What exactly is Anti-Money Laundering?

Yasmin GogiYasmin Gogi    28 March 2022
What exactly is Anti-Money Laundering?

The criminal practise of making "black" money look legitimate rather than ill-gotten is termed as money laundering. To make unlawfully obtained monies look legitimate, criminals employ a range of money-laundering strategies.

Criminals may now send and withdraw money without being detected thanks to online banking and cryptocurrency. Money laundering prevention has evolved into a global endeavour that now includes terrorism financing as a goal.

Money laundering usually consists of three steps: placement, layering, and integration.

The "black money" is secretly injected into the legal financial system through placement. Through a sequence of transactions and bookkeeping procedures, layering hides the source of the money. The now-laundered money is removed from the real account in the final phase, integration, and utilised for whatever reasons the crooks have in mind.

Injecting unlawfully obtained cash into the flow of normal trade and finance allows criminals to benefit from their illicit activities, taints the international financial system, and undermines public confidence in the system's integrity.

Some criminals take advantage of the financial system to fund terrorists or terrorist actions. Terrorist financiers and other criminals exploit the legitimate financial system, especially in countries where national anti-money laundering/counter-terrorism financing (AML/CFT) instruments are non-existent or poor.

However, AML/CFT technologies can reveal criminal groups' infrastructure, webs of corruption, and terror-related schemes.

For instance, it provides to individuals who aid illegal and unlawful activity, provide authorities with route maps. It results in the recovery and confiscation of assets obtained illegally. It also supports broad and effective deterrence against a variety of illicit acts, including terrorism funding.

INL plays a critical role in the development of these skills and relationships.INL negotiates, assesses, and promotes successful application of international standards in global and regional forums as well as works with foreign governments to assist in the adoption, implementation, and strengthening of AML/CFT regimes, as well as the pursuit of legal cases, convictions, and confiscation of proceeds of crime.

INL also creates, funds, and enforces technical assistance projects across other nations to help them build AML/CFT capacity in response to traditional and emerging threats like kidnapping for ransom, wildlife trafficking, gaming industry exploitation, and misuse of non-bank financial products.


Disclaimer: Content posted is for informational & knowledge sharing purposes only, and is not intended to be a substitute for professional advice related to tax, finance or accounting. The view/interpretation of the publisher is based on the available Law, guidelines and information. Each reader should take due professional care before you act after reading the contents of that article/post. No warranty whatsoever is made that any of the articles are accurate and is not intended to provide, and should not be relied on for tax or accounting advice.

You can access Law including Guidelines, Cabinet & FTA Decisions, Public Clarifications, Forms, Business Bulletins for all taxes (Vat, Excise, Customs, Corporate Tax, Transfer Pricing) for all GCC Countries in the Law Section of GCC FinTax

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