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Anti-Money Laundering
Anti-Money Laundering refers to regulations and procedures designed to prevent the concealment of illicit funds.
Meaning in Practice
AML frameworks require institutions to monitor transactions, identify suspicious activity, and report it to authorities. They include customer due diligence, record-keeping, and internal controls.
Why It Matters
AML measures protect the integrity of the financial system and reduce criminal misuse of banking channels. Non-compliance can result in substantial penalties.
Market Impact
AML failures may lead to fines, license restrictions, and reputational damage. Strong AML systems enhance institutional credibility and cross-border trust.
Example
A bank flags unusually large cross-border transfers and reports them to authorities under AML obligations.
Related Terms
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