Anti-Money Laundering Compliance Program

The Anti-Money Laundering (AML) Compliance Program is everything companies at risk of financial crime do in combating financial crime and compliance processes. Money laundering and terrorist financing are global issues. Apart from these, many crimes such as corruption, bribery, fraud, drug trafficking, and human trafficking are linked to money laundering and terrorist financing.

Regulators and organizations under the obligations of AML have taken and are taking effective steps in the fight against financial crimes in recent years. FATF and the European Union, which are global regulators, publish various guides and reports every period and announce the measures that countries and organizations have to take. In addition, these global regulators publish reports on countries and share their analysis of the country's level in dealing with financial crime. These reports are very important for the country's reliability and affect the countries' foreign relations. Therefore, member countries prepare for these audits to comply with FATF and European Union AML regulations.

Which Businesses Need AML Compliance Program?

Banks, money transfer companies, cryptocurrency exchanges, e-wallets, payment companies, credit companies, insurance companies, gambling operators, and many other businesses are required to ensure Anti-Money Laundering Compliance Program. Companies should know compliance meaning and take measures accordingly. All these businesses' efforts to ensure compliance with the regulations they have to comply with constitute the AML compliance program of these businesses. Companies that fail to comply with and fail obligations regarding compliance are subject to large fines. In 2019, organizations that did not meet AML compliance were fined $8 billion. These heavy penalties show that businesses should pay extra attention to compliance work and create a perfectly functioning anti-money laundering compliance program.

Although AML regulations differ from country to country, they are all the same: Preventing financial crimes. This article will explain how to create a perfect Anti-Money Laundering compliance program based on FATF recommendations, European Union regulations, and compliance meaning.

Risk-Based Approach in AML Compliance Program

The basis of an advanced Anti-Money Laundering compliance program is based on a risk-based approach. Organizations should determine the customer's risk level by making a risk assessment during the customer onboarding process. Existing customers also need to be checked at regular time intervals, as existing risks can change over time. Organizations should then aim to implement an effective AML compliance program by creating a control program tailored to customers' risk levels.

Tasks of the AML Compliance Officer in the AML Compliance Program

The AML compliance process is an ongoing process that requires careful attention. It is the firm's AML compliance officer's responsibility to ensure AML compliance of a firm and the implementation of the Anti-Money Laundering compliance program. For companies, the AML compliance officer is a very important employee. Therefore, the AML compliance officer must also have some qualifications and skills to enable the company to provide AML compliance processes.

The main task of the AML compliance officer is to identify risks and suspicious transactions by applying a risk-based approach and to report to the regulators to which it is responsible. In addition, according to FATF recommendations and European Union regulations, companies must ensure that the AML compliance officer develops by sending them to seminars and training.

Customer Onboarding & Customer Account Opening Processes

According to the risk-based approach, one of the company's Anti-Money Laundering obligations is to determine the customer's risk level by making a risk assessment before opening the customer account. "Customer Due Diligence" and "Know Your Customer" procedures are applied for risk assessment. In these processes, the customer's identity is verified, and the risk assessment of the customer is controlled by scanning the customer in sanction, PEP, and Adverse Media dataWith our AML Screening Software, businesses can control their customers with our global AML database.)

Detecting Suspicious Transactions

At the beginning of our article, we said that the purpose of this compliance meaning is to detect and prevent financial crimes. For a successful compliance program to achieve its purpose, the risk assessment applied during the customer onboarding process should begin to be applied after the customer account is opened. The customer's financial transactions must be examined, and suspicious transactions must be reported. (Our AML Transaction Monitoring software enables automatic detection of suspicious transactions with company-specific rules and scenarios.)

Independent AML Audits

Independent auditors must audit Anti-Money Laundering compliance programs to measure the AML compliance program's efficiency and avoid possible regulatory penalties. With these audits, businesses can detect their deficiencies and failures and correct their problems before regulatory inspections. Thus, companies can be protected from high regulatory fines.

How Does The Sanction Scanner Help You?

Sanction Scanner provides end-to-end solutions that will increase the efficiency of Anti-Money Laundering compliance programs of businesses. With our global coverage sanction, PEP and Adverse Media database, and advanced transaction monitoring software, you can speed up all your processes from customer onboarding to Transaction Monitoring and manage a more efficient compliance process.

You can contact us or request a demo to get information about our AML solutions.