Financial institutions have specific compliance obligations to which they are responsible to combat financial crime and terrorism financing. Local and global authorities regulate these obligations with different scopes but a similar goal. Financial institutions must comply with both regulations to ensure AML and CTF compliance; otherwise, they might face with crucial fines, loss of reputation and money.
FATF - The Financial Action Task Force
FATF is an intergovernmental organization established to prevent money laundering and terrorist financing. With the membership of 36 countries, FATF has strong powers worldwide. The primary objective of this organization is to set global standards to ensure Anti Money Laundering compliance. Therefore, the FATF is a "policy-making body." FATF regularly publishes AML and CTF regulation guidance. The member states and the member financial institutions of these organizations must comply with these existing regulations and new money laundering regulations. FATF imposes sanctions on financial institutions that do not comply with regulations. Also, the General Assembly of FATF meets three times a year.
The European Union
EU 5AMLD and 6AMLD
The European Union publishes directives to prevent money laundering and the financing of terrorism globally and contribute to the financial system's integrity and growth. Periodically published directives provide information on current money laundering, terrorist financing, and criminal risks faced by financial markets. The EU's Fifth Anti-Money Laundering Directive (5AMLD) was published on 9.08.2018 and will affect 10.01.2020. The 6AMLD draft was published in late 2018 and will come into effect in June 2021.
- 5AMLD includes instructions on cryptocurrency and crypto-wallets. It also includes new legal requirements for risky customers and PEP lists in payment transactions.
- 6AMLD includes the criminal liability of persons associated with money laundering. It contains provisions stating that more stringent penalties will be imposed on those convicted of money laundering.
AML Regulator of United Kingdom
FCA - The Financial Conduct Authority
The Financial Conduct Authority is a financial regulatory organization in the United Kingdom. FCA regulation aims to protect consumers, increase market integrity, and promote competition. To achieve this objective, it has the authority to regulate, supervise, and authorize.
- Regulation: Determination of minimum legal standards for financial products.
- Supervision: To ensure that UK financial institutions operate safely and comply with specific anti-money laundering regulations.
- Authorization: Authorize financial institutions that fulfill the requirements
AML Regulator of United States of America
BSA - The Bank Secrecy Act
The Bank Secrecy Act (BSA) is the most important US AML and CTF regulation. The Bank's Privacy Act is administered by the Financial Crimes Enforcement Network (Fincen). Banks and other financial institutions in the United States must comply with this regulation and must fulfill obligations. BSA focuses on money laundering and terrorism financing. Within the scope of BSA, financial institutions should use the compliance program. Also, institutions should report suspicious activities and keep detailed records. Financial institutions that do not comply with BSA anti-money laundering regulations are sanctioned.
AML Regulators of Asia
HKMA - Hong Kong Monetary Authority
The Hong Kong Monetary Authority is responsible for the monetary policy and banking systems in Hong Kong. In addition, the HKMA fights against money laundering and the financing of terrorism. Financial institutions in Hong Kong must comply with AML and CTF compliance.
MAS - Monetary Authority of Singapore
The Singapore Monetary Authority (MAS) is the central bank of the state. It also has to regulate the financial sector. MAS's duties include conducting monetary policy and the supervision of financial institutions. It also has policies for financing terrorism and preventing money laundering. MAS imposes large fines on financial institutions that do not comply with policies.
AML Regulator of Australia
AUSTRAC – The Australian Transaction Report And Analysis Center
The Australian Transaction Reports and Analysis Center (AUSTRAC) was established to fight money laundering, financing of terrorism, fraud, and other financial crimes. It is the most important financial intelligence agency of the Australian government. The Anti-Money Laundering and Counter-Terrorism Financing Act have taken measures against elements threatening the financial system. Financial institutions in Australia must submit reports to the AUSTRAC regarding CTF. AUSTRAC imposes sanctions on persons or financial institutions that do not comply with these rules.
AML Regulator of Turkey
FCIB – The Financial Crimes Investigation Board
Financial Crimes Investigation Board was established by the Republic of Turkey Ministry of Treasury And Finance. Its purpose is to investigate and prevent money laundering offenses. The Financial Crimes Investigation Board is an institution that contributes to creating an efficient economy and safe society by combating money laundering and the financing of terrorism. Financial Crimes Investigation Board has the authority to audit. FCIB checks suspicious transactions.