The importance of anti-money laundering policies

anti money laundering policies

With financial crime more prevalent than ever, it is important that both companies and governments develop tactics to curb it. Probably the most common way of doing so is to implement anti-money laundering policies that prevent the smuggling of illegally-obtained funds. Most countries now have their own anti-money laundering policies, and many require that all financial institutions strictly abide by these policies in order to support efforts against financial crime.

Anti-money laundering policies typically require most entities that complete financial transactions to keep thorough records of their clients’ accounts and activities. If they come across any information that appears to be suspicious, they are required to report it to the government for further investigation. Financial institutions are crucial for the collection of financial intelligence, and the public sector greatly depends on them in order to compile data.

Additionally, anti-money laundering policies require financial institutions to periodically file reports regarding their clients and completed transactions. These reports vary by country, but many of them are quite similar. For instance, in the United States, certain paperwork must be completed for transactions that involve over $10,000. Similarly, if a transaction appears to be otherwise suspicious—even if it is not over $10,000—a bank employee must file a suspicious activity report (SAR).

Almost all countries with anti-money laundering policies have suspicious activity reports, and many of them also have certain pieces of legislation that protect banks as well.

Previously, banks had been wary about providing the government with clients’ personal information as they feared potential liability for doing so. Now, however, a majority of states have passed laws that allow banks to forward on client information without facing any backlash or legal repercussions. This has greatly simplified governments’ efforts to implement effective anti-money laundering policies and acquire financial intelligence.

It is important to note that banks are not the only financial institutions required to follow anti-money laundering policies and fill out SARs. Other institutions such as currency exchange firms, casinos, insurance agencies, and accountants must also follow certain anti-money laundering regulations. This is because they often complete large transactions and are likely to have direct contact with the individuals or companies that are responsible for financial crime. By gathering financial intelligence from these entities as well, the public sector is able to track down criminals more efficiently and, ideally, uncover legal violations before they reach a large scale.

Technology has become a critical part of anti-money laundering policies, because it has made it much easier for institutions to comply with regulations. By using special compliance platforms, such as ComplyAdvantage, companies are now able to easily research their clients and ensure that they are not doing business with criminals. This major advancement is becoming an essential tool for fighting financial crime.

Get Started Now

Our AML Solutions Will Help You Remain Compliant With The Most Up-To-Date AML Regulations.



Share your thoughts and start a conversation.

Leave a Reply

Related articles:

anti money laundering guidance
May 7, 2014

Anti-Money Laundering Guidance

Anti-Money Laundering Guidance Various government agencies and interest groups publish information regarding anti-money laundering. Australia:…
Read More
July 1, 2014


Why is Dodd-Frank important? The Dodd-Frank Wall Street Reform and Consumer Protection Act, commonly referred to as…
Read More
European Market Infrastructure Regulation
July 1, 2014

European Market Infrastructure Regulation

An Overview of the European Market Infrastructure Regulation (EMIR) The European Market Infrastructure Regulation, otherwise…
Read More
July 1, 2014

The Foreign Account Tax Compliance Act (FATCA)

The Effects Of FATCA On Foreign Accounts The Foreign Account Tax Compliance Act, otherwise known…
Read More
EU flag among the grey sky
July 1, 2014


Markets in Financial Instruments Directive (MiFID) The Markets in Financial Instruments Directive (MiFID) was created…
Read More
July 2, 2014


How MiFID II has affected the European investment market One of the most influential laws…
Read More
May 25, 2016

The Fourth Anti-Money Laundering Directive (4AMLD)

What is 4AMLD and What Does it Mean for Regulated Industries? The European Union Fourth…
Read More
cryptocurrency regulations around the world
July 4, 2018

Crypto Regulations Around The World

Crypto Regulations Around The World Learn how different nations approach coin and exchange regulation and…
Read More
September 6, 2018

The 5th EU Anti-Money Laundering Directive (5AMLD)

5AMLD - 5th EU Anti-Money Laundering Directive The Fifth Money Laundering Directive (5MLD) will come…
Read More
November 8, 2018


Managing AML Challenges Under GDPR With GDPR in effect, financial institutions in the EU and…
Read More
FATF Recommendations
June 18, 2019

FATF Recommendations

FATF Recommendations: What You Need To Know The Financial Action Task Force (FATF) an international, intergovernmental…
Read More
June 25, 2019

The Payment Services Directive 2

PSD2: What It Is And Why It Matters PSD2 has already had a significant impact on…
Read More

To make sure you get a great experience on our website, we use cookies. To confirm you consent to this, please click below. Read more about our Cookie Policy

The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.