The Anti-Money Laundering (AML) Compliance program is everything that 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 foreign relations of the countries. Therefore, member countries prepare for these audits to demonstrate compliance with FATF and European Union AML regulations.
Banks, money transfer companies, cryptocurrency exchanges, e-wallets, payment companies, credit companies, insurance companies, gambling operators, and many other businesses are required to ensure AML compliance. All these businesses' efforts to ensure compliance with the regulations they have to comply with constitute the AML compliance program of these businesses. Companies who 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. In this article, we will try to explain how to create a perfect AML compliance program based on FATF recommendations and European Union regulations.
The basis of an advanced AML 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 that is tailored to the risk level of customers.
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 AML 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.
According to the risk-based approach, one of the company's AML 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 data. With our AML Screening Software, businesses can control their customers with global our AML database.)
At the beginning of our article, we said that the purpose of the AML compliance program is to detect and prevent financial crimes. In order 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.)
AML compliance programs must be audited by independent auditors 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, businesses can be protected from high regulatory fines.
Sanction Scanner provides end-to-end solutions that will increase the efficiency of AML 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.
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