what is an aml surveillance analyst

ns. Whether or not an AML compliance officer is registered with, or an employee of, the firm, an AML compliance officer is an associated person of the firm. (See FINRA Rule 3310; NASD Notice to Members 02-80, fn.5; NASD Notice to Members 06-07 .)

Anti Money Laundering FAQ

"Anti Money Laundering FAQFor further information on Anti-Money Laundering requirements, please visit the FINRA Anti-Money Laundering web page. General Requirements1. What is an AML Compliance Program required to have? The Bank Secrecy Act, among other things, requires financial institutions, including broker-dealers, to develop and implement AML compliance programs. Members are also governed by the anti-money laundering rule in FINRA Rule 3310. FINRA Rule 3310 sets forth minimum standards for broker-dealers' AML compliance programs.

It requires firms to develop and implement a written AML compliance program. The program has to be approved in writing by a member of senior management and be reasonably designed to achieve and monitor the member's ongoing compliance with the requirements of the Bank Secrecy Act and the implementing regulations promulgated thereunder.

Consistent with the Bank Secrecy Act, FINRA Rule 3310 also requires firms, at a minimum, to:establish and implement policies and procedures that can be reasonably expected to detect and cause the reporting of suspicious transactions;establish and implement policies, procedures, and internal controls reasonably designed to achieve compliance with the Bank Secrecy Act and implementing regulations;provide for annual (on a calendar-year basis) independent testing for compliance to be conducted by member personnel or by a qualified outside party.

If the firm does not execute transactions with customers or otherwise hold customer accounts or act as an introducing broker with respect to customer accounts (e.g.

engages solely in proprietary trading or conducts business only with other broker-dealers), the independent testing is required every two years (on a calendar-year basis);designate and identify to FINRA (by name, title, mailing address, e-mail address, telephone number, and facsimile number) an individual or individuals responsible for implementing and monitoring the day-to-day operations and internal controls of the program. Such individual or individuals are associated persons of the firm with respect to functions undertaken on behalf of the firm.

Each member must review and, if necessary, update the information regarding a change to its AML compliance person within 30 days following the change and verify such information within 17 business days after the end of each calendar year.2. Are all broker-dealers subject to the Bank Secrecy Act? Yes. The Bank Secrecy Act applies to all broker-dealers.

There are no exceptions. Firms should recognize, however, that AML compliance programs can and should be tailored to fit their business and risks, considering factors such as size, location, business activities, the types of accounts they maintain, and the types of transactions in which their customers engage.3.

FINRA Rule 3310 requires that a firm's AML program be approved in writing by a member of senior management. Does a member of senior management also have to approve any subsequent material changes to the AML program?

Yes. A member of senior management should approve any subsequent material changes to the firm's AML program. Additionally, if there is a change in senior management, the AML program should be re-approved by the new management.

Designation of an AML Compliance Person4. Does the AML compliance person have to be a registered principal? Neither the Bank Secrecy Act nor FINRA Rule 3310 requires AML compliance persons to register either as representatives or principals. Nevertheless, our general registration requirements state that persons who engage in the investment banking or securities business for a member need to register.

NASD rules clarify that the activities triggering registration include the functions of supervision, solicitation, or conduct of business in securities, or the training of persons associated with a member for any of these functions.

Thus, instructing registered persons on the use of suspicious activity reports would not alone trigger registration requirements, but instructing registered persons on particular securities products could trigger registration requirements.

Firms should carefully review NASD Rules 1021 and 1031 and consider the activities conducted by the AML compliance person in determining whether he or she must register. Please note that while the AML compliance person is not required to be a registered person solely as a result of serving that function, FINRA anticipates that most AML compliance persons will be registered perso

5. What information do members have to provide regarding their AML compliance person, and how should this information be provided to FINRA? Members are required to provide to FINRA the name, title, mailing address, email address, telephone number, and facsimile number of the AML compliance person. FINRA Rule 3310.02 requires members to review and, if necessary, update their emergency contact information in the manner prescribed by NASD Rule 1160. NASD Rule 1160 requires firms, via the FINRA Contact System, to update designated contact information promptly upon any material change (but no later than 30 days following the change) and verify such information within 17 business days after the end of each calendar year.

FINRA is collecting the contact information through the FINRA Contact System (FCS) available on the FINRA website. Customer Identification Program Requirements6. Have the customer identification requirements for opening a DVP account been established?

Customer identification requirements in 31 CFR 1023.220 apply to all customers opening a new account as those terms are defined in the Bank Secrecy Act and implementing regulations, including DVP accounts. Firms may use documentary, non-documentary or a combination of both methods to verify the identity of DVP accounts.

The documents that may be used can vary widely including, but not limited to, certified articles of incorporation, government-issued business licenses, partnership agreements, or trust formation records. Some firms use outside vendors to conduct non-documentary verification on DVP accounts. Depending on the nature of the account and the risks associated with it, firms may conduct additional due diligence on these types of accounts and obtain information on the beneficial owners.

See Fin CEN’s Guidance on Obtaining and Retaining Beneficial Ownership Information and SIFMA’s suggested due diligence practices for hedge funds for additional information.7. What are the CIP rule's recordkeeping requirements? A CIP must include procedures for making and maintaining a record of all information obtained to verify a customer's identity. At a minimum, the record must include all the identifying information gathered by the firm about a customer.

With regard to verification, a firm's records must contain a description of any document that was relied on to verify the customer's identity, noting the type of document, any identification number contained in the document, the place of issuance, and, if any, the date of issuance and expiration date.

With respect to non-documentary verification, the rule requires that records contain a description of the methods and the results of any measures undertaken to verify the identity of a customer.

Finally, the rule requires, with respect to any method of verification chosen, a description of the resolution of each substantive discrepancy discovered when verifying the identifying information obtained. (See NASD Notice to Members 03-34 . )8. How long must a firm retain customer identification records?

A broker-dealer must retain records of all of the identification information obtained from the customer for five years after the account is closed. In addition, records made about information that verifies a customer's identity only have to be retained for five years after the record is made.

In all other respects, the records must be maintained pursuant to the provisions of SEC Rule 17a-4.

(See NASD Notice to Members 03-34 . )9. How is ""account"" defined in the CIP rule? The final rule defines an ""account"" as a formal relationship with a broker/dealer established to effect transactions in securities, including, but not limited to, the purchase or sale of securities, securities loaned and borrowed activity, and the holding of securities or other assets for safekeeping or as collateral.

Importantly, the final rule contains two exclusions from the definition of ""account."" The definition excludes: (a) an account that the broker/dealer acquires through any acquisition, merger, purchase of assets, or assumption of liabilities; and (b) an account opened for the purpose of participating in an employee benefit plan established under the Employee Retirement Income Security Act of 1974 (""ERISA"").

The Adopting Release explains that in acquisitions, mergers, purchases of assets, or assumptions of liabilities, customers do not initiate these transfers and, therefore, the accounts do not fall within the scope of Section 326 of the USA PATRIOT Act.

In addition, transfers of accounts that result from an introducing broker/dealer changing its clearing firm would fall within this exclusion. As initially proposed, the definition of ""account"" contained several examples of types of accounts that would be covered including cash accounts, margin accounts, prime brokerage accounts, and accounts established to engage in securities repurchase transactions. The Adopting Release notes that these types of accounts remain ""accounts"" for purposes of the final rule, but the final rule does not specifically include them as examples to clarify that the list is not exhaustive.

(See NASD Notice to Members 03-34 and the Adopting Release for the broker-dealer CIP rule.)10. Who is a ""customer"" for purposes of the CIP rule? The CIP rule defines ""customer"" as: (a) a person that opens a new account; and (b) an individual who opens a new account for an individual who lacks legal capacity or for an entity that is not a legal person.

Under this definition, ""customer"" does not refer to persons who fill out account opening paperwork or who provide information necessary to set up an account, if such persons are not the accountholder as well.

Fin CEN has also determined that a fully-disclosed introduced account is not a customer of the clearing firm for CIP purposes so long as the firms enter into a clearing agreement under which the functions of opening and approving customer accounts and directly receiving and accepting orders from the introduced customer will be allocated exclusively to the introducing firm and the function of extending credit, safeguarding funds and securities and issuing confirmations and statements will be allocated to the clearing firm. The introducing broker is a customer of the clearing firm, although a registered US broker-dealer is exempt from CIP. However, the clearing firm should perform due diligence to determine the risk of its introducing brokers.

In addition, clearing firms still have responsibility to identify, monitor and report suspicious activity of its introducing brokers and introduced accounts See Fin CEN guidance FIN-2008-G002 (March 4, 2008).11. What are the CIP requirements if the customer is a trust or omnibus account? A broker-dealer is generally not required to look through a trust or similar account to its beneficiaries, and is required only to verify the identity of the named accountholder.

Similarly, with respect to an omnibus account established by an intermediary, a broker-dealer is generally not required to look through the intermediary to the underlying beneficial owners, if the intermediary is identified as the accountholder.

However, a broker-dealer’s AML program must be risk based. If an account, even an omnibus or a trust account, is determined to be higher risk, the firm may require additional information, including identification of the beneficial owners of the account to mitigate that risk.

Certain types of private banking accounts for non U. S. persons also require a firm to obtain information on the account's beneficial owners. (See Guidance from the Staffs of the Department of the Treasury and the U. S. Securities and Exchange Commission, October 1, 2003 and 31 CFR 1010.620 and Fin CEN's Joint Guidance on Obtaining and Retaining Beneficial Ownership Information .

)12. Is it appropriate to rely on the fact that a potential customer is a personal acquaintance of a registered representative to meet identity verification obligations? No. The Adopting Release states that it would be inappropriate to provide special treatment to personal acquaintances.

In addition, the Adopting Release notes that the rule is sufficiently flexible to make identity verification for personal acquaintances as unobtrusive as possible.13. Is there a requirement to verify the identity of those with trading authority over an account? The CIP rule does not include persons with trading authority over accounts in the definition of ""customer.""

Accordingly, the broker/dealer does not have to verify those individuals' identities. However, the rule recognizes that situations may arise where a broker/dealer will have to take extra steps to verify the identity of those with trading authority.

In these instances, a CIP is required to address situations where the broker/dealer will take additional steps to verify the identity of a customer that is not an individual by seeking information about individuals with authority or control over the account in order to verify the customer's identity.

(See 31 CFR 1023.220 (a) (2) (ii) (C).) Additionally, the broker/dealer must consider FINRA Rule 4512 (a) (1) (E) in that if the customer is a corporation, partnership or other legal entity, the names of any persons authorized to transact business on behalf of the entity must be obtained.14.

Can a firm rely on the performance by another financial institution for some or all of the elements of a firm's CIP?

The CIP rule acknowledges that there may be circumstances in which a firm may be able to rely on the performance by another financial institution of some or all of the elements of a firm's CIP.

Therefore, the rule provides that a CIP may include procedures specifying when the broker/dealer will rely on the performance by another financial institution (including an affiliate) of any procedures of the broker/dealer's CIP, with respect to any customer of the broker/dealer that is opening an account or has established an account or similar business relationship with the other financial institution to provide or engage in services, dealings, or other financial transactions.

In order for a broker-dealer to rely on another financial institution, the following requirements must be met: Reliance must be reasonable under the circumstances. The other financial institution must be subject to a rule implementing the anti-money laundering compliance program requirements of the Bank Secrecy Act and be regulated by a Federal functional regulator.

The other financial institution must enter into a contract requiring it to certify annually to the broker-dealer that it has implemented its anti-money laundering program, and that it will perform (or its agent will perform) specified requirements of the broker-dealer's CIP.

The Adopting Release notes that the contract and certification will provide a standard means for a firm to demonstrate the extent to which it is relying on another financial institution to perform its CIP, and that the other institution has agreed to perform those functions.

If it is not clear from these documents, a broker/dealer must be able to otherwise demonstrate when it is relying on another financial institution to perform its CIP with respect to a particular customer. A broker/dealer will not be held responsible for the failure of the other financial institution to fulfill adequately the broker/dealer's CIP responsibilities, provided that the broker/dealer has complied with the requirements above.

If they do not, then the broker/dealer remains solely responsible for applying its own CIP to each customer in accordance with the rule.

(See NASD Notice to Members 03-34 and the Adopting Release for the broker-dealer CIP rule. )Notwithstanding the requirement that the other financial institution must be subject to the BSA, the SEC staff has provided no-action relief to firms who rely on registered investment advisers provided the other requirements of the CIP rule are met.

On January 11, 2013, the no-action position was extended for an additional two years. Specifically, the conditions in paragraph (b) (6) of the CIP Rule have to be met AND the adviser has to agree in the contract that it will promptly""disclose to the broker-dealer potentially suspicious or unusual activity detected as part of the CIP being performed on the broker-dealer’s behalf in order to enable the broker-dealer to file a SAR, as appropriate based on the broker-dealer’s judgment” and“provide its books and records relating to its performance of CIP” to the SEC, an SRO with jurisdiction (e.g., FINRA), or authorized law enforcement agencies at their request.

The current No-Action letter extends the previous letter and grants relief until January 10, 2015.

It can be accessed at http://www.sec.gov/divisions/marketreg/mr-noaction/2013/sifma011113-17a-8.pdf.15. What is a ""reasonable time"" to verify customers' identities before or after the customer's account is opened? The term ""reasonable time"" is not defined by the rule. The Adopting Release emphasizes that broker-dealers must reasonably exercise the flexibility to undertake verification before or after an account is opened.

The amount of time may depend on various factors, which are part of a firm's risk assessment.16. Are there situations where firms may need to implement additional verification steps?

The CIP rule includes a provision regarding additional verification for certain customers. The Adopting Release explains that, while firms may be able to verify the majority of customers adequately through documentary and non-documentary methods, there may be instances where those methods are inadequate.

The risk that a firm may not know the customer's true identity may be heightened for certain types of accounts, such as an on-line account, an account opened in the name of a corporation, partnership, or trust that is created or conducts substantial business in a jurisdiction that has been designated by the U. S. as a primary money laundering concern or has been designated as non-cooperative by an international body, or a tax haven.

Treasury and the SEC emphasize that a firm must take further steps to identify customers that pose a heightened risk of not being properly identified. A firm's CIP must include additional measures that may be used to obtain information about the identity of the individuals associated with the customer when standard documentary methods prove to be insufficient.

For example, the rule (31 CFR 1023.220 (a) (2) (ii) (C)) requires that a CIP address situations where, based on the broker-dealer's risk assessment of a new account opened by a customer that is not an individual, the broker-dealer will obtain information about individuals with authority or control over such account. This verification method applies only when the broker-dealer cannot verify the customer's true identity using documentary and non-documentary verification methods. In addition, a broker-dealer should consider obtaining information concerning the beneficial owners of higher risk accounts.

(See NASD Notice to Members 03-34 , the Adopting Release for the broker-dealer CIP rule, and Joint Guidance on Obtaining and Retaining Beneficial Ownership Information ).17. How does risk assessment fit into a firm's CIP? The appropriate procedures for the verification aspect of a CIP are governed by a risk-based assessment. A CIP must include risk-based procedures for verifying the identity of each customer to the extent reasonable and practicable.

The procedures must be based on the broker-dealer's assessment of the relevant risks, including those presented by the various types of accounts maintained by the broker-dealer, the various methods of opening accounts, the various types of identifying information available and the broker-dealer's size, location and customer base.

Treasury and the SEC recommend that firms analyze whether there is a logical consistency between the identifying information provided, such as the customer's name, street address, zip code, telephone number (if provided), date of birth, and Social Security number (e.g., zip code and city/state are consistent).18. Is there a regulation or guidance that requires member firms to obtain information on the source of account funding?

For example, for entity accounts, such as a foundation, charity, or non-profit, would regulators expect to see member firms document the source of funds as part of its CIP requirements or general account due diligence, or would this be a best practice based on the firm's risk assessment of the account/entity?

In order to implement a properly risk-based AML compliance program, a member firm may document the source of funds as part of general account due diligence based on the firm’s risk assessment of the account or the entity.

Except in the case of private banking accounts, there is no specific regulation or guidance that requires member firms to obtain information on the source of account funding. For private banking accounts established for non-U. S. persons, which are specifically defined in the Bank Secrecy Act as accounts with a $1,000,000 minimum aggregate deposit requirement and the assignment of a liaison for the account, the member firm must “ascertain the source (s) of funds deposited into a private banking account and the purpose and expected use of the account.” See 31 CFR 1010.620.19.

How can we obtain the Customer Identification Program Notice in card form? FINRA has produced a Customer Identification Program Notice to assist members in fulfilling the notification requirement in the CIP Rule. This Notice replaces the NASD AML Statement Stuffer that many firms have distributed to their customers. FINRA will print the Notice in bulk at the member's cost. Visit our AML web page for information on how to order the Notice. Suspicious Activity Reporting20. Are there any exceptions from the SAR reporting requirement? Yes.

The rule contains three exceptions from reporting violations otherwise reported to various law enforcement authorities.

They are:a robbery or burglary that is reported by the broker-dealer to appropriate law enforcement authorities;lost, missing, counterfeit, or stolen securities that are reported by the broker-dealer pursuant to Rule 17f-1 under the Securities Exchange Act of 1934; anda violation of the federal securities laws or rules of a self-regulatory organization by the broker-dealer, its officers, directors, employees, or registered representatives, that is reported appropriately to the SEC or a self-regulatory organization (""SRO""), except for a violation of Rule 17a-8 under the Securities Exchange Act of 1934, which must be reported on Form SAR-SF.

(See NASD Notice to Members 02-47 . )21. Should broker-dealers reject 3rd party wires? If not, what due diligence should be followed before accepting them?

There is no requirement that broker-dealers reject 3rd party wires; however, NASD Rule 3012 (a) (2) (B) (i) requires that firms have procedures that are reasonably designed to review and monitor all transmittals of funds (e.g.

wires or checks, etc.) or securities from customers to third party accounts, outside entities, locations other than a customer's primary residence as well as between customers and registered representatives. See the full text of the Rule for further details. Additionally, third party wires and journals are identified as possible money laundering ""red flags"" in NASD Notice to Members 02-21 .

These types of red flags may warrant additional due diligence by the broker-dealer before proceeding with the transaction. The broker-dealer's AML procedures should address these types of red flags, how red flags will be detected, and what due diligence and actions will be performed if such red flags are detected.

The broker-dealer should maintain evidence of any due diligence performed. There is not any specific due diligence required, so the broker-dealer should assess the risk of the customer and the transaction and conduct appropriate due diligence to determine whether or not the transaction is suspicious and thus reportable on a SAR-SF. Examples of due diligence could include, but not be limited to, contacting the customer, getting a signed Letter of Authorization from the customer, and/or obtaining a written statement from the customer regarding the reason for the third party wire.

If the customer's explanation is not reasonable or does not make business sense, the broker-dealer may want to consider whether they are comfortable with the risk associated with the transaction and whether it should file a SAR-SF.22. Can an introducing or clearing firm be relieved of AML obligations to the extent that the other is monitoring for suspicious activities?

No. While a clearing firm can provide tools to help the introducing firm monitor its accounts for potential suspicious activity, all broker-dealers have an independent responsibility to comply with the suspicious activity reporting requirements. Introducing and clearing firms are both responsible for filing SARs for suspicious transactions ""conducted or attempted by, at, or through"" the firm.

Introducing and clearing brokers involved in the same transaction may, but are not required to, file a SAR jointly as long as it includes all relevant facts about the transactions and is otherwise permissible under the law.

For example, a SAR-SF filed by the clearing firm in which the introducing broker is the subject could not be shared.

OFAC23. Are there any tools available to help my firm search the U. S. Treasury's Office of Foreign Asset Control's (OFAC) ""Specially Designated Nationals and Blocked Persons"" (SDN) list? FINRA offers a method of searching the OFAC SDN list. The FINRA OFAC Search Tool is one option for members to consider using to comply with OFAC economic sanctions.

The search tool also includes the Palestinian Legislative Council List. For further information regarding your obligations under the OFAC regulations, please consult the OFAC website.

Specific securities industry guidance from OFAC can be found at the following links: Risk Factors for OFAC Compliance in the Securities Industry Opening Securities and Futures Accounts from an OFAC Perspective OFAC Compliance in the Securities and Investment Sector, Journal of Investment Compliance, September 2012There are many other services available offering search capabilities. "

Anti-money laundering (AML) is a term mainly used in the financial and legal industries to describe the legal controls that require financial institutions and other regulated entities to prevent, detect, and report money laundering activities.

Money laundering

"Money laundering From Wikipedia, the free encyclopedia (Redirected from Anti-money laundering)navigation search""Dirty money"" redirects here. For other uses, see Dirty Money (disambiguation). Money laundering is the act of concealing the transformation of profits from illegal activities and corruption into ostensibly ""legitimate"" assets.

[1] The dilemma of illicit activities is accounting for the origin of the proceeds of such activities without raising the suspicion of law enforcement agencies. Accordingly, considerable time and effort is put into devising strategies which enable the safe use of those proceeds without raising unwanted suspicion.

Implementing such strategies is generally called money laundering. After money has been suitably laundered or “cleaned”, it can be used in the mainstream economy for accumulation of wealth, such as acquisitions of properties, or otherwise spent. Law enforcement agencies of many jurisdictions have set up sophisticated systems in an effort to detect suspicious transactions or activities, and many have set up international cooperative arrangements to assist each other in these endeavours.

In a number of legal and regulatory systems, the term ""money laundering"" has become conflated with other forms of financial and business crime, and is sometimes used more generally to include misuse of the financial system (involving things such as securities, digital currencies, credit cards, and traditional currency), including terrorism financing and evasion of international sanctions.

[2] Most anti-money laundering laws openly conflate money laundering (which is concerned with source of funds) with terrorism financing (which is concerned with destination of funds) when regulating the financial system. [3]Some countries treat obfuscation of sources of money as also constituting money laundering, whether it is intentional or by merely using financial systems or services that do not identify or track sources or destinations.

Other countries define money laundering in such a way as to include money from activity that would have been a crime in that country, even if the activity was legal where the actual conduct occurred.

[4]Contents [ hide ]1 History2 Definition3 Methods4 Magnitude5 Electronic money6 Reverse money laundering7 Combating7.1 Criminalization7.2 The role of financial institutions7.3 Value of enforcement costs and associated privacy concerns7.4 Global organizations8 Anti-money-laundering measures by region8.1 Afghanistan8.2 Australia8.3 Bangladesh8.4 Canada8.5 European Union8.6 India8.7 Singapore8.8 United Kingdom8.8.1 Bureaux de change8.9 South Africa8.10 United States8.10.1 Preventive8.10.2 Criminal sanctions9 Notable cases10 Digital money and Money laundering11 See also12 Further reading13 References14 External links History [ edit]The concept of money laundering regulations goes back to ancient times and is intertwined with the development of money and banking.

Money laundering is first seen with individuals hiding wealth from the state to avoid taxation or confiscation or a combination of both. In China, merchants around 2000 BCE would hide their wealth from rulers who would simply take it from them and banish them. In addition to hiding it, they would move it and invest it in businesses in remote provinces or even outside China.

[5]Over the millennia many rulers and states imposed rules that would take wealth from their citizens and this led to the development of offshore banking and tax evasion.

One of the enduring methods has been the use of parallel banking or Informal value transfer systems such as hawala that allowed people to move money out of the country avoiding state scrutiny. In the 20th century, the seizing of wealth again became popular when it was seen as an additional crime prevention tool.

The first time was during the period of Prohibition in the United States during the 1930s. This saw a new emphasis by the state and law enforcement agencies to track and confiscate money. Organized crime received a major boost from Prohibition and a large source of new funds that were obtained from illegal sales of alcohol.

In the 1980s, the war on drugs led governments again to turn to money-laundering rules in an attempt to seize proceeds of drug crimes in order to catch the organizers and individuals running drug empires.

It also had the benefit from a law enforcement point of view of turning rules of evidence upside down. Law enforcers normally have to prove an individual is guilty to get a conviction. But with money laundering laws, money can be confiscated and it is up to the individual to prove that the source of funds is legitimate if they want the funds back.

This makes it much easier for law enforcement agencies and provides for much lower burdens of proof. The September 11 attacks in 2001, which led to the Patriot Act in the US and similar legislation worldwide, led to a new emphasis on money laundering laws to combat terrorism financing.

[6] The Group of Seven (G7) nations used the Financial Action Task Force on Money Laundering to put pressure on governments around the world to increase surveillance and monitoring of financial transactions and share this information between countries.

Starting in 2002, governments around the world upgraded money laundering laws and surveillance and monitoring systems of financial transactions. Anti money laundering regulations have become a much larger burden for financial institutions and enforcement has stepped up significantly.

During 2011–2015 a number of major banks faced ever-increasing fines for breaches of money laundering regulations. This included HSBC, which was fined $1.9 billion in December 2012, and BNP Paribas, which was fined $8.9 billion in July 2014 by the US government.

[7] Many countries introduced or strengthened border controls on the amount of cash that can be carried and introduced central transaction reporting systems where all financial institutions have to report all financial transactions electronically. For example, in 2006, Australia set up the AUSTRAC system and required the reporting of all financial transactions. [8]Definition [ edit]Placing ""dirty"" money in a service company, where it is layered with legitimate income and then integrated into the flow of money, is a common form of money laundering.

The conversation or transfer of property, the concealment or disguising of the nature of the proceeds, the acquisition, possession or use of property, knowing that these are derived from criminal activity and participate or assist the movement of funds to make the proceeds appear legitimate is money laundering.

Money obtained from certain crimes, such as extortion, insider trading, drug trafficking, and illegal gambling is ""dirty"" and needs to be ""cleaned"" to appear to have been derived from legal activities, so that banks and other financial institutions will deal with it without suspicion. Money can be laundered by many methods which vary in complexity and sophistication. Money laundering involves three steps: The first involves introducing cash into the financial system by some means (""placement""); the second involves carrying out complex financial transactions to camouflage the illegal source of the cash (""layering""); and finally, acquiring wealth generated from the transactions of the illicit funds (""integration"").

Some of these steps may be omitted, depending upon the circumstances. For example, non-cash proceeds that are already in the financial system would not need to be placed.

[9]According to the United States Treasury Department: Money laundering is the process of making illegally-gained proceeds (i.e., ""dirty money"") appear legal (i.e., ""clean""). Typically, it involves three steps: placement, layering, and integration. First, the illegitimate funds are furtively introduced into the legitimate financial system. Then, the money is moved around to create confusion, sometimes by wiring or transferring through numerous accounts.

Finally, it is integrated into the financial system through additional transactions until the ""dirty money"" appears ""clean."" [10]Methods [ edit]Money laundering can take several forms, although most methods can be categorized into one of a few types.

These include ""bank methods, smurfing [also known as structuring], currency exchanges, and double-invoicing"". [11]Structuring: Often known as smurfing, this is a method of placement whereby cash is broken into smaller deposits of money, used to defeat suspicion of money laundering and to avoid anti-money laundering reporting requirements.

A sub-component of this is to use smaller amounts of cash to purchase bearer instruments, such as money orders, and then ultimately deposit those, again in small amounts.

[12]Bulk cash smuggling: This involves physically smuggling cash to another jurisdiction and depositing it in a financial institution, such as an offshore bank, with greater bank secrecy or less rigorous money laundering enforcement. [13]Cash-intensive businesses: In this method, a business typically expected to receive a large proportion of its revenue as cash uses its accounts to deposit criminally derived cash. Such enterprises often operate openly and in doing so generate cash revenue from incidental legitimate business in addition to the illicit cash – in such cases the business will usually claim all cash received as legitimate earnings.

Service businesses are best suited to this method, as such enterprises have little or no variable costs and/or a large ratio between revenue and variable costs, which makes it difficult to detect discrepancies between revenues and costs.

Examples are parking structures, strip clubs, tanning salons, car washes, arcades, bars, restaurants, and casinos. Trade-based laundering: This involves under- or over-valuing invoices to disguise the movement of money. [14]Shell companies and trusts: Trusts and shell companies disguise the true owners of money. Trusts and corporate vehicles, depending on the jurisdiction, need not disclose their true owner.

Sometimes referred to by the slang term rathole, though that term usually refers to a person acting as the fictitious owner rather than the business entity. [15] [16]Round-tripping: Here, money is deposited in a controlled foreign corporation offshore, preferably in a tax haven where minimal records are kept, and then shipped back as a foreign direct investment, exempt from taxation. A variant on this is to transfer money to a law firm or similar organization as funds on account of fees, then to cancel the retainer and, when the money is remitted, represent the sums received from the lawyers as a legacy under a will or proceeds of litigation.

[16]Bank capture: In this case, money launderers or criminals buy a controlling interest in a bank, preferably in a jurisdiction with weak money laundering controls, and then move money through the bank without scrutiny.

Casinos: In this method, an individual walks into a casino and buys chips with illicit cash. The individual will then play for a relatively short time. When the person cashes in the chips, they will expect to take payment in a check, or at least get a receipt so they can claim the proceeds as gambling winnings.

[13]Other gambling: Money is spent on gambling, preferably on high odds games. One way to minimize risk with this method is to bet on every possible outcome of some event that has many possible outcomes, so no outcome (s) have short odds, and the bettor will lose only the vigorish and will have one or more winning bets that can be shown as the source of money.

The losing bets will remain hidden. Real estate: Someone purchases real estate with illegal proceeds and then sells the property.

[16] To outsiders, the proceeds from the sale look like legitimate income. Alternatively, the price of the property is manipulated: the seller agrees to a contract that underrepresents the value of the property, and receives criminal proceeds to make up the difference. [15]Black salaries: A company may have unregistered employees without written contracts and pay them cash salaries. Dirty money might be used to pay them. [17]Tax amnesties: For example, those that legalize unreported assets and cash in tax havens. [18]Life insurance business: Assignment of policies to unidentified third parties and for which no plausible reasons can be ascertained.

Magnitude [ edit]Many regulatory and governmental authorities issue estimates each year for the amount of money laundered, either worldwide or within their national economy.

In 1996, a spokesperson for the IMF estimated that 2–5% of the worldwide global economy involved laundered money [19]. The Financial Action Task Force on Money Laundering (FATF), an intergovernmental body set up to combat money laundering, stated, ""Overall, it is absolutely impossible to produce a reliable estimate of the amount of money laundered and therefore the FATF does not publish any figures in this regard."" [20] Academic commentators have likewise been unable to estimate the volume of money with any degree of assurance.

[9] Various estimates of the scale of global money laundering are sometimes repeated often enough to make some people regard them as factual—but no researcher has overcome the inherent difficulty of measuring an actively concealed practice.

Regardless of the difficulty in measurement, the amount of money laundered each year is in the billions of US dollars and poses a significant policy concern for governments. [9] As a result, governments and international bodies have undertaken efforts to deter, prevent, and apprehend money launderers.

Financial institutions have likewise undertaken efforts to prevent and detect transactions involving dirty money, both as a result of government requirements and to avoid the reputational risk involved. Issues relating to money laundering have existed as long as there have been large scale criminal enterprises.

Modern anti-money laundering laws have developed along with the modern War on Drugs. [21] In more recent times anti-money laundering legislation is seen as adjunct to the financial crime of terrorist financing in that both crimes usually involve the transmission of funds through the financial system (although money laundering relates to where the money has come from, and terrorist financing relating to where the money is going to ).

Electronic money [ edit]In theory, electronic money should provide as easy a method of transferring value without revealing identity as untracked banknotes, especially wire transfers involving anonymity-protecting numbered bank accounts.

In practice, however, the record-keeping capabilities of Internet service providers and other network resource maintainers tend to frustrate that intention. While some cryptocurrencies under recent development have aimed to provide for more possibilities of transaction anonymity for various reasons, the degree to which they succeed—and, in consequence, the degree to which they offer benefits for money laundering efforts—is controversial.

Solutions such as ZCash and Monero are examples of cryptocurrencies that provide unlinkable anonymity via proofs and/or obfuscation of information ( Ring signatures ).

Such currencies could find use in online illicit services. In 2013, Jean-Loup Richet, a research fellow at ESSEC ISIS, surveyed new techniques that cybercriminals were using in a report written for the United Nations Office on Drugs and Crime. [22] A common approach was to use a digital currency exchanger service which converted dollars into a digital currency called Liberty Reserve, and could be sent and received anonymously.

The receiver could convert the Liberty Reserve currency back into cash for a small fee. In May 2013, the US authorities shut down Liberty Reserve charging its founder and various others with money laundering. [23]Another increasingly common way of laundering money is to use online gaming. In a growing number of online games, such as Second Life and World of Warcraft, it is possible to convert money into virtual goods, services, or virtual cash that can later be converted back into money.

[24]Reverse money laundering [ edit]Reverse money laundering is a process that disguises a legitimate source of funds that are to be used for illegal purposes.

[25] It is usually perpetrated for the purpose of financing terrorism [26] but can be also used by criminal organizations that have invested in legal businesses and would like to withdraw legitimate funds from official circulation.

Unaccounted cash received via disguising financial transactions is not included in official financial reporting and could be used to evade taxes, hand in bribes and pay “under-the-table” salaries.

[27] For example, in an affidavit filed 24 March 2014 in United States District Court, Northern California, San Francisco Division, FBI special agent Emmanuel V. Pascau alleged that several people associated with the Chee Kung Tong organization, and California State Senator Leland Yee, engaged in reverse money laundering activities. The problem of such fraudulent encashment practices ( obnalichka in Russian) has become acute in Russia and other countries of the former Soviet Union. The Eurasian Group on Combating Money Laundering and Financing of Terrorism (EAG) reported that the Russian Federation, Ukraine, Turkey, Serbia, Kyrgyzstan, Uzbekistan, Armenia and Kazakhstan have encountered a substantial shrinkage of tax base and shifting money supply balance in favor of cash. These processes have complicated planning and management of the economy and contributed to the growth of the shadow economy. [28]Combating [ edit]

Anti-money laundering (AML) is a term mainly used in the financial and legal industries to describe the legal controls that require financial institutions and other regulated entities to prevent, detect, and report money laundering activities.

Anti-money laundering guidelines came into prominence globally as a result of the formation of the Financial Action Task Force (FATF) and the promulgation of an international framework of anti-money laundering standards. [29] These standards began to have more relevance in 2000 and 2001, after FATF began a process to publicly identify countries that were deficient in their anti-money laundering laws and international cooperation, a process colloquially known as "" name and shame "".

[30] [31]An effective AML program requires a jurisdiction to criminalise money laundering, giving the relevant regulators and police the powers and tools to investigate; be able to share information with other countries as appropriate; and require financial institutions to identify their customers, establish risk-based controls, keep records, and report suspicious activities.

[32]Criminalization [ edit]The elements of the crime of money laundering are set forth in the United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances and Convention against Transnational Organized Crime.

It is defined as knowingly engaging in a financial transaction with the proceeds of a crime for the purpose of concealing or disguising the illicit origin of the property from governments. The role of financial institutions [ edit]While banks operating in the same country generally have to follow the same anti-money laundering laws and regulations, financial institutions all structure their anti-money laundering efforts slightly differently. [33] Today, most financial institutions globally, and many non-financial institutions, are required to identify and report transactions of a suspicious nature to the financial intelligence unit in the respective country.

For example, a bank must verify a customer's identity and, if necessary, monitor transactions for suspicious activity. This is often termed as "" know your customer "". This means knowing the identity of the customer and understanding the kinds of transactions in which the customer is likely to engage.

By knowing one's customers, financial institutions can often identify unusual or suspicious behaviour, termed anomalies, which may be an indication of money laundering. [34]Bank employees, such as tellers and customer account representatives, are trained in anti-money laundering and are instructed to report activities that they deem suspicious. Additionally, anti-money laundering software filters customer data, classifies it according to level of suspicion, and inspects it for anomalies.

Such anomalies include any sudden and substantial increase in funds, a large withdrawal, or moving money to a bank secrecy jurisdiction. Smaller transactions that meet certain criteria may also be flagged as suspicious. For example, structuring can lead to flagged transactions. The software also flags names on government ""blacklists"" and transactions that involve countries hostile to the host nation. Once the software has mined data and flagged suspect transactions, it alerts bank management, who must then determine whether to file a report with the government.

Value of enforcement costs and associated privacy concerns [ edit]The financial services industry has become more vocal about the rising costs of anti-money laundering regulation and the limited benefits that they claim it brings.

[35] One commentator wrote that "" [w]ithout facts, [anti-money laundering] legislation has been driven on rhetoric, driving by ill-guided activism responding to the need to be ""seen to be doing something"" rather than by an objective understanding of its effects on predicate crime.

The social panic approach is justified by the language used—we talk of the battle against terrorism or the war on drugs"".

[36] The Economist magazine has become increasingly vocal in its criticism of such regulation, particularly with reference to countering terrorist financing, referring to it as a ""costly failure"", although it concedes that other efforts (like reducing identity and credit card fraud) may still be effective at combating money laundering. [37]There is no precise measurement of the costs of regulation balanced against the harms associated with money laundering, [38] and given the evaluation problems involved in assessing such an issue, it is unlikely that the effectiveness of terror finance and money laundering laws could be determined with any degree of accuracy.

[39] The Economist estimated the annual costs of anti-money laundering efforts in Europe and North America at US$5 billion in 2003, an increase from US$700 million in 2000.

[40] Government-linked economists have noted the significant negative effects of money laundering on economic development, including undermining domestic capital formation, depressing growth, and diverting capital away from development. [41] Because of the intrinsic uncertainties of the amount of money laundered, changes in the amount of money laundered, and the cost of anti-money laundering systems, it is almost impossible to tell which anti-money laundering systems work and which are more or less cost effective.

Besides economic costs to implement anti-money-laundering laws, improper attention to data protection practices may entail disproportionate costs to individual privacy rights. In June 2011, the data-protection advisory committee to the European Union issued a report on data protection issues related to the prevention of money laundering and terrorist financing, which identified numerous transgressions against the established legal framework on privacy and data protection.

[42] The report made recommendations on how to address money laundering and terrorist financing in ways that safeguard personal privacy rights and data protection laws. [43] In the United States, groups such as the American Civil Liberties Union have expressed concern that money laundering rules require banks to report on their own customers, essentially conscripting private businesses ""into agents of the surveillance state"".

[44]Many countries are obligated by various international instruments and standards, such as the 1988 United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, the 2000 Convention against Transnational Organized Crime, the 2003 United Nations Convention against Corruption, and the recommendations of the 1989 Financial Action Task Force on Money Laundering (FATF) to enact and enforce money laundering laws in an effort to stop narcotics trafficking, international organised crime, and corruption. Mexico, which has faced a significant increase in violent crime, established anti-money laundering controls in 2013 to curb the underlying crime issue.

[45]Global organizations [ edit]Formed in 1989 by the G7 countries, the Financial Action Task Force on Money Laundering (FATF) is an intergovernmental body whose purpose is to develop and promote an international response to combat money laundering. The FATF Secretariat is housed at the headquarters of the OECD in Paris. In October 2001, FATF expanded its mission to include combating the financing of terrorism.

FATF is a policy-making body that brings together legal, financial, and law enforcement experts to achieve national legislation and regulatory AML and CFT reforms. As of 2014 its membership consists of 36 countries and territories and two regional organizations.

FATF works in collaboration with a number of international bodies and organizations. [46] These entities have observer status with FATF, which does not entitle them to vote, but permits them full participation in plenary sessions and working groups. [47]FATF has developed 40 recommendations on money laundering and 9 special recommendations regarding terrorist financing.

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. [48] [49]FATF's three primary functions with regard to money laundering are: Monitoring members’ progress in implementing anti-money laundering measures,Reviewing and reporting on laundering trends, techniques, and countermeasures, and Promoting the adoption and implementation of FATF anti-money laundering standards globally.

The FATF currently comprises 34 member jurisdictions and 2 regional organisations, representing most major financial centres in all parts of the globe. The United Nations Office on Drugs and Crime maintains the International Money Laundering Information Network, a website that provides information and software for anti-money laundering data collection and analysis.

[50] The World Bank has a website that provides policy advice and best practices to governments and the private sector on anti-money laundering issues. [51]Anti-money-laundering measures by region [ edit]Many jurisdictions adopt a list of specific predicate crimes for money laundering prosecutions, while others criminalize the proceeds of any serious crimes.

Afghanistan [ edit]This section needs additional citations for verification. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. (November 2011) ( Learn how and when to remove this template message)The Financial Transactions and Reports Analysis Center of Afghanistan (Fin TRACA) was established as a Financial Intelligence Unit (FIU) under the Anti Money Laundering and Proceeds of Crime Law passed by decree late in 2004.

The main purpose of this law is to protect the integrity of the Afghan financial system and to gain compliance with international treaties and conventions.

The Financial Intelligence Unit is a semi-independent body that is administratively housed within the Central Bank of Afghanistan (Da Afghanistan Bank).

The main objective of Fin TRACA is to deny the use of the Afghan financial system to those who obtained funds as the result of illegal activity, and to those who would use it to support terrorist activities. [52]To meet its objectives, the Fin TRACA collects and analyzes information from a variety of sources. These sources include entities with legal obligations to submit reports to the Fin TRACA when a suspicious activity is detected, as well as reports of cash transactions above a threshold amount specified by regulation.

Also, Fin TRACA has access to all related Afghan government information and databases. When the analysis of this information supports the supposition of illegal use of the financial system, the Fin TRACA works closely with law enforcement to investigate and prosecute the illegal activity. Fin TRACA also cooperates internationally in support of its own analyses and investigations and to support the analyses and investigations of foreign counterparts, to the extent allowed by law.

Other functions include training of those entities with legal obligations to report information, development of laws and regulations to support national-level AML objectives, and international and regional cooperation in the development of AML typologies and countermeasures.

Australia [ edit]Australia has adopted a number of strategies to combat money laundering, which mirror those of a majority of western countries.

The Australian Transaction Reports and Analysis Centre ( AUSTRAC) is Australia's financial intelligence unit to combat money laundering and terrorism financing, which requires financial institutions and other 'cash dealers' in Australia to report to it suspicious cash or other transactions and other specific information. The Attorney-General's Department maintains a list of outlawed terror organisations. It is an offense to materially support or be supported by such organisations.

[53] It is an offence to open a bank account in Australia in a false name, [54] and rigorous procedures must be followed when new bank accounts are opened.

The Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) (AML/CTF Act) is the principal legislative instrument, although there are also offence provisions contained in Division 400 of the Criminal Code Act 1995 (Cth).

Upon its introduction, it was intended that the AML/CTF Act would be further amended by a second tranche of reforms extending to designated non-financial businesses and professions (DNFBPs) including, inter alia, lawyers, accountants, jewellers and real estate agents; however, those further reforms have yet to be progressed. The Proceeds of Crime Act 1987 (Cth) imposes criminal penalties on a person who engages in money laundering, and allows for confiscation of property.

The principal objects of the Act are set out in s.3 (1):to deprive persons of the proceeds of, and benefits derived from the commission of offences,to provide for the forfeiture of property used in or in connection with the commission of such offences, andto enable law enforcement authorities to effectively trace such proceeds, benefits and property. [55]Bangladesh [ edit]The first anti-money laundering legislation in Bangladesh was the Money Laundering Prevention Act, 2002. It was replaced by the Money Laundering Prevention Ordinance 2008. Subsequently, the ordinance was repealed by the Money Laundering Prevention Act, 2009.

In 2012, government again replace it with the Money Laundering Prevention Act, 2012 [56]In terms of section 2, ""Money Laundering means – (i) knowingly moving, converting, or transferring proceeds of crime or property involved in an offence for the following purposes:- (1) concealing or disguising the illicit nature, source, location, ownership or control of the proceeds of crime; or (2) assisting any person involved in the commission of the predicate offence to evade the legal consequences of such offence; (ii) smuggling money or property earned through legal or illegal means to a foreign country; (iii) knowingly transferring or remitting the proceeds of crime to a foreign country or remitting or bringing them into Bangladesh from a foreign country with the intention of hiding or disguising its illegal source; or (iv) concluding or attempting to conclude financial transactions in such a manner so as to reporting requirement under this Act may be avoided; (v) converting or moving or transferring property with the intention to instigate or assist for committing a predicate offence; (vi) acquiring, possessing or using any property, knowing that such property is the proceeds of a predicate offence; (vii) performing such activities so as to the illegal source of the proceeds of crime may be concealed or disguised; (viii) participating in, associating with, conspiring, attempting, abetting, instigate or counsel to commit any offences mentioned above.

[57] [58]To prevent these Illegal uses of money, the Bangladesh government has introduced the Money Laundering Prevention Act.

The Act was last amended in the year 2009 and all the financial institutes are following this act. Till today there are 26 circulars issued by Bangladesh Bank under this act. To prevent money laundering, a banker must do the following: While opening a new account, the account opening form should be duly filled up by all the information of the customer.

The KYC must be properly filled. The Transaction Profile (TP) is mandatory for a client to understand his/her transactions. If needed, the TP must be updated at the client's consent. All other necessary papers should be properly collected along with the National ID card. If any suspicious transaction is noticed, the Branch Anti Money Laundering Compliance Officer (BAMLCO) must be notified and accordingly the Suspicious Transaction Report (STR) must be filled out.

The cash department should be aware of the transactions. It must be noted if suddenly a big amount of money is deposited in any account. Proper documents are required if any client does this type of transaction. Structuring, over/ under invoicing is another way to do money laundering. The foreign exchange department should look into this matter cautiously. If any account has a transaction over 1 million taka in a single day, it must be reported in a cash transaction report (CTR).

All bank officials must go through all the 26 circulars and use them. Canada [ edit]In 1991, the Proceeds of Crime (Money Laundering) Act was brought into force in Canada to give legal effect to the former FATF Forty Recommendations by establishing record keeping and client identification requirements in the financial sector to facilitate the investigation and prosecution of money laundering offences under the Criminal Code and the Controlled Drugs and Substances Act. [59]In 2000, the Proceeds of Crime (Money Laundering) Act was amended to expand the scope of its application and to establish a financial intelligence unit with national control over money laundering, namely FINTRAC.

[59]In December 2001, the scope of the Proceeds of Crime (Money Laundering) Act was again expanded by amendments enacted under the Anti-Terrorism Act with the objective of deterring terrorist activity by cutting off sources and channels of funding used by terrorists in response to 9/11.

The Proceeds of Crime (Money Laundering) Act was renamed the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. [59]In December 2006, the Proceeds of Crime (Money Laundering) and Terrorist Financing Act was further amended, in part, in response to pressure from the FATF for Canada to tighten its money laundering and financing of terrorism legislation.

The amendments expanded the client identification, record-keeping and reporting requirements for certain organizations and included new obligations to report attempted suspicious transactions and outgoing and incoming international electronic fund transfers, undertake risk assessments and implement written compliance procedures in respect of those risks.

[59]The amendments also enabled greater money laundering and terrorist financing intelligence-sharing among enforcement agencies. [59]In Canada, casinos, money service businesses, notaries, accountants, banks, securities brokers, life insurance agencies, real estate salespeople and dealers in precious metals and stones are subject to the reporting and record keeping obligations under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.

European Union [ edit]The fourth and latest iteration of the EU’s anti-money laundering directive (AMLD IV) was published on 5 June 2015, after clearing its last legislative stop at the European Parliament. The new directive brings the EU’s anti-money laundering laws more in line with the US’s, which is welcome news for financial institutions that are operating in both jurisdictions.

[60]Lack of harmonization in AML requirements between the US and EU has complicated the compliance efforts of global institutions that are looking to standardize the Know Your Customer (KYC) component of their AML programs across key jurisdictions. AMLD IV promises to better align the AML regimes by adopting a more risk-based approach compared to its predecessor, AMLD III.

[60]Certain components of the directive, however, go beyond current requirements in both the EU and US, imposing new implementation challenges on banks. For instance, more public officials are brought within the scope of the directive, and EU member states are required to establish new registries of “beneficial owners” (i.e., those who ultimately own or control each company) which will impact banks. AMLD IV became effective 25 June 2015. [61]India [ edit]Main article: Prevention of Money Laundering Act, 2002See also: Enforcement Directorate In 2002, the Parliament of India passed an act called the Prevention of Money Laundering Act, 2002.

The main objectives of this act are to prevent money-laundering as well as to provide for confiscation of property either derived from or involved in, money-laundering. [62]Section 12 (1) describes the obligations that banks, other financial institutions, and intermediaries have to (a) Maintain records that detail the nature and value of transactions, whether such transactions comprise a single transaction or a series of connected transactions, and where these transactions take place within a month.

(b) Furnish information on transactions referred to in clause (a) to the Director within the time prescribed, including records of the identity of all its clients.

Section 12 (2) prescribes that the records referred to in sub-section (1) as mentioned above, must be maintained for ten years after the transactions finished. It is handled by the Indian Income Tax Department. The provisions of the Act are frequently reviewed and various amendments have been passed from time to time.

[63] [64]Most money laundering activities in India are through political parties, corporate companies and the shares market. These are investigated by the Enforcement Directorate and Indian Income Tax Department. [65] According to Government of India, out of the total tax arrears of ₹ 2,480 billion (US$38 billion) about ₹ 1,300 billion (US$20 billion) pertain to money laundering and securities scam cases.

[66]Bank accountants must record all transactions over Rs. 1 million and maintain such records for 10 years. Banks must also make cash transaction reports (CTRs) and suspicious transaction reports over Rs. 1 million within 7 days of initial suspicion.

They must submit their reports to the Enforcement Directorate and Income Tax Department. [ citation needed]Singapore [ edit]Singapore ’s legal framework for combating money laundering is contained in a patchwork of legal instruments, [67] the main elements of which are: The Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (CDSA).

[68] This statute criminalises money laundering and imposes the requirement for persons to file suspicious transaction reports (STRs) and make a disclosure whenever physical currency or goods exceeding S$20,000 are carried into or out of Singapore. The Mutual Assistance in Criminal Matters Act (MACMA). [69] This statute sets out the framework for mutual legal assistance in criminal matters.

Legal instruments issued by regulatory agencies (such as the Monetary Authority of Singapore (MAS), [70] in relation to financial institutions (FIs)) imposing requirements to conduct customer due diligence (CDD).

The term ‘money laundering’ is not used as such within the CDSA. Part VI of the CDSA criminalises the laundering of proceeds generated by criminal conduct and drug tracking via the following offences: The assistance of another person in retaining, controlling or using the benefits of drug dealing or criminal conduct under an arrangement (whether by concealment, removal from jurisdiction, transfer to nominees or otherwise) [section 43 (1)/44 (1)].

The concealment, conversion, transfer or removal from the jurisdiction, or the acquisition, possession or use of benefits of drug dealing or criminal conduct [section 46 (1)/47 (1)]. The concealment, conversion, transfer or removal from the jurisdiction of another person’s benefits of drug dealing or criminal conduct [section 46 (2)/47 (2)].

The acquirement, possession or use of another person’s benefits of drug dealing or criminal conduct [section 46 (3)/47 (3)].

United Kingdom [ edit]Money laundering and terrorist funding legislation in the UK is governed by four Acts of primary legislation:-Terrorism Act 2000 [71]Anti-terrorism, Crime and Security Act 2001 [72]Proceeds of Crime Act 2002 [73]Serious Organised Crime and Police Act 2005 [74]Money Laundering Regulations 2007Money Laundering Regulation, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017Money Laundering Regulations are designed to protect the UK financial system, as well as preventing and detecting crime.

If a business is covered by these regulations then controls are put in place to prevent it being used for money laundering. The Proceeds of Crime Act 2002 contains the primary UK anti-money laundering legislation, [75] including provisions requiring businesses within the ""regulated sector"" (banking, investment, money transmission, certain professions, etc.) to report to the authorities suspicions of money laundering by customers or others. [76]Money laundering is broadly defined in the UK.

[77] In effect any handling or involvement with any proceeds of any crime (or monies or assets representing the proceeds of crime) can be a money laundering offence. An offender's possession of the proceeds of his own crime falls within the UK definition of money laundering. [78] The definition also covers activities within the traditional definition of money laundering, as a process that conceals or disguises the proceeds of crime to make them appear legitimate.

[79]Unlike certain other jurisdictions (notably the US and much of Europe), UK money laundering offences are not limited to the proceeds of serious crimes, nor are there any monetary limits. Financial transactions need no money laundering design or purpose for UK laws to consider them a money laundering offence.

A money laundering offence under UK legislation need not even involve money, since the money laundering legislation covers assets of any description. In consequence, any person who commits an acquisitive crime (i.e., one that produces some benefit in the form of money or an asset of any description) in the UK inevitably also commits a money laundering offence under UK legislation.

This applies also to a person who, by criminal conduct, evades a liability (such as a taxation liability)—which lawyers call ""obtaining a pecuniary advantage""—as he is deemed thereby to obtain a sum of money equal in value to the liability evaded.

[77]The principal money laundering offences carry a maximum penalty of 14 years' imprisonment. [80]Secondary regulation is provided by the Money Laundering Regulations 2003, [81] which was replaced by the Money Laundering Regulations 2007.

[82] They are directly based on the EU directives 91/308/EEC, 2001/97/EC and 2005/60/EC. One consequence of the Act is that solicitors, accountants, tax advisers, and insolvency practitioners who suspect (as a consequence of information received in the course of their work) that their clients (or others) have engaged in tax evasion or other criminal conduct that produced a benefit, now must report their suspicions to the authorities (since these entail suspicions of money laundering).

In most circumstances it would be an offence, ""tipping-off"", for the reporter to inform the subject of his report that a report has been made.

[83] These provisions do not however require disclosure to the authorities of information received by certain professionals in privileged circumstances or where the information is subject to legal professional privilege. Others that are subject to these regulations include financial institutions, credit institutions, estate agents (which includes chartered surveyors), trust and company service providers, high value dealers (who accept cash equivalent to €15,000 or more for goods sold), and casinos.

Professional guidance (which is submitted to and approved by the UK Treasury) is provided by industry groups including the Joint Money Laundering Steering Group, [84] the Law Society. [85] and the Consultative Committee of Accountancy Bodies (CCAB). However, there is no obligation on banking institutions to routinely report monetary deposits or transfers above a specified value. Instead reports must be made of all suspicious deposits or transfers, irrespective of their value. The reporting obligations include reporting suspicious gains from conduct in other countries that would be criminal if it took place in the UK.

[86] Exceptions were later added for certain activities legal where they took place, such as bullfighting in Spain. [87]More than 200,000 reports of suspected money laundering are submitted annually to authorities in the UK (there were 240,582 reports in the year ended 30 September 2010.

This was an increase from the 228,834 reports submitted in the previous year). [88] Most of these reports are submitted by banks and similar financial institutions (there were 186,897 reports from the banking sector in the year ended 30 September 2010).

[88]Although 5,108 different organisations submitted suspicious activity reports to the authorities in the year ended 30 September 2010, just four organisations submitted approximately half of all reports, and the top 20 reporting organisations accounted for three-quarters of all reports.

[88]The offence of failing to report a suspicion of money laundering by another person carries a maximum penalty of 5 years' imprisonment. [80]Bureaux de change [ edit]All UK Bureaux de change are registered with Her Majesty's Revenue and Customs, which issues a trading licence for each location.

Bureaux de change and money transmitters, such as Western Union outlets, in the UK fall within the ""regulated sector"" and are required to comply with the Money Laundering Regulations 2007.

[82] Checks can be carried out by HMRC on all Money Service Businesses. South Africa [ edit]In South Africa, the Financial Intelligence Centre Act (2001) and subsequent amendments have added responsibilities to the FSB to combat money laundering. United States [ edit]The approach in the United States to stopping money laundering is usually broken into two areas: preventive (regulatory) measures and criminal measures.

[ citation needed] [89]Preventive [ edit]In an attempt to prevent dirty money from entering the U. S. financial system in the first place, the United States Congress passed a series of laws, starting in 1970, collectively known as the Bank Secrecy Act (BSA).

These laws, contained in sections 5311 through 5332 of Title 31 of the United States Code, require financial institutions, which under the current definition include a broad array of entities, including banks, credit card companies, life insurers, money service businesses and broker-dealers in securities, to report certain transactions to the United States Department of the Treasury. Cash transactions in excess of a certain amount must be reported on a currency transaction report (CTR), identifying the individual making the transaction as well as the source of the cash. The law originally required all transactions of US$ 5,000 or more to be reported, but due to excessively high levels of reporting the threshold was raised to US$10,000.

The U. S. is one of the few countries in the world to require reporting of all cash transactions over a certain limit, although certain businesses can be exempt from the requirement.

[90] Additionally, financial institutions must report transaction on a Suspicious Activity Report (SAR) that they deem ""suspicious"", defined as a knowing or suspecting that the funds come from illegal activity or disguise funds from illegal activity, that it is structured to evade BSA requirements or appears to serve no known business or apparent lawful purpose; or that the institution is being used to facilitate criminal activity.

Attempts by customers to circumvent the BSA, generally by structuring cash deposits to amounts lower than US$10,000 by breaking them up and depositing them on different days or at different locations also violates the law.

[91]The financial database created by these reports is administered by the U. S.'s Financial Intelligence Unit (FIU), called the Financial Crimes Enforcement Network (Fin CEN), located in Vienna, Virginia. The reports are made available to U. S. criminal investigators, as well as other FIU's around the globe, and Fin CEN conducts computer assisted analyses of these reports to determine trends and refer investigations.

[92]The BSA requires financial institutions to engage in customer due diligence, or KYC, which is sometimes known in the parlance as know your customer. This includes obtaining satisfactory identification to give assurance that the account is in the customer's true name, and having an understanding of the expected nature and source of the money that flows through the customer's accounts.

Other classes of customers, such as those with private banking accounts and those of foreign government officials, are subjected to enhanced due diligence because the law deems that those types of accounts are a higher risk for money laundering. All accounts are subject to ongoing monitoring, in which internal bank software scrutinizes transactions and flags for manual inspection those that fall outside certain parameters.

If a manual inspection reveals that the transaction is suspicious, the institution should file a Suspicious Activity Report. [93]The regulators of the industries involved are responsible to ensure that the financial institutions comply with the BSA. For example, the Federal Reserve and the Office of the Comptroller of the Currency regularly inspect banks, and may impose civil fines or refer matters for criminal prosecution for non-compliance.

A number of banks have been fined and prosecuted for failure to comply with the BSA. Most famously, Riggs Bank, in Washington D. C., was prosecuted and functionally driven out of business as a result of its failure to apply proper money laundering controls, particularly as it related to foreign political figures.

[94]In addition to the BSA, the U. S. imposes controls on the movement of currency across its borders, requiring individuals to report the transportation of cash in excess of US$10,000 on a form called Report of International Transportation of Currency or Monetary Instruments (known as a CMIR).

[95] Likewise, businesses, such as automobile dealerships, that receive cash in excess of US$10,000 must file a Form 8300 with the Internal Revenue Service, identifying the source of the cash. [96]On 1 September 2010, the Financial Crimes Enforcement Network issued an advisory on "" informal value transfer systems "" referencing United States v. Banki.

[97]In the United States, there are perceived consequences of anti-money laundering (AML) regulations. These unintended consequences [98] include Fin CEN's publishing of a list of ""risky businesses,"" which many believe unfairly targeted money service businesses. The publishing of this list and the subsequent fall-out, banks indiscriminately de-risking MSBs, is referred to as Operation Choke Point.

The Financial Crimes Enforcement Network issued a Geographic Targeting Order to combat against illegal money laundering in the United States. This means that title insurance companies in the U. S. are required to identify the natural persons behind companies that pay all cash in residential real estate purchases over a particular amount in certain U. S. cities. [99]Criminal sanctions [ edit]Money laundering has been criminalized in the United States since the Money Laundering Control Act of 1986.

The law, contained at section 1956 of Title 18 of the United States Code, prohibits individuals from engaging in a financial transaction with proceeds that were generated from certain specific crimes, known as ""specified unlawful activities"" (SUAs). The law requires that an individual specifically intend in making the transaction to conceal the source, ownership or control of the funds.

There is no minimum threshold of money, and no requirement that the transaction succeeded in actually disguising the money. A ""financial transaction"" has been broadly defined, and need not involve a financial institution, or even a business. Merely passing money from one person to another, with the intent to disguise the source, ownership, location or control of the money, has been deemed a financial transaction under the law. The possession of money without either a financial transaction or an intent to conceal is not a crime in the United States.

[100] Besides money laundering, the law contained in section 1957 of Title 18 of the United States Code, prohibits spending more than US$10,000 derived from an SUA, regardless of whether the individual wishes to disguise it. It carries a lesser penalty than money laundering, and unlike the money laundering statute, requires that the money pass through a financial institution.

[100]According to the records compiled by the United States Sentencing Commission, in 2009, the United States Department of Justice typically convicted a little over 81,000 people; of this, approximately 800 are convicted of money laundering as the primary or most serious charge.

[101] The Anti-Drug Abuse Act of 1988 expanded the definition of financial institution to include businesses such as car dealers and real estate closing personnel and required them to file reports on large currency transaction.

It required verification of identity of those who purchase monetary instruments over $3,000. The Annunzio-Wylie Anti-Money Laundering Act of 1992 strengthened sanctions for BSA violations, required so called ""Suspicious Activity Reports"" and eliminated previously used ""Criminal Referral Forms"", required verification and recordkeeping for wire transfers and established the Bank Secrecy Act Advisory Group (BSAAG).

The Money Laundering Suppression Act from 1994 required banking agencies to review and enhance training, develop anti-money laundering examination procedures, review and enhance procedures for referring cases to law enforcement agencies, streamlined the Currency transaction report exemption process, required each Money services business (MSB) to be registered by an owner or controlling person, required every MSB to maintain a list of businesses authorized to act as agents in connection with the financial services offered by the MSB, made operating an unregistered MSB a federal crime, and recommended that states adopt uniform laws applicable to MSBs.

The Money Laundering and Financial Crimes Strategy Act of 1998 required banking agencies to develop anti-money laundering training for examiners, required the Department of the Treasury and other agencies to develop a ""National Money Laundering Strategy"", created the ""High Intensity Money Laundering and Related Financial Crime Area"" (HIFCA) Task Forces to concentrate law enforcement efforts at the federal, state and local levels in zones where money laundering is prevalent. HIFCA zones may be defined geographically or can be created to address money laundering in an industry sector, a financial institution, or group of financial institutions.

[102]The Intelligence Reform & Terrorism Prevention Act of 2004 amended the Bank Secrecy Act to require the Secretary of the Treasury to prescribe regulations requiring certain financial institutions to report cross-border electronic transmittals of funds, if the Secretary determines that reporting is ""reasonably necessary"" in ""anti-money laundering /combatting financing of terrorists (Anti-Money Laundering/Combating the Financing of Terrorism AML/CFT). Notable cases [ edit]1998 investigation, United States Senate, Contribution Laundering/Third-Party Transfers.

Includes investigation of Gandhi Memorial International Foundation. Charter House Bank: Charter House Bank in Kenya was placed under statutory management in 2006 by the Central Bank of Kenya after it was discovered the bank was being used for money laundering activities by multiple accounts containing missing customer information. More than $1.5 billion had been laundered before the scam was uncovered. Charter House Bank Kenya Scandal Bank of Credit and Commerce International: Unknown amount, estimated in billions, of criminal proceeds, including drug trafficking money, laundered during the mid-1980s.

[103]Bank of New York: US$7 billion of Russian capital flight laundered through accounts controlled by bank executives, late 1990s. [104]Ferdinand Marcos: Unknown amount, estimated at US$10 billion of government assets laundered through banks and financial institutions in the United States, Liechtenstein, Austria, Panama, Netherlands Antilles, Cayman Islands, Vanuatu, Hong Kong, Singapore, Monaco, the Bahamas, the Vatican and Switzerland.

[105]HSBC, in December 2012, paid a record $1.9 Billion fines for money-laundering hundreds of millions of dollars for drug traffickers, terrorists and sanctioned governments such as Iran. [106] The money-laundering occurred throughout the 2000s. Liberty Reserve, in May 2013, was seized by United States federal authorities for laundering $6 billion. Institute for the Works of Religion: Italian authorities investigated suspected money laundering transactions amounting to US$218 million made by the IOR to several Italian banks.

[107]Nauru: US$70 billion of Russian capital flight laundered through unregulated Nauru offshore shell banks, late 1990s [108]Sani Abacha: US$2–5 billion of government assets laundered through banks in the UK, Luxembourg, Jersey (Channel Islands), and Switzerland, by the president of Nigeria. [109]Standard Chartered: paid $330 million in fines for money-laundering hundreds of billions of dollars for Iran. The money-laundering took place in the 2000s and occurred for ""nearly a decade to hide 60,000 transactions worth $250 billion"".

[110]Standard Bank: Standard Bank South Africa London Branch – The Financial Conduct Authority (FCA) has fined Standard Bank PLC (Standard Bank) £7,640,400 for failings relating to its anti-money laundering (AML) policies and procedures over corporate and private bank customers connected to politically exposed persons (PEPs). BNP Paribas, in June 2014, pleaded guilty to falsifying business records and conspiracy, having violated U. S. sanctions against Cuba, Iran, and Sudan. It agreed to pay an $8.9 billion fine, the largest ever for violating U. S. sanctions. [7] [111]BSI Bank, in May 2017, was shut down by the Monetary Authority of Singapore for serious breaches of anti-money laundering requirements, poor management oversight of the bank's operations, and gross misconduct of some of the bank's staff.

Jose Franklin Jurado-Rodriguez, a Harvard College and Columbia University Graduate School of Arts and Sciences Economics Department alumnus, was convicted in Luxembourg in ""June 1990 in what was one of the largest drug money laundering cases ever brought in Europe"" [112] and the US in 1996 of money laundering for the Cali Cartel kingpin Jose Santacruz Londono. [113] Jurado-Rodriguez specialized in "" smurfing "". [114]Digital money and Money laundering [ edit]To prevent the usage of decentralized digital money such as Bitcoin for the profit of crime and corruption, Australia is planning to strengthen the nation's anti-money laundering laws.

[115] Knowing the characteristics of Bitcoin, [116] it is completely deterministic, protocol based and cannot be censored, may circumvent national laws using services like Tor to obfuscate transaction origins, and relies completely off of cryptography, not a central entity running under a KYC framework. There are several cases of criminals have cashed out a significant amount of Bitcoin after ransomware attacks, drug dealings, cyber fraud and gunrunning.

[117] [118] Other damages such as The DAO being drained of Ether cannot be classified as money laundering under any legal definition, as decentralized virtual environments are legally stateless and cannot be intervened with by a governing body. Such an incident has been debated as to the clear definition of money laundering in a stateless environment, leading to Ethereum Classic to form.

See also [ edit]Bank Secrecy Act Confiscation Currency transaction report Customer Identification Program Embezzlement Financial Action Task Force on Money Laundering FBIFinancial Crimes Enforcement Network Global RADARHawala Money trail Michael H. O'Keefe Office of Foreign Assets Control Offshore banking Organized crime Penny stock scam Politically exposed person Round-tripping (finance)Shell (corporation)Terrorist financing USA PATRIOT Act White-collar crime World Bank residual model Further reading [ edit]Frank, Thomas (January 12, 2018).

""Secret Money: How Trump Made Millions Selling Condos To Unknown Buyers. ""Buzz Feed News. References [ edit]^ Duhaime, Christine. ""What is Laundering? Duhaime's Financial Crime and Anti-Money Laundering Law"". Retrieved 7 March 2014.^ ""Financial Weapons of War, Minnesota Law Review (2016)"".

ssrn.com. SSRN 2765010.^ See for example the Anti-Money Laundering & Counter Terrorism Financing Act 2006 (Australia), the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (New Zealand), and the Anti-Money Laundering and Counter-Terrorist Financing (Financial Institutions) Ordinance (Cap 615) (Hong Kong. See also (for example) guidance on IMF and FATF websites similarly conflating the concepts.^ ""Anti-Money Laundering – Getting The Deal Through – GTDT"". Getting The Deal Through. Retrieved 28 May 2017.^ Sterling Seagrave (1995). Lord of the RIM.^ Nigel Morris-Cotterill (1999).

""A brief history of money laundering"".^ a b Protess, Ben & Jessica Silver-Greenberg (30 June 2014). ""BNP Paribas Admits Guilt and Agrees to Pay $8.9 Billion Fine to U. S."" The New York Times. Retrieved 1 July 2014.^ ""AUSTRAC at a glance"".

AUSTRAC. Retrieved 18 August 2016.^ a b c Reuter, Peter (2004). Chasing Dirty Money. Peterson. ISBN 978-0-88132-370-2.^ ""History of Anti-Money Laundering Laws"". United States Department of the Treasury. 30 June 2015. Retrieved 30 June 2015.^ Lawrence M. Salinger, Encyclopedia of white-collar & corporate crime: A – I, Volume 1, page 78, ISBN 0-7619-3004-3, 2005.^ National Drug Intelligence Center (August 2011). ""National Drug Threat Assessment"" (PDF). p. 40. Retrieved 20 September 2011.^ a b ""National Money Laundering Threat Assessment"" (PDF).

December 2005. p. 33. Archived from the original (PDF) on 17 October 2010. Retrieved 3 March 2011.^ Baker, Raymond (2005). Capitalism's Achilles Heel. Wiley.^ a b Financial Action Task Force. ""Global Money Laundering and Terrorist Financing Threat Assessment"" (PDF). Retrieved 3 March 2011.^ a b c http://www.private-eye.co.uk/registry^ ""Underground Economy Issues.

Ontario Construction Secretariat"". Archived from the original on 16 December 2010.^ ""Tax amnesties turn HMRC into 'biggest money-laundering operation in history ' "". Retrieved 14 June 2013.^ ""Money Laundering: the Importance of International Countermeasures--Address by Michel Camdessus"". IMF. Retrieved 2018-03-02.^ Financial Action Task Force. ""Money Laundering FAQ"". Retrieved 2 March 2011.^ For example, under UK law the first offences created for money laundering both related to the proceeds from the sale of illegal narcotics under the Criminal Justice Act 1988 and then later under the Drug Trafficking Act 1994.^ Richet, Jean-Loup (June 2013).

""Laundering Money Online: a review of cybercriminals methods"". ar Xiv: 1310.2368.^ Zetter, Kim (May 2013). ""Liberty Reserve founder indicted on $6 billion money-laundering charges"". Wired. Retrieved 20 October 2013.^ Solon, Olivia (October 2013). ""Cybercriminals launder money using in-game currencies"". Wired. Retrieved 22 October 2013.^ International Federation of Accountants. ""Anti-Money Laundering"" (PDF). Retrieved 27 March 2014.^ Cassella, S. D. (2003). ""Reverse money laundering"". Journal of Money Laundering Control. 7 (1): 92–94.^ Zabyelina, Yuliya (2015). ""Reverse money laundering in Russia: Clean cash for dirty ends"".

Journal of Money Laundering Control. 18 (2): 202–21. doi: 10.1108/JMLC-10-2014-0039.^ EAG (2012). "" Money laundering and terrorist financing with use of physical cash and bearer instruments "", 17th Plenary Meeting of the Eurasian Group on Combating Money Laundering and Financing of Terrorism, 28 December, New Delhi.^ Financial Action Task Force.

""About the FATF"". Retrieved 20 September 2011.^ Financial Action Task Force. ""About the Non-Cooperative Countries and Territories (NCCT) Initiative"". Retrieved 20 September 2011.^ ""The Global Anti-Money Laundering Regime: A Short Overview, by Richard Horowitz, Cayman Islands Journal, 6 January 2010"". Compasscayman.com. Retrieved 10 November 2013.^ Financial Action Task Force. ""Money Laundering FAQ"". Retrieved 20 September 2011.^ ""Financial Crime Job Descriptions - Fin Crime Jobs.com"".^ Roth, John; et al.

(20 August 2004). ""Monograph on Terrorist Financing"" (PDF). National Commission on Terrorist Attacks Upon the United States. pp. 54–56. Retrieved 20 September 2011.^ Ball, Deborah, et al., (22 March 2011). ""U. S. Banks Oppose Tighter Money Rules"". Wall Street Journal. Retrieved 19 September 2011.^ Money Laundering Bulletin, Issue 154, June 2008, Dr Jackie Harvey (Newcastle Business School^ ""The Lost Trail"". The Economist. 20 October 2005. Retrieved 19 September 2011.^ Levi, Michael & William Gilmore (2002). ""Terrorist Finance, Money Laundering and the Rise of Mutual Evaluation: A New Paradigm for Crime Control?"".

European Journal of Law Reform. 4 (2): 337–364.^ Levi, Michael (May 2010). ""Combating the Financing of Terrorism: A History and Assessment of the Control of 'Threat Finance ' "". The British Journal of Criminology. 50 (4): 650–669. doi: 10.1093/bjc/azq025.^ ""Coming clean"".

The Economist. 14 October 2004. Archived from the original on 15 June 2013.^ Bartlett, Brent (May 2002). ""The Negative Effects of Money Laundering on Economic Development"". Asian Development Bank. Archived from the original on 2 June 2011. Retrieved 19 September 2011.^ Article 29 Data Protection Working Party. ""Opinion 14/2011 on data protection issues related to the prevention of money laundering and terrorist financing"" (PDF). European Commission. Retrieved 18 February 2014.^ Article 29 Data Protection Working Group. ""Opinion 14/2011 Annex: Recommendations"" (PDF).

European Commission. Retrieved 18 February 2014.^ American Civil Liberties Union. ""The Surveillance Industrial Complex"" (PDF). Retrieved 23 October 2011.^ Mallen, Patricia (13 February 2013). ""In Mexico, Around $10B Every Year Come From Money Laundering, Which Was Not Illegal in 16 Out of 31 States"".

International Business Times. Retrieved 12 March 2014.^ GAFI, FATF (21 July 2017). ""FATF Members and Observers"". www.fatf-gafi.org.^ Financial Action Task Force. ""Member Country and Observers FAQ"".^ ""Mission"". Retrieved 21 June 2014.^ ""High-risk and non-cooperative jurisdictions"". www.fatf-gafi.org. 23 June 2017. |first1= missing |last1= in Authors list ( help)^ International Money Laundering Information Network. Retrieved on 21 October 2011.^ World Bank Financial Market Integrity. Amlcft.org. Retrieved on 21 October 2011.^ ""fintraca.gov.af"". fintraca.gov.af. Retrieved 10 November 2013.^ Australian National Security: What Australia is doing^ Financial Transaction Reports Act 1988 (Cth), s 24.^ Tyree, Alan (1997).

Digital Cash. Adelaide, Australia: Butterworths. pp. 82, 86. ISBN 0 409 31316 5.^ ""Money Laundering Act 2012 amended"". Resource Portal of OGR Legal. OGR Legal. Retrieved 2 November 2015.^ ""Laws and Acts"". Bangladesh Bank.^ ""মানিলন্ডারিং প্রতিরোধ আইন, ২০১২"".^ a b c d e Duhaime, Christine.

""AML Legislation in Canada, Duhaime's Financial Crime and Anti-Money Laundering Law"". Retrieved 7 March 2014.^ a b ""AML global alignment: Two steps forward, one step back"" (PDF). pwc.com. Pw C Financial Services Regulatory Practice, June 2015.^ ""EUR-Lex – 52013PC0045 – EN – EUR-Lex"".^ ""Prevention of Money Laundering Act, 2002"" (PDF).

Financial Intelligence Unit (FIU-IND), Ministry of Finance, India. Retrieved 10 October 2012.^ ""The Prevention of Money Laundering (Amendment) Act, 2005"" (PDF). Retrieved 10 November 2013.^ ""The Prevention of Money Laundering (Amendment) Act, 2009"" (PDF). Retrieved 10 November 2013.^ ""ED – functions"". Archived from the original on 26 April 2012. Retrieved 20 May 2013.^ ""Recovery of Arrears From Hasan Ali Not Possible: Fin Min"".

Outlook India. Retrieved 6 July 2014.^ Chan, Eric. ""Getting The Deal Through - Anti-Money Laundering"" (PDF). Retrieved 28 May 2017.^ ""Singapore Statutes Online - 65A - Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act"". statutes.agc.gov.sg. Retrieved 28 May 2017.^ ""Singapore Statutes Online - 190A - Mutual Assistance in Criminal Matters Act"". statutes.agc.gov.sg. Retrieved 28 May 2017.^ Room, Reading. ""Regulatory and Supervisory Framework > Anti Money Laundering and Countering the Financing of Terrorism"".

www.mas.gov.sg. Retrieved 28 May 2017.^ ""OPSI: Terrorism Act"". Retrieved 14 February 2009.^ ""OPSI: Anti-Terrorist Crime & Security Act"". Retrieved 14 February 2009.^ ""OPSI: Proceeds of Crime Act"". Retrieved 14 February 2009.^ ""OPSI: Serious Organised Crime and Police Act 2005"".

Retrieved 14 February 2009.^ Sections 327 – 340, Proceeds of Crime Act 2002^ Section 330, Proceeds of Crime Act 2002^ a b Section 340, Proceeds of Crime Act 2002^ Section 329, Proceeds of Crime Act 2002^ Section 327, Proceeds of Crime Act 2002^ a b Section 334, Proceeds of Crime Act 2002^ ""OPSI: Money Laundering Regulations 2003"".

Retrieved 14 February 2009.^ a b ""OPSI: Money Laundering Regulations 2007"". Retrieved 14 February 2009.^ Section 333A, Proceeds of Crime Act 2002^ ""Joint Money Laundering Steering Group"". Archived from the original on 6 October 2011. Retrieved 14 February 2009.^ ""Law Society AML advice"".

Retrieved 14 February 2015.^ Section 340 (2), Proceeds of Crime Act 2002^ David Winch, ""Money Laundering Law Changes"" (2006)^ a b c The Suspicious Activity Reports Regime Annual Report 2010 published by SOCA^ ""History of Anti-Money Laundering Laws | Fin CEN.gov"".

www.fincen.gov. Retrieved 2018-02-22.^ ""FFIEC website regarding CTR Exemptions"". Retrieved 3 November 2014.^ Fin CEN. ""Bank Secrecy Act"". Archived from the original on 7 March 2011. Retrieved 2 March 2011.^ Fin CEN Mission. ""Fin CEN mission"". Archived from the original on 30 April 2011. Retrieved 2 March 2011.^ Roth, John; Douglas Greenburg and Serena Willie (2004).

""Monograph on Terrorist Financing"" (PDF): 54–56. Retrieved 2 March 2011.^ Joseph, Lester; John Roth (September 2007). ""Criminal Prosecution of Banks Under the Bank Secrecy Act"" (PDF). United States Attorneys' Bulletin. Retrieved 2 March 2011.^ ""SEC resources"". Retrieved 2 March 2011.^ ""IRS web site regarding Form 8300"". Archived from the original on 22 February 2011. Retrieved 2 March 2011.^ ""Informal Value Transfer Systems"", Financial Crimes Enforcement Network, 1 September 2010 Archived 5 September 2010 at the Wayback Machine.^ http://www.natcnc.com/msb/the-unintended-consequences-of-aml-regulations/^ ""Fin CEN Geographic Targeting Order Renewed and Extended"". Adam Leitman Bailey PC. Retrieved 2018-04-12.^ a b Cassella, Stefan (September 2007). ""Money Laundering Laws"" (PDF). United States Attorneys' Bulletin: 21–34. Retrieved 2 March 2011.^ ""US Sentencing Commission Date, 2009"" (PDF). 2009. Retrieved 2 March 2011.^ US Dept Treasury. ""What is a HICFA?"". Financial Crimes Enforcement Network. Archived from the original on 6 March 2014. Retrieved 6 March 2014.^ ""BCCI's Criminality"". Globalsecurity.org. Retrieved 3 March 2011.^ O'Brien, Timothy L. (9 November 2005). ""Bank of New York Settles Money Laundering Case"". New York Times. Retrieved 3 March 2011.^ Dunlap, David W. (13 January 1991). ""Commercial Property: The Bernstein Brothers; A Tangled Tale of Americas Towers and the Crown"". The New York Times. Retrieved 12 June 2010.^ ""HSBC to Pay Record Fine to Settle Money-Laundering Charges"". New York Times. 11 December 2012. Retrieved 24 January 2013.^ Josephine Mc Kenna (7 December 2009). ""Vatican Bank reported to be facing money-laundering investigation"". The Times. Retrieved 12 June 2010.^ Hitt, Jack (10 December 2000). ""The Billion Dollar Shack"". The New York Times. Retrieved 3 March 2011.^ ""Sani Abacha"". Asset Recovery Knowledge Center. Retrieved 3 March 2011. [ permanent dead link]^ ""Standard Chartered to Pay $330 Million to Settle Iran Money Transfer Claims"". New York Times. 6 December 2012. Retrieved 24 January 2013.^ ""FBI — Bank Guilty of Violating U. S. Economic Sanctions"". Fbi.gov. Archived from the original on 15 July 2014. Retrieved 14 July 2014.^ Mc Gee, Jim (June 18, 1995). ""FROM RESPECTED ATTORNEY TO SUSPECTED RACKETEER: A LAWYER'S JOURNEY"". The Washington Post.^ RASHBAUM, William K. (April 12, 1996). ""HE ADMITS LAUNDERING DRUG CASH"". New York Daily News.^ Kochan, Nick (2011). The Washing Machine.^ ""Bitcoin one step closer to being regulated in Australia under new anti-money laundering laws"". Retrieved 18 Dec 2017.^ ""Bitcoin FAQ"". Retrieved 18 Dec 2017.^ ""Hackers have cashed out on $143,000 of bitcoin from the massive Wanna Cry ransomware attack"". Retrieved 18 Dec 2017.^ ""Bitcoin used by CRIMINALS to launder illicit funds"". Retrieved 18 Dec 2017. External links [ edit]Money laundering at Curlie (based on DMOZ)UNODC on money-laundering and countering the financing of terrorism: profile from the United Nations Office on Drugs and Crime Financial Market Integrity Unit of the World Bank International Narcotics Control Strategy Report (INCSR), annual report issued by the United States Department of State in March every year (prepared by Bureau of International Narcotics and Law Enforcement Affairs) on country money laundering risk Categories: Money laundering Commercial crimes Financial regulation Organized crime activity Tax evasion Terrorism "

The cornerstone of a strong BSA/AML compliance program is the adoption and implementation of comprehensive CDD policies, procedures, and processes for all customers, particularly those that present a higher risk for money laundering and terrorist financing.

Customer Due DiligenceâOverview

"Bank Secrecy Act Anti-Money Laundering Examination Manual Backward | Table of Contents | Forward Customer Due Diligence—Overview Objective. Assess the appropriateness and comprehensiveness of the bank’s customer due diligence (CDD) policies, procedures, and processes for obtaining customer information and assess the value of this information in detecting, monitoring, and reporting suspicious activity.

The objective of CDD should be to enable the bank to predict with relative certainty the types of transactions in which a customer is likely to engage. These processes assist the bank in determining when transactions are potentially suspicious. The concept of CDD begins with verifying the customer’s identity and assessing the risks associated with that customer. Processes should also include enhanced CDD for higher-risk customers and ongoing due diligence of the customer base.

Effective CDD policies, procedures, and processes provide the critical framework that enables the bank to comply with regulatory requirements and to report suspicious activity. An illustration of this concept is provided in Appendix K (""Customer Risk Versus Due Diligence and Suspicious Activity Monitoring""). CDD policies, procedures, and processes are critical to the bank because they can aid in: Detecting and reporting unusual or suspicious transactions that potentially expose the bank to financial loss, increased expenses, or reputational risk.

Avoiding criminal exposure from persons who use or attempt to use the bank’s products and services for illicit purposes. Adhering to safe and sound banking practices. Customer Due Diligence Guidance BSA/AML policies, procedures, and processes should include CDD guidelines that: Are commensurate with the bank’s BSA/AML risk profile, paying particular attention to higher-risk customers.

Contain a clear statement of management’s overall expectations and establish specific staff responsibilities, including who is responsible for reviewing or approving changes to a customer’s risk rating or profile, as applicable.

Ensure that the bank possesses sufficient customer information to implement an effective suspicious activity monitoring system. Provide guidance for documenting analysis associated with the due diligence process, including guidance for resolving issues when insufficient or inaccurate information is obtained.

Ensure the bank maintains current customer information. Customer Risk Management should have a thorough understanding of the money laundering or terrorist financing risks of the bank’s customer base. Under this approach, the bank should obtain information at account opening sufficient to develop an understanding of normal and expected activity for the customer’s occupation or business operations.

This understanding may be based on account type or customer classification. For additional guidance, refer to Appendix K (""Customer Risk Versus Due Diligence and Suspicious Activity Monitoring""). This information should allow the bank to determine the customer's risk profile at account opening.

Banks should monitor their lower-risk customers through regular suspicious activity monitoring and customer due diligence processes. If there is indication of a potential change in the customer's risk profile (e.g., expected account activity, change in employment or business operations), management should reassess the customer risk rating and follow established bank policies and procedures for maintaining or changing customer risk ratings.

Much of the CDD information can be confirmed through an information-reporting agency, banking references (for larger accounts), correspondence and telephone conversations with the customer, and visits to the customer’s place of business. Additional steps may include obtaining third-party references or researching public information (e.g., on the Internet or commercial databases). CDD processes should include periodic risk-based monitoring of the customer relationship to determine whether there are substantive changes to the original CDD information (e.g., change in employment or business operations).

Enhanced Due Diligence for Higher-Risk Customers Customers that pose higher money laundering or terrorist financing risks present increased exposure to banks; due diligence policies, procedures, and processes should be enhanced as a result.

Enhanced due diligence (EDD) for higher-risk customers is especially critical in understanding their anticipated transactions and implementing a suspicious activity monitoring system that reduces the bank’s reputation, compliance, and transaction risks. Higher-risk customers and their transactions should be reviewed more closely at account opening and more frequently throughout the term of their relationship with the bank.

Guidance for identifying higher-risk customers may be found in the core overview section, "" BSA/AML Risk Assessment ,"" page 18. The bank may determine that a customer poses a higher risk because of the customer’s business activity, ownership structure, anticipated or actual volume and types of transactions, including those transactions involving higher-risk jurisdictions. If so, the bank should consider obtaining, both at account opening and throughout the relationship, the following information on the customer: Purpose of the account.

Source of funds and wealth. Individuals with ownership or control over the account, such as beneficial owners, signatories, or guarantors. 52Occupation or type of business (of customer or other individuals with ownership or control over the account). Financial statements. Banking references. Domicile (where the business is organized). Proximity of the customer’s residence, place of employment, or place of business to the bank.

Description of the customer’s primary trade area and whether international transactions are expected to be routine. Description of the business operations, the anticipated volume of currency and total sales, and a list of major customers and suppliers.

Explanations for changes in account activity. As due diligence is an ongoing process, a bank should take measures to ensure account profiles are current and monitoring should be risk-based. Banks should consider whether risk profiles should be adjusted or suspicious activity reported when the activity is inconsistent with the profile. Backward | Table of Contents | Forward "

AML Analysts are responsible for detecting and monitoring suspicious transactions in an effort to prevent money laundering. A typical AML Analyst resume usually describes duties such as implementing anti money laundering procedures, assessing daily financial activity, and preparing regular reports to AML Compliance Officers.

Aml AnalystResume Samples

Aml Analyst Resume Samples HIGH QUALITYThe best examples from thousands of real-world resumes EXPERT APPROVEDHandpicked by resume experts based on rigorous standards DIVERSE EXAMPLESTailored for various backgrounds and experience levels

The skills required to an AML Analyst include research competencies, entrepreneurial thinking, computer proficiency, integrity and decision-making abilities. Analytical skills and solid financial expertise are paramount. Most AML Analyst resume samples highlight a Bachelor's Degree in finance or higher education level. Looking for job listings? Check out our Aml Analyst Jobs page. Want 2-3x more interviews (guaranteed)?

Get a Professional Resume Rewrite from Zip Job1AML Analyst Conducted research that utilized internal and external public and private databases to compile a portfolio of information on funds transfer and or check instrument products/transactions. Assisted and provided information to support Suspicious Activity Reports (SAR) or equivalent for regulatory filing. Maintain a strong investigative skills; the ability to work independently, demonstrated extensive banking and Compliance knowledge. Investigated, monitored and managed over 75 large accounts for suspicious activities on a daily basis.

Identified multiple significant cases, red flags and patterns associated with the laundering of illicit funds.

Candidate Info5 years in workforce1 year at this job BS Computer Information Systems2AML Analyst Responsible for identifying and researching the patterns, trends and anomalies in complex transactional and customer data to detect, prevent, mitigate and report suspicious activity related to money laundering, terrorist financing and structuring. Used transactional and customer records, external data, publicly- available information, and other information to identify suspicious or unusual activity. Performed detailed analyses to detect patterns, trends, anomalies and schemes in transactions and relationships across multiple businesses/products.

Prepared suspicious activity reports for BSA/AML management. Participated in and provided technical support for projects and initiatives with moderate to high risk. Identified training opportunities and developed, conducted, and assisted with a wide range of BSA/AML- related training.

Assist with preparation and review of materials gathered for regulatory exams/audits Candidate Info4 years in workforce2 years at this job BSFinance3AML Analyst Performed monthly AML risk-based review and analysis on individual and business accounts and made recommendations for further review Reviewed and analysis on Moderate Risk accounts Conducted enhanced due diligence research of individuals, institutions and trust through Lexis Nexis and other internet tools.

Interacted with Bank management on suspicious transactions conducted by customers. Prepared and reviewed Loan accounts, RDC (Remote Deposit Capture), Wire Transfers and Monetary Instrument reports in quarterly basis. Candidate Info11 years in workforce2 years at this job BA Finance And Investment4AML Analyst Reviewed incoming Suspicious Act Information Forms and submitted reports to IRS and FINCEN in compliance to their standards and procedures.

Analyzed clients' database to create Customer Monitoring Report and reported to FINCEN. Created graphs using pivot tables from previous years' dashboard to estimate incoming workload.

Updated and revised 2014 Master Dashboard (Automated the functions and formulas in the database). Candidate Info5 years in workforce2 months at this job BAEconomics5Senior AML Analyst Identified and investigated suspicious customer transactions. Researched, wrote, and reviewed Suspicious Activity Reports on a daily basis while ensuring compliance with federal regulations. Performed Enhanced Due Diligence on customers deemed high risk, and suggested account restrictions and/or account closures based on risk to the institution. Analyzed potential Office of Foreign Assets Control (OFAC) hits to ensure transactions were in compliance with United States sanctions.

Worked closely with team members and other financial institutions to fulfill 314 (b) of the USA Patriot Act Sharing of Information requests. Provided training on Bank Secrecy Act and Anti-Money Laundering procedures and systems for new employees.

Candidate Info6 years in workforce2 years at this job BA Business Administration Bank Secrecy Act Officer Level IRelated Aml Analyst Jobs Nearby Data Analyst (Strategic Staffing Solutions (S3)) - Richmond, VABusiness Systems Analyst (Iaas and Paas) (Agile Global Solutions) - Raleigh, NCData Analyst III (BHJOB1435_22038) (Astyra Corporation) - Richmond, VAData Analyst III (BHJOB1435_22036) (Astyra Corporation) - Richmond, VAData Analyst III (BHJOB1435_22028) (Astyra Corporation) - Richmond, VAData Analyst (Alliance of Professionals & Consultants) - Raleigh, NCData Analyst 2 (Salient CRGT) - Fort Lee, VAView More Aml Analyst Jobs Job Search by6Kyc/aml Analyst Reviewed Consumer customers identified as requiring further analysis and made risk decisions based upon Know Your Customer (KYC) standards.

Determined and implemented additional steps, validating KYC risk compliance based on research of customer records, verification of account purpose and legitimacy, analysis of transaction activity.

Conducted reviews of client documentation and information obtained by client contacts within the business units. Ensured that information obtained was consistent with BSA/AML Policy and Procedures and satisfied regulatory requirements.

Performed additional tasks as assigned, improving the effective administration of the AML and KYC Policies. Candidate Info11 years in workforce2 years at this job7Kyc/aml Analyst/consultant Identifying OFAC alerts in Actimize such as Political Exposed Person, that may be, located and doing business with US Sanction and Embargo countries.

Supplied proof that False Positives were proven to be correct and updated Actimize. Researched client information via Google and Lexis Nexis. Submitting PEP's to compliance, after been identified to be added on SDN list. Reviewing and updating KYC files with missing and updated information to satisfy compliance requirements.

Contacting Relationship Manager, for further information when EDD is conducted. Candidate Info11 years in workforce10 months at this job C Banking And Finance8Senior Bsa/aml Analyst Conduct investigations on Cases and Alerts produced through the banks automated Anti-Money Laundering System or through internal referrals, Subpoenas or 90 Day SAR Reviews Well versed in completing and reviewing Enhanced Due Diligence Investigations Gather, prepare & package documentation & information on a diverse group of customers, accounts & monetary transactions in accordance with Federal regulations & specific bank requirements, standards & processes Responsible to prepare & submit narrative summary of findings for each individual review, including a detailed recommendation for further action, to Senior VPIdentify customer upsell opportunities & provide leads to branch managers Prepare Suspicious Activity Reports to Fin CEN & send completed SAR to Fin CEN.

Train new employees on the various tasks & daily systems. Candidate Info23 years in workforce4 years at this job AS Business / Finance9Team Lead AML Analyst Promoted to team leader responsible for training new AML hires on complying with company’s due diligence procedures and regulatory mandates.

Initiated, processed, closed, and documented investigations per Know Your Customer, USA PATRIOT Act, Section 326, Bank Secrecy Act. Counseled financial advisors on handling KYC client account issues. Cross-trained key members of New Accounts department on AML on-boarding policies. Internally audited New Account’s compliance with KYC procedures. Documented and monitored risk mitigation activities, surveillance of account activities and monitoring of structural changes for internal and external audit needs.

Candidate Info15 years in workforce1 year at this job BAHistory Accounting Business Management10AML Analyst Conducted initial analysis and assessment of alerts generated from Mantas using internal/external research tools Completed Suspicious Activity Reports (SAR) as required by the Bank Secrecy Act Evaluated wire transfers and other payments for potential fraud, money laundering, patterns and inconsistencies Review, research and make determination of suspicion on items and transactions identified according to the Bank Secrecy Act (BSA) via AML automated alerts or manually received reports and referrals Understand and stay current on the Red Flags and industry trends related to AMLConduct background investigations as required Candidate Info3 years in workforce1 year at this job BA French Philology BAEconomics VIEW MORE RESUME SAMPLES1 2 NEXT >Free Professional Resume Critique We have partnered with Top Resume to bring you a FREE resume critique service.

Upload your resume and within 48 hours Top Resume will email you a detailed analysis of what hiring managers and automated systems think of your resume – and how to improve it. Email: Resume: Browse Upload Resume File Submit Related Job Titles Accounts Receivable Analyst Commercial Credit Analyst Revenue Analyst Accounting Analyst Reconciliation Analyst Billing Analyst Accounts Payable Analyst Quantitative Analyst Tax Analyst Account Analyst Chargeback Analyst Payroll Analyst Browse more