to have a more detailed knowledge about the customers.
- Giving proper guidance to other AML team members and making them understand the actual monitoring standards and parameters to detect fraudulent activities. He has to make sure that all AML procedures are followed as per the general standards set by the financial institution and the regulators.
- Instructing money laundering monitoring team to keep a close watch on the suspicious or unusual transactions and implementing accurate steps before taking the matter for further investigation. It is all about accuracy and investigating the risks and alerts generated through a system. He has to review all the relevant reports.
4.Getting in touch with Customer Due Diligence team if any suspicious transaction has been detected and getting more information about that customer such as their past monetary transactions, banking history etc. He can request the bank to have an Enhanced Due Diligence of that customer in order to get things more clear before making a decision.
- If a system is getting outdated, AML officer can request for replacement of that particular system and opt for more advanced applications and solutions.
- Documenting all those fraudulent cases to present a strong justification that something unusual and fraudulent has taken place.
- He is an essential part of the team during auditing process.
- Conducting periodic training on anti-money laundering policies and procedures.