A Guide to Anti-Money Laundering for 2020

Money laundering for banks is becoming increasingly important, both in terms of regulation and in public perception. Many financial institutions are worried that digitization will greatly increase the risk of money laundering and fraud. In this article, the Sanction Scanner addresses the regulatory requirements for money laundering through Regulatory Roadmap.


What is Money Laundering?


The term "money laundering" is said to go back to Al Capone, who during the prohibition in 1920 (USA) has invested the illegally acquired money in launderettes to disguise the origin of the money. Today you hear the word "money laundering" more often than ever.



Money laundering is the unnoticed introduction of illegally generated money through as unobtrusive business transactions in the legal financial district and out of it. The source of the money, which comes from illegal activities such as corruption, arms or drug trafficking and tax evasion, is masked by feeding, concealment, and integration.


Methods and Stages in Money Laundering


The feed is regarded as money laundering of the first degree, where it is intended to convert illegally acquired cash back into book money. This is done on the basis of smaller amounts to cover up illegal activities. However, money laundering is usually carried out at this stage with a high detection risk for the offender.


In obfuscation, the money transactions are carried out so often that the document path is broken through and the money is anonymized. With each additional transaction, money laundering becomes harder to track. In the course of the business process and through countless transactions, the risk of discovery is reduced.


The third and last phase of money laundering is integration. If the origin of the money can no longer be determined, the illegal money is replaced by z. B. Real estate purchases used as a result of legitimate business activity.


For these reasons, the volume and extent of money laundering deals worldwide are very difficult to estimate and therefore remain undetected. However, studies reveal the immense sums that circulate in the illegal sector and affect the entire financial system and the global economy. No other institution can transfer the laundered money more effectively and faster than a bank. Every bank that conducts banking is aware of all sorts of money laundering scenarios and risks. However, to minimize the risk of detection, the criminals are always developing new and different techniques to get rid of their cash.

Anti-Money Laundering Directives of the European Union


The consequences of money laundering involve material and material intangible losses that are difficult to assess and lead to sustainable, long-term growth prevention.


As the money laundering and predicate offenses that are needed to fund money laundering are very difficult to define and due to the increasing digitization and the expansion of the circle of obligated persons, the EU is tightening the compliance requirements of companies with each new directive. To date, four EU Money Laundering Directives have been implemented in all Member States (for a more detailed list see below).