Anti-Money Laundering Definition (AMLD)

Posted in Anti-Money Laundering (AML) on May 31, 2024

Do you want to know what is Anti-Money Laundering Definition (AMLD)? The term anti-money laundering, or AML, refers to the laws, regulations and procedures intended to prevent criminals from disguising illegally obtained funds as legitimate income. Though anti-money laundering laws cover a limited range of transactions and criminal behavior, their implications are far-reaching.

For example, Anti Money Laundering regulations require banks and other financial institutions that issue credit or accept customer deposits to follow rules that ensure they are not aiding money-laundering. Other examples are manifold and they cover all types of businesses and go far beyond financial services.

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What is Anti-Money Laundering Definition (AMLD)

Anti Money Laundering  laws and regulations target criminal activities including market manipulation, trade in illegal goods, corruption of public funds and tax evasion, as well as the methods used to conceal these crimes and the money derived from them.

The main purpose of AML regulations is to prevent money laundering. Regulators around the world have published and are continuously publishing many pieces of legal work to achieve this goal and companies are required to comply with these laws and regulations.

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Stages Of Anti-Money Laundering

The money laundering process includes 3 stages: Placement, Layering, and Integration.

  • Placement puts the “dirty cash” into the legitimate financial system and at the same time, hiding its source.
  • Layering or “structuring” hides the source of the money through a series of transactions and accounting tricks. This activity involves breaking the funds into small transactions and makes it difficult to detect the laundering activity.
  • In the final step, integration, the now-laundered money is withdrawn from the legitimate account and real records to be used for whatever reasons the criminals have as a top priority for it.