For financial businesses, carrying out AML screenings is a must. However, the AML screening, it must be performed under the global AML compliances. A survey conducted from the PWC survey of 2018 reveals, some 2 to 5 percent of global GDP is lost to money launderers.
Owing to this reason, AML screening has been made obliged for the financial entities to follow.
Also, businesses, of all respective regions, are obliged in performing customer due diligence on their customers.
Businesses obliged to perform AML verification service for Anti Money Laundering:
Albeit, for every business, performing AML verification for the sake of anti money laundering is crucial. Some businesses, however, have their very survival depends on the AML screening. Such businesses are the financial organizations or simply the organizations, incorporating financial services.
Nevertheless, below is a list of such businesses mentioned, for the sake of clarity and removing any ambiguity, if any. However, the list following, it is best for our experience and knowledge:
● Banks and its subsidiaries
● Brokerage Houses
● Insurance Companies
● Foreign Exchanges
● Casinos (online as well)
● Online gaming platforms
● Non-banking mortgage lenders
● Fintech Businesses
● Cryptocurrency providers
● Valuables as gold, diamond, etc., dealers
● Agents dealing in the real-estate
Global AML Verification Regimes:
China:
China’s economy has not become one of the largest, strongest, and emerging economies overnight. However, one process that made the dream true of making the Chinese economy dominant, is the process of KYC (Know Your Customer). The Chinese AML compliance law is based majorly on the KYC, by making the use of identity verification protocols.
The Chinese law for curbing anti-money laundering entails the following laws:
● The liable businesses have to verify the identities of the customers by making identity verifications and document verifications
● Identity checks should be performed at regular intervals if the change in beneficiaries occurs
● Businesses are obliged to report the cash transactions that exceed the described threshold.
● Reporting the customers not being able to authenticate their identities
USA:
Bank Secrecy Act (BSA), has been found much effective in curbing money laundering in the USA. With the passage of time, it has been amended as well, as per the needs.
Some of the compliance regulations for AML, as advised by the Bank Secrecy Act, are:
● To perform customer due diligence is mandatory for all kind of the businesses
● Financial institutions, like the banks, ought to do more than other kinds of businesses, when it comes to performing customer due diligence. They are also expected in being a little more cautious, regarding their potential customer or clients, by performing customer identity verifications.
● Establishing a robust AML compliance program, within the organization, is mandatory and so is its maintenance and record-keeping
● Businesses to voluntarily share their financial information. However, the information shared would only be made use of, when there would be a need to perform identity verification.
UK:
The United Kingdom compliance rules are the following:
● Identity verifications of respective customers before having them onboard
● Establishing a robust aml checks program, within the organizations, is mandatory and so is its maintenance and record-keeping
● Briefing and training the employees
● Extra due diligence be performed on encountering PEP (Politically Exposed People)
● Due diligence to be performed on the customers online and overseas. This due diligence involves cross-checking the records with the international sanctions list and the terrorist lists
● Overseeing the AML compliance practices
Key TakeAways:
Businesses, especially the ones with the financial services, are at risk of losing millions of dollars of their money and their survival can be at stake too, because of non-compliance practices. AML screening and including AML verification services as part of the business operations is therefore essential.