quora AML Compliance Program

AML Compliance Program

An Anti Money Laundering (AML) compliance program is a set of policies and procedures…


An Anti Money Laundering (AML) compliance program is a set of policies and procedures adopted by financial institutions and businesses to stop money laundering activities. It helps organizations combat financial crime such as money laundering and terror financing. Global laws and regulations such as the Bank Secrecy Act (BSA), the USA Patriot Act, the European Union’s fifth, and sixth Anti Money Directives push financial institutions to invest in AML compliance programs.

Purpose of AML Compliance Program

An AML program provides an active defense against fraudsters and criminal entities. It provides a toolkit to take down tax evasion and money laundering by detecting suspicious activities and reporting them to concerned local or international authorities such as FinCEN.

The compliance program should not only strengthen internal systems but also focus on developing controls to effectively detect and prevent financial crimes. A robust program takes into account state-of-the-art AML and CTF standards.

An AML compliance program built on a firm understanding of regulations, and certified by compliance experts can create a sense of security across all levels of the organizations.

Pillars of the Compliance Program

The senior management at an organization plays a key role in developing an anti-money laundering compliance program. Understanding the specific needs of the company can help in knowing the compliance requirements. Even though there may be certain factors affecting the shape and size of the program, they all align with some key principles set by AML regulations.

AML Controls

A good AML compliance program is one which focuses on developing better tools to detect and report financial fraud. The ongoing evaluation of these mechanisms ensures the process is effective and fit from the security point of view. Internal AML controls play an active role in meeting compliance standards across the organization. AML controls help the company employees understand Customer Due Diligence standards and how to better utilize policies to guarantee AML compliance.

Some AML controls are:
1. AML screening of customers at the time of registration,
2. Customer verification for transaction authentication,
3. Ongoing AML screening to maintain an updated risk profile of customers, and
4. Reporting transactions above the predefined threshold.

AML Screening of Individuals and Corporates

AML program specifies the procedures and protocols of AML screening. AML checks are performed by screening individuals and businesses against AML checklists. These solutions are equipped with thousands of global watchlists, sanctions and PEP lists, enabling the organization to perform robust AML checks in a few clicks. AML screening solutions are a good means of performing these checks.

Internal and External Audits

An AML compliance program includes ongoing audits by external regulatory organizations. A standard time for this procedure to take place is 12-18 months. But, if the company operates in a high-risk space, frequent audits are common. The internal audits within the company make the organization ready for bigger inspections and consist of an evaluation of employees and financial reporting systems regularly.

AML Compliance Expert

An AML compliance officer is an integral part of the Anti Money Laundering program. Some responsibilities of the AML official are listed below:

  • Detecting suspicious activities related to transactions and their timely reporting.
  • Conducting AML training of employees to help them understand and prevent financial crime.
  • Ensure AML obligation within the organization.
  • Make a roadmap to carry out the company’s AML compliance procedure.
  • Keep a check on the current AML regulations and updating internal policies.

Monitor your customers AML risk profile in real-time and stay ahead of the regulatory compliance requirements.