What Are the Important Anti-Money Laundering Terms That One Should Know?
Financial and non-financial industries face big problems with money laundering and terrorist funding. Every country and every company work hard to stop these crimes. They set up strong anti-money laundering (AML) policies and rules. Still, many businesses and their teams don’t know enough about the important anti-money laundering terms. Mubarak Al Ketbi (MAK) Auditing helps people understand these terms and stay safe.
Why Should One Be Aware of Important Anti-Money Laundering Terms?
Every employee and every boss should know AML terms well. These days, any company can face money laundering risks. If you understand AML terms, you can protect your business. You also understand the strategies and rules your company uses to stop money laundering. Good knowledge leads to better action and strong compliance.
Anti-Money Laundering Dictionary
Here’s a list of important AML terms you must know:
- Money Laundering: Hiding illegal money’s source by passing it through legal transactions. Criminals do this to make “dirty” money look “clean.”
- AML – Anti-Money Laundering: All the rules, systems, and controls to stop money laundering.
- AML Compliance Officer: A senior team member who checks if the company follows all AML rules and policies.
- AMLID: This stands for Anti-Money Laundering International Database. It holds global AML laws in different languages. It helps officers compare and study AML rules.
- CTF (Counter Terrorist Financing): Activities and laws that fight terrorist funding. Countries use CTF rules to block money for terrorism.
Money Laundering Process
Money laundering always happens in three stages:
- Placement: Criminals put illegal money into the financial system.
- Layering: They move money through many transactions to hide its source.
- Integration: The money comes back into the economy as “clean” funds.
- Identity Theft: Criminals steal personal and financial data to commit fraud or money laundering.
- Criminal Proceeds: Any asset or document criminals get from their crimes.
- RBA (Risk Based Approach): A way for companies to spot and reduce money laundering risks.
- Smurfing: Splitting big sums into small amounts, then spreading them across different accounts to avoid detection.
- AML or CTF Compliance Audit: Checking if a company’s AML or CTF policies work well and meet legal standards.
- Front Company: A company set up to hide the real owner’s identity or crime connections.
- Gatekeepers: People like lawyers or accountants who help move money and may help criminals hide illegal money. You must watch gatekeepers closely.
- FIU (Financial Intelligence Unit): A national agency that collects and analyzes reports about suspicious transactions.
- SAR (Suspicious Activity Report): A report banks or companies send to FIUs when they see possible money laundering.
More AML Knowledge
You can stop financial crimes by learning these AML terms. Companies that know these words take stronger steps to keep their business safe.
How to Stay Compliant With Anti-Money Laundering Laws
You should follow these tips to protect your business:
- Teach employees about AML risks.
- Set clear AML policies and controls.
- Check every suspicious transaction.
- Use RBA to spot high-risk clients or activities.
- Report SARs to the FIU when you see something wrong.
- Review your AML system with regular audits.
- Work with professionals like Mubarak Al Ketbi (MAK) Auditing.
For more information:
- Visit our office: Saraya Avenue Building – Office M-06, Block/A, Al Garhoud – Dubai – United Arab Emirates
- Or contact/WhatsApp: +971 50 276 2132
