What is aml ? aml (anti money laundering)
Anti- Money Laundering (AML) refers to set of regulations, laws, and procedures that financial institutions, businesses, and organizations follow to prevent, detect, and report money laundering activities it is designed to detect and prevent the illicit flow of funds and ensure financial institutions are not used for illegal activities.
Stages of AML:
- Placements– he initial stage in money laundering (placement), where illicit funds are first introduced into the financial system.
- Layering – involves a series of transactions designed to obscure the origin of the This step is crucial in the money-laundering process, where criminals move money through multiple accounts, often across different financial institutions or even countries, to make tracing the original source more difficult.
- Integrations– involves manipulating trade transactions to move money across borders without detection. Criminals use trade-based methods to make illicit money appear as legitimate business
Customer Due Diligence (CDD)
Customer Due Diligence (CDD) is a key part of the AML process. It refers to the steps a financial institution or business takes to assess and verify the identity of its customers and to understand the nature of their business or financial activities. CDD aims to identify and mitigate the risk of doing business with clients who might be involved in illicit activities such as money laundering, fraud, or terrorist financing.
Levels of Customer Due Diligence
- KYC- Know Your Customer– involves collecting basic information about customer and as well as the updated legal documents of the company.
- Scanning– by using authorized software scanning the customer more in dept detailed information of the customer, to know if he/she has been politically exposed person or engaging with illegal
- Risk Assessment– by identifying your customer if he/she is considered low risk, medium risk, or high It involves a more thorough investigation into the customer’s financial back ground and business operations.
- Ongoing Monitoring– This involves continuously monitoring the customer activity and reviewing transactions to ensure that they remain consistent with the customer’s profile and source of funds and can be perform on a monthly basis.
- Enhance Customer Due Diligence (EDD)– this involves more detailed and thorough within the broader framework of CDD, designed to mitigate higher risks associated with certain clients or transactions. This enhanced process carries out a deeper level of investigation and ongoing monitoring to ensure compliance with Anti-Money Laundering (AML) regulations.
By conducting proper CDD, financial institutions can alleviate risks such as fraud, money laundering, and terrorism financing. CDD is a critical tool in overall framework of AML to ensure that institutions comply with legal and regulatory requirements.
What is Go AML portal registration?
The Go AML portal is an online platform developed by the United Nations Office on Drugs and Crime (UNODC) to support countries in their efforts to combat money laundering and the financing of terrorism. The portal designed for the collections, analysis, and reporting of suspicious transactions by the financial institutions and other entities involved in financial transactions.
Businesses that are mandatory to register in GoAML portal are typically those that fall under anti-money laundering (AML) regulations and are obliged to report suspicious activities, transactions, or behaviors related to money laundering and terrorist financing. These businesses generally include financial institutions, professional service providers, and certain non-financial entities. Here is a list of businesses that are usually required to register in the GoAML portal:
- Financial Institutions
- Non-Banking Financial Institutions (NBFIs)
- Real Estate Businesses
- Precious Metals Dealers
- Legal and Accounting Professionals
- Gambling Institutions
- Corporate Service Providers
- Other Non- Financial Businesses and Professions dealing with large transactions
- Digital/Virtual Asset Service Providers
