Anti-money laundering (AML) software

Anti-money laundering (AML) software is a type of computer program used by financial institutions to
analyze customer data and detect suspicious transactions. Anti-laundering systems filter customer data,
classify it according to level of suspicion and inspect it for anomalies. Such anomalies would include any
sudden and substantial increase in funds or a large withdrawal. In both the United States and Canada, all
transactions of $10,000 or greater must be reported. Smaller transactions that meet certain criteria may
be also be flagged as suspicious. For example, a person who wants to avoid detection will sometimes
deposit a large sum as multiple smaller sums within a brief period of time. That practice, known as
"structuring," will also lead to flagged transactions. The software flags names that have been blacklisted
and transactions involving countries that are thought to be hostile to the host nation. Once the software
has mined data and flagged suspect transactions, it generates a report.

Important aspects of AML software:-

 Suspicious Activity Detection

 Know Your Customer (KYC) Management
 Caution / Watch List Management & Checking Of Customers / Prospects
 Customer Risk Categorization
 Link Tracing
 Large Cash Transaction Reporting
 Regulatory Reporting
 KPI / KRI Dashboards for Chief Compliance Officers
 Online AML and List Check for Remittance Transactions

 Anti-money laundering (AML) is a term mainly used in the financial andlegal industries to

describe the legal controls that require financial institutions and other regulated entities to prevent
or report money laundering activities. Anti-money laundering guidelines came into prominence
globally after the September 11, 2001 attacks and the subsequent enactment of the USA
PATRIOT Act.

 Today, most financial institutions globally, and many non-financial institutions, are required to
identify and report transactions of a suspicious nature to the financial intelligence unit in the
respective country. For example, a bank must perform due diligence by verifying a customer's
identity and monitor transactions for suspicious activity. To do this, many financial institutions
utilize the services of special software, and use the services of companies such as C6 to gather
information about high risk individuals and organizations.United States federal law related to
money laundering is implemented under the Bank Secrecy Act of 1970 as amended by anti-
 money laundering acts up to the present. Many people have confused Anti-Money Laundering
(AML) with Anti-Terrorist Financing (ATF). Under the Bank Secrecy Act of USA, Money
Laundering and Terrorist Financing are classified when financial institutions fileSuspicious Activity
Reports (SAR) to Financial Crimes Enforcement Network (FinCEN) which is a US government
agency. To effectively implement AML and ATF measures, The US government encourages
financial institutions to work together for AML and ATF purposes in accordance with Section
314(b) of the USA PATRIOT Act. However, since financial institutions are required by law to
protect the privacy of their clients, section 314(b) cooperation has not been generally adopted by
financial institutions. To overcome this obstacle, the United Crimes Elimination Network (UCEN)
has been established by AML and ATF professionals to achieve this global cooperation goal in
compliance with the privacy laws of most countries.

 In different countries and, depending on the activity, demand different action. For example; in the
US a deposit of US$10,000 or more requires a CTR (Currency Transaction Report), in Europe it
is EUR 15,000, and in Switzerland it is CHF 25,000. In some countries there is no CTR
requirement. Suspicion of ML activity in the US requires the submission of a SAR, while in
Switzerland a SAR will only get filed if that activity can be proved. As a result, thousands of SARs
are filed daily in the US, while in Switzerland the rate is much lower.

 The United Nations Office on Drugs and Crime maintains the International Money Laundering

Information Network, a website that provides information and software for anti-money laundering
data collection and analysis.[1] The World Bank has a website in which it provides policy advice
and best practices to governments and the private sector on anti-money laundering issues. [2]
MONEY LAUNDERING
If you were to conduct a survey in the streets asking the above question, the general
response from most people would be that they had no idea. This typical response is one
of the problems the Government has in combating this type of crime. It seems to be a
victimless crime. It has none of the drama associated with a robbery or any of the fear
that violent crime imprints upon people’s psyche and yet, money laundering can only
take place after a predicate crime (such as a robbery or housebreaking or drug dealing)
has taken place. It is the lack of information about money laundering that is available to
the person on the street, which makes it an invisible problem and hence difficult to
tackle.

There are various definitions available which describe the phrase ‘Money Laundering’.
Article 1 of the draft European Communities (EC) Directive of March 1990 defines it as:

the conversion or transfer of property, knowing that such property is derived from
serious crime, for the purpose of concealing or disguising the illicit origin of the
property or of assisting any person who is involved in committing such an offence or
offences to evade the legal consequences of his action, and
MONEY LAUDRING DEFINITIONS
concealing the source of illegally gotten money
wordnetweb.princeton.edu/perl/webwn

Money laundering is the process of changing large amounts of money obtained from crimes, such as
drug trafficking, into origination from a legitimate source. It is a crime in many jurisdictions with varying
definitions. It is a key operation of the underground economy.
en.wikipedia.org/wiki/Money_laundering

: The act of engaging in transactions designed to obscure the origin of money that has been obtained
illegally
en.wiktionary.org/wiki/money_laundering

The conversion of large amounts of money the source of which one wants to hide (eg, from drug
trafficking) into a form that appears to be legitimate. The process often involves multiple international
transactions across currencies and financial institutions in order to obscure the source.
www-personal.umich.edu/~alandear/glossary/m.html

The conversion or transfer of property derived from a criminal offense for the purpose of concealing, or
disguising, the illicit origin of the property, or of assissting any person who is involved in the commission
of such an offense, to evade the legal consequences of the action; the ...
www.americanbanker.com/glossary/m.html

Since the 8th March 2005 Auctioneers and Estate Agents are now officially "designated bodies". In effect
this means that individuals and companies engaged in providing such services must comply with
provisions of The Criminal Justice Act 1994 relating to anti-money laundering provisions.
www.foxrockproperty.com/index.php

There is international concern that the multimillionaire Osama bin Laden and his wealthy backers have
created a sprawling global network of funds. ...
www.guardian.co.uk/world/2001/sep/27/afghanistan.terrorism5

This is the process by which "dirty money" generated by criminal activities is converted through
legitimate businesses into assets that cannot be easily traced back to their illegal origins.
www.efgi.com/glossary/m.html

is the practice of engaging in financial transactions in order to conceal the identity, source, and/or
destination of money, and is a main operation of the underground economy.
india.smashits.com/wikipedia/Money-laundering

means engaging directly or indirectly in a transaction that involves money or property which is proceeds
of crime or receiving, processing, conceiving, disguising, transforming, converting, disposing of,
removing from, bringing into any territory, money or property that is the proceeds of crime.
www.dwaf.gov.za/Docs/Other/RISDP/Glossary.doc
The process of disguising money obtained from criminal activity.
www.bankofscotlandhalifax.co.uk/sharedealing/Education_Centre/glossary.asp

PPS Investments is required by anti-money laundering legislation, to verify the identity of and to obtain
certain information from prospective clients. Users will be required to give such information as is
required by the legislation prior to making use of the Service. ...
https://www.ppsisecure.co.za/UnSecure/Terms.htm

DEFINITIONS OF LAUNDERING ON THE WEB:

washing clothes and bed linens
wordnetweb.princeton.edu/perl/webwn

The act, or occupation, of one who launders; washing and ironing

en.wiktionary.org/wiki/laundering

launder - wash: cleanse with a cleaning agent, such as soap, and water; "Wash the towels, please!"

launder - convert illegally obtained funds into legal ones

wordnetweb.princeton.edu/perl/webwn

launder - A washerwoman; A trough used by miners to receive powdered ore from the box where it is
beaten, or for carrying water to the stamps, or other apparatus for comminuting (sorting) the ore; To
wash; to wash, and to smooth with a flatiron or mangle; to wash and iron; To lave; to wet; To ...
en.wiktionary.org/wiki/launder

Laundering is the process of cleaning illicitly gained money so that it appears to others to have come
from, or to be going to, a legitimate source.
www.personalitybudgeting.com/Financial_Terms.html

The act of washing an item such as a fabric or garment, with soap or detergent, for the purpose of
removing dirt.
www.eearneasy.com/textile-j-n.html

launder - A person (of either sex) who washes linen.

home.olemiss.edu/~tjray/medieval/feudal.htm

launder - Wooden box for the conveyance of water.

www.martinroe.pwp.blueyonder.co.uk/glossary.htm
he Money Laundering Control Act of 1986 (Public Law 99-570) is a United States Act of Congress that
made money laundering a Federal crime. It was passed in 1984. It consists of two sections, 18
U.S.C. § 1956 and 18 U.S.C. § 1957. It enhanced the Bank Secrecy Act by making it a crime to structure
transactions in such a way as to avoid the reporting requirements of that Act.