Anti-Money Laundering (AML) includes policies, laws, and regulations to prevent financial crimes. AML is a worldwide term to prevent money laundering. There are global and local regulators established in the world to prevent financial crimes. Each country has different AML policies. Companies have to follow these AML regulations. Complying these regulations could be a complicated process for companies. For this, companies have AML compliance departments that ensure AML compliance.
To understand AML regulations, we need to learn first what money laundering is. The most important thing is money laundering is a major financial crime. Money laundering is the legalization of money obtained illegally. There are various money laundering processes. Money laundering methods are increasing with the development of technology. According to the International Monetary Fund (IMF), the money laundering rate is between 2-5 percent of world GDP. This ratio corresponds to a massive amount of the world's total money. Regulators announce new directives to prevent money laundering. These are commonly referred to as AML regulations.
The primary purpose of AML regulations is to prevent money laundering. Regulators publish a series of AML procedures to achieve this goal. Companies have to follow these procedures. One of these procedures is the "Know Your Customer" Policy. Regulators require companies to learn more about their customers. According to customers' information, companies can understand whether there is a suspicious transaction. For example, a customer who wants to transfer money can be on a country's list of terrorists. If the firm does not know this customer, it will probably help to finance terrorism. It will be a substantial financial crime, and also this leads to hefty penalties. But if the company uses an AML software such as Sanction Scanner, it will block the suspicious transactions. After that, the company will report this transaction and announce that it has prevented a major financial crime. According to another procedure, regulators require the institutions to report transactions of more than $ 10,000.
Criminals use money laundering to conceal their crimes and their money. Financial institutions play a very important role in the world of financial crime. If financial institutions do not comply with the regulations, financial crimes will continue to increase. 2-5% of GDP is money laundered through the financial system. That's a huge amount. In addition, regulators impose various penalties for companies that do not comply with the regulations. The value of AML fines in 2018 was $ 4.27 billion. At the end of 2019, an increase of 2-3 times the penalties is expected compared to 2018. Most of the institutions receiving these penalties are banks.
It can sometimes be complicated for companies to comply with AML regulations. AML regulations are updated continuously. With increased audits and penalties, companies must give more importance to compliance with these regulations. Compliance processes of companies are provided by the AML compliance officer of the firm. The AML compliance officer follows AML regulations and regulates their companies' activities in a manner that is not in violation of these regulations.
Another purpose of the compliance officer is to protect his company from financial crimes. But it is not possible to do this manually. There are thousands of sanctions and watchlists of more than two hundred countries published in the world. As you can guess, companies don't want people on these lists to be their customers. Compliance officers should check whether their customers are on these lists. Sanction Screening services such as Sanction Scanner allows the compliance officer to check their customers in these lists easily.
Within the development of technology, the types of financial crime are changing. Firms need technology to help prevent financial crimes. AML compliance software such as Sanction Scanner was developed to protect companies from financial crimes. Compliance software has simplified complex compliance processes for companies.
Sanction Scanner's database consists of over 1000 Sanctions, regulatory and law enforcement, and other official global and local sanction and pep lists, including those issued by the USA, UK, UN, and other global major and minor government departments. You can use integration between your Project and Sanction Scanner. This will automatically make your own AML queries. We always keep our lists up to date. Sanction Scanner checks and processes updated Sanction and PEP lists every fifteen minutes. Sanction Scanner's lists are compatible with all regional sanctions, CTF, and Anti-Money Laundering requirements. You will be using real-time data, always. AML Check is very easy with the Sanction Scanner. For more information, you can contact us or request a demo.
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