Anti money laundering

Topics: Money laundering, Crime, Bank Secrecy Act Pages: 52 (17085 words) Published: November 8, 2013
Executive Summary

This document emphasize on Anti Money laundering – set of law or procedure to prevent any illegal action on the income. It has been organized in such a manner that a common person can understand the cons of the laundering and protect self or organization from any kind of laundering action.

Basic Overview
Money laundering is the process of changing large amounts of money that have been gained through illegitimate means. Money evidently gained through crime is "dirty" money, and money that has been "laundered" to appear as if it came from a legitimate source is "clean" money. Money can be laundered by many methods, which vary in complexity and sophistication. Different countries may or may not treat tax evasion or payments in breach of international sanctions as money laundering. Some jurisdictions differentiate these for definition purposes, and others do not. Some jurisdictions define money laundering as obfuscating sources of money, either intentionally or by merely using financial systems or services that do not identify or track sources or destinations. Other jurisdictions define money laundering to include money from activity that would have been a crime in that jurisdiction, even if it was legal where the actual conduct occurred. For example, under British law, spending proceeds from a bull fight in Spain constitutes money laundering because the bull fight would have been illegal if it had been conducted in the United Kingdom.[1]This broad brush of applying money laundering to incidental, extraterritorial or simply privacy-seeking behaviors has led some to label it financial thoughtcrime.[2] Many regulatory and governmental authorities issue estimates each year for the amount of money laundered, either worldwide or within their national economy. In 1996, the International Monetary Fund estimated that two to five percent of the worldwide global economy involved laundered money. The Financial Action Task Force on Money Laundering (FATF), an intergovernmental body set up to combat money laundering, stated, "Overall, it is absolutely impossible to produce a reliable estimate of the amount of money laundered and therefore the FATF does not publish any figures in this regard."[3] Academic commentators have likewise been unable to estimate the volume of money with any degree of assurance.[4] Various estimates of the scale of global money laundering are sometimes repeated often enough to make some people regard them as factual—but no researcher has overcome the inherent difficulty of measuring an actively concealed practice. Regardless of the difficulty in measurement, the amount of money laundered each year is in the billions (US dollars) and poses a significant policy concern for governments.[4] As a result, governments and international bodies have undertaken efforts to deter, prevent, and apprehend money launderers. Financial institutions have likewise undertaken efforts to prevent and detect transactions involving dirty money, both as a result of government requirements and to avoid the reputational risk involved. Issues relating to money laundering have existed as long as there have been large scale criminal enterprises. Modern anti–money laundering laws have developed along with the so-called modern War on Drugs.[5] In more recent times anti–money laundering legislation is seen as adjunct to the financial crime of terrorist financing in that both crimes usually involve the transmission of funds through the financial system (although money laundering relates to where the money has come from, and terrorist financing relating to where the money is going to).

Anti Money Laundering (AML) is a term to describe the legal controls that require all banks operating in the country and other regulated entities to prevent and report money laundering. The primary purpose of the AML Program is identifying, mitigating and managing the risks. It may reasonably face of its products, services and assets being...
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