Before going ahead with understanding Anti-money laundering we must know what money laundering is?
Money laundering is the process of making illegal money appear to have come from legitimate sources or legal sources.
Now you wonder what is illegal money?
So illegal money is the money which is obtained from illicit (unlawful or illegal) activity or source.
Now let’s understand Anti Money Laundering.
Anti Money Laundering is the measure to curb or prevent money laundering.
To combat money laundering there is an international body called Financial Action Task Force (FATF) established in 1989.
FATF published recommendations to combat money laundering, Terror Financing, Corruption, etc. FATF keeps on regularly reviewing illegal activities and continuously strengthening its Recommendation to address recent trends of money laundering. Currently, FATF includes 37 member nations including India.
According to FATF Recommendation – Every financial institution should do thorough checks on their client’s details, and KYC checks.
Every country must have Financial Intelligence Unit (FIU) to work against money laundering and related crimes and collaborate with FATF and FIU of other countries.
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