ANTI-MONEY LAUNDERING

Anti-Money Laundering

Table of Contents

Introductory Material3

The Problem of AML Compliance: Poor Performance by Many Nations3

IMF, World Bank and Egmont Initiatives5

Wolfsberg Principles5

The Compliance Program and Its Constituent Parts6

Core Examination Overview and Procedures for Assessing the BSA/AML Compliance Program6

Core Examination Overview and Procedures for Regulatory Requirements and Related Topics6

Expanded Examination Overview and Procedures for Consolidated and Other Types of BSA/AML Compliance Program Structures6

Expanded Examination Overview and Procedures for Products and Services7

Expanded Examination Overview and Procedures for Persons and Entities7

CIP7

CDD and Enhanced Due Diligence8

STRs; Record-keeping9

Transparency Issues such as Shell Banks, Beneficial Owners9

PEPs9

Non-conviction based civil forfeiture10

Asset Recovery11

Taxation as a Weapon against Organized Crime and Kleptocrats12

Privacy and Compliance12

Conclusion13

Anti-Money Laundering

Introductory Material

Corruption is such an evil that it has dampening effects on society. It distorts market, leads to violation of human rights, affects the quality of life, leads to terrorism and creates several thoughts to human security and the overall society. Almost all countries are affected with the evil of corruption, but it is usually common in developing countries. The reason why it produces such bad results is the fact that it diverts the fund intended for development, in favor of government officials.

Corruption is a key element in that lead to an underperformance of the economy and is a major obstacle towards poverty alleviation. United Nation Convention against Corruption will send a clear message to all countries and their officials the international community and organizations want to prevent and control corruption. This convention against Corruption will help countries resolve significant issues faced by various countries.

United Nation Convention against Transactional Organized Crime will provide strong and dedicated efforts in solving the issues countries are currently facing. It provides a set of rules and standards that a country can follow, to systematically remove these problems. It provides a stronger framework for countries to have a stronger cooperation between the states to solve the issue of corruption. In these corrupt officials would not get an opportunity to further use the resources of the country, because this problem is mostly faced by the developing countries.

United Nation Convention has raised the seriousness of the issue. It has discussed the threats it poses on society and its security. It has also discussed the link between corruption and other forms of crime which is often termed as organized crime including that of money laundering.

It also involves crimes such as the corruption that involve the corruption of assets, which are the strategic strengths of a nation. It can threaten the political and economic stability of an individual.

The Problem of AML Compliance: Poor Performance by Many Nations

Nations are now taking serious steps to solve the problem of Anti-money laundering. This is line with the Financial Action Task Force (FATF) with 40 recommendations, which countries have to comply with.

A study of the 93 major countries from January 2001to November 2010 was conducted. It was found out that these countries are not following FATF standards. Only 24% of the total countries were very high on AML compliance over a 10 year ...