Anti-Money Laundering (AML) encompasses a comprehensive set of laws, regulations, and procedures established to prevent the generation of income through illegal activities. AML is designed to combat money laundering, a process where illicit funds are made to appear legitimate, often to finance criminal activities such as drug trafficking or terrorism. AML rules mandate organizations, especially financial institutions, to implement measures for detecting and reporting suspicious financial activities.
These measures include Know Your Customer (KYC) and Customer Due Diligence (CDD), essential in identifying and mitigating the risks associated with money laundering. AML legislation, evolving in response to the growing complexity of global financial transactions, plays a crucial role in curtailing the flow of illicit funds and ensuring the integrity of financial systems.