Explore AML & Sanctions Compliance Resources

A series of recent money laundering scandals, including the Russian Laundromat and Danske Bank, have sparked international concern and calls for greater due diligence. The European Commission has been conducting risk assessments to identify and address the threat of cross-border money laundering and terrorist funding, and as a result, the European Union has adopted robust legislation to respond to these challenges at an international level, including a new package consisting of 4 pieces of legislation:

US Securities and Exchange Commission Chair Gary Gensler has famously described cryptocurrencies as the "Wild West" of the financial world due to the lack of laws and regulatory frameworks governing the digital currency space. In most instances, cryptocurrencies are subject to anti-money laundering policies and standards, and in 2021 crypto crime accounted for more than £10-billion losses. However, mainly legitimate crypto companies and exchanges are maintaining compliance with evolving regulations to demonstrate their trustworthiness and in anticipation of formal legal and regulatory directives that may be implemented in the future. Regulation is an important factor in building investor confidence, even for digital currencies. This article explores the regulations that have been implemented or are about to be implemented around the world.

The legislation and regulations that pertain to Ultimate Beneficial Ownership (UBO) verification are highly complex and challenging to navigate. The EU’s Fourth Anti-Money Laundering Directive states that holding more than 25% of the shares, interest or being a beneficiary of at least 25% of the legal entity’s capital gains gives individuals UBO status. This status requires verification as per the KYC onboarding and remediation process.

Banks, money transfer and fintech companies, credit and insurance organizations and gambling operators must ensure AML compliance and take every step to avoid money laundering. Playing a part in facilitating money laundering, however unintentionally, is a risk for every financial institution and professional. Most anti-money laundering compliance programs adopt a risk-based approach. They make a risk assessment and create a control program tailored directly to customers' risk levels during the onboarding process. Understanding the red flags associated with transactions and following a concise but thorough Know-Your-Customer Process can help professionals combat and avoid implications in economic crime.

Every business is required to have a sanctions screening strategy in place that is documented and reviewed regularly. The accuracy and depth of internal data is the key to an effective sanctions screening process, while technology remains an important part of identifying financial crime risks accurately and timeously.

Anti-money laundering risk assessments are crucial for preventing financial crimes and remaining compliant with regulations. This comprehensive guide will review the basics of an AML risk assessment by answering the following questions: What is an AML risk assessment? Why should you complete one? What steps are involved?