AML (Anti-Money Laundering) encompasses a set of laws, regulations, and procedures aimed at preventing criminals from disguising illegally obtained funds as legitimate income. Financial institutions and other regulated entities are required to implement robust AML policies to detect, report, and prevent money laundering activities. These measures include customer due diligence (CDD), monitoring of transactions, reporting of suspicious activities, and maintaining records for regulatory scrutiny. AML regulations are crucial in combating financial crimes such as drug trafficking, terrorism financing, and corruption, ensuring the integrity of the financial system. Compliance with AML standards is mandated by various international organizations, such as the Financial Action Task Force (FATF), and national regulatory bodies, contributing to a coordinated global effort to curb illicit financial activities.
