The need of Anti money laundering programs in financial sectors

Performance Inc Kuwait Consulting W.L.L aims to make organizations, aware on Money Laundering acts and Anti Money Laundering programs as prevention for it, especially for the organizations in financial sector
By: Performance Inc Kuwait Consulting WLL
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KUWAIT CITY - Dec. 2, 2013 - PRLog -- Introduction

Money laundering is the generic term used to describe the process by which criminals disguise the original ownership and control of the proceeds of criminal conduct by making such proceeds appear to have derived from a legitimate source. The objective of the criminalization of money laundering is to take the profit out of crime. Here Performance Inc Kuwait Consultingdraws out why AML program is in need for today’s business, mainly in financial sectors

The offence of money laundering

Money laundering offences have similar characteristics globally. There are two key elements to a money laundering offence:

1.      The necessary act of laundering itself i.e. the provision of financial services; and

2.      A requisite degree of knowledge or suspicion (either subjective or objective) relating to the source of the funds or the conduct of a client.

The act of laundering is committed in circumstances where a person is engaged in an arrangement and that arrangement involves the proceeds of crime. The requisite degree of knowledge or suspicion will depend upon the specific offence but will usually be present where the person providing the arrangement, service or product knows suspects or has reasonable grounds to suspect that the property involved in the arrangement represents the proceeds of crime.

How is money laundered?Money laundering is the act of moving illegally obtained assets through the financial system to disguise their origin and make them appear legitimate. Money Laundering occurs in three stages.

1. Placement: may involve RMLOs by the presentation of forged documents, laundered money, structuring or straw buyers. It also can consist of introducing illegally derived assets into such businesses as brokerage firms, jewelers, casinos, race tracks or by buying high value goods or services, for example: precious metals (gold), automobiles or insurance. Money laundering is most vulnerable to detection and seizure at this stage.

2. Layering: this phase is the movement of funds in an effort to further disguise the audit trail and ownership of funds. In this stage, assets that have been ‘placed’ are liquidated and transferred to other vehicles such as real estate, money orders, Traveler’s checks, brokerage accounts and additional bank accounts. This makes it more difficult to trace the money back to its original source.

3. Integration: to further obscure their source, the assets are again converted to give the appearance of legitimacy.   An important factor connecting the three stages of this ‘process’ is the ‘paper trail’ generated by financial transactions. Criminals try to avoid leaving this ‘paper trail’ by avoiding reporting and record keeping requirements and by the use of false documents and misrepresentations.

Kuwait and AML Deficiencies

In June 2012, Kuwait made a high-level political commitment to work with the FATF and MENAFATF to address its strategic AML/CFT deficiencies. Kuwait should continue to work on implementing its action plan to address these deficiencies, including by: (1) adequately criminalizing terrorist financing; (2) implementing the Terrorist Financing Convention; (3) establishing and implementing adequate procedures to identify and freeze terrorist assets; (4) ensuring that appropriate laws and procedures are in place to provide mutual legal assistance; (5) establishing effective customer due diligence measures; (6) ensuring a fully operational and effectively functioning Financial Intelligence Unit (FIU), in particular addressing the operational autonomy of the FIU; and (7) ensuring that financial institutions are aware of and comply with their obligations to file suspicious transaction reports in relation to money laundering and terrorist financing.

Performance Inc Kuwait Consultingcan offer its services in preventing money laundering acts by providing the best Anti Money Laundering programs that’s in need of today’s financial sectors

Anti money laundering programs:

An anti-money laundering (AML) program is a set of procedures designed to guard against someone using the firm to facilitate money laundering or terrorist financing. The main components of the course that we included are:

1) Internal policies, procedures, and controls reasonably designed to assure compliance with the Bank Secrecy Act and implementing regulations;

2) Appointment of a designated compliance officer to oversee the program's day-to-day operations;

3) An ongoing training program; and

4) An independent audit. Etc...


AML is not receiving the board-level focus it used to, but its value should not be under-estimated. AML can inform a bank’s risk appetite, critical to determining objectives and prioritizing spends. AML can help to react to geopolitical events and cross-border regulatory developments. Money laundering is a concern for every country. Many countries around the world have implemented strict anti-money laundering requirements and laws to minimize the risk. Successful organizations provide their employees with comprehensive AML training that reviews the laws, requirements and procedures all employees must follow to prevent, detect and report money laundering.

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