ANTI MONEY LAUNDERING (AML)

 Money laundering is the illegal process of making "dirty" money appear legitimate.
 Online banking and cryptocurrencies have made it easier for criminals to transfer and
withdraw money without detection.
 The process of laundering money typically involves three steps: placement, layering, and
integration.
 In one common form of money laundering, called smurfing (also known as
"structuring"), the criminal breaks up large chunks of cash into multiple small deposits.
 Money laundering can also be accomplished through the use of currency exchanges, wire
transfers, and "mules"—cash smugglers who sneak large amounts of cash across borders
and deposit them in foreign accounts.
 Shell companies are inactive companies or corporations that essentially exist on paper
only.
 Money can also be laundered through online auctions and sales, gambling websites, and
virtual gaming sites. Ill-gotten money is converted into gaming currency, then back into
real, usable, and untraceable "clean" money.
 Cryptocurrencies, such as Bitcoin, are increasingly being used in blackmail schemes, the
drug trade, and other criminal activities.
 Global money laundering transactions account for roughly $800 billion to $2 trillion
annually or 2% to 5% of global GDP.
 The Association of Certified Anti-Money Laundering Specialists (ACAMS) offers a
professional designation known as a Certified Anti-Money Laundering Specialist
(CAMS).
 AML regulations require financial institutions to monitor customers' transactions and
report suspicious financial activity.
 Anti-money laundering initiatives rose to global prominence in 1989, when a group of
countries and organizations formed the Financial Action Task Force (FATF).
 In October 2001, following the 9/11 terrorist attacks, FATF expanded its mandate to
include combating terrorist financing.
 Another important organization in the fight against money laundering is the International
Monetary Fund (IMF).
 One rule in place is the AML holding period, which requires deposits to remain in an
account for a minimum of five trading days.
 The institutions must verify the origin of large sums, monitor suspicious activities, and
report cash transactions exceeding $10,000.
 While closely related, there is a difference between 'anti-money laundering' (AML) and
'know your client' (KYC) rules. In banking, KYC rules are the steps institutions must take
to verify their customers' identities. AML operates on a broader level.