Understanding Anti-Money Laundering (AML)
Anti-Money Laundering (AML) refers to a set of laws and regulations that aim to prevent the illegal movement of money on a global scale. Money laundering involves the process of disguising the origins of unlawfully obtained funds by subjecting them to a complex series of transfers or transactions. These transactions are typically legitimate, making it difficult to detect and raising no suspicion. This allows the individuals who obtained the illegal funds to use them for legal purposes.
AML primarily focuses on criminal activities such as the trade of illegal goods (such as drugs and contraband), corruption in public office, and tax evasion. It specifically addresses the methods used to conceal these crimes and the money derived from them.
The implementation of AML measures heavily relies on financial institutions. By preventing criminals from successfully transferring the proceeds of their illegal activities, these institutions discourage the commission of such crimes. Therefore, financial institutions have the responsibility to monitor their customers’ transactions and deposit records, especially when they appear unusually large.
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