Importance of AML Training

Last Updated on Nov 15 , 2024, 2k Views

Anti Money Laundering

Illegally obtained money when transferred to the legal system is known as money laundering. It involves processing criminal proceeds and hiding the illegal origin by disguising it with investments in foreign banks or legitimate businesses. Often the money is used to fund criminal and terrorist activities. It is important to note that authorities face a huge challenge while detecting money laundering; as per recent UN statistics, the government cannot detect 90% of the laundered money. The statistics reveal the magnitude of the government’s problem and the challenges it has to face while preventing financial manipulation, which is further used for serious crimes like financial terrorism. It has been estimated that the approximate amount of money laundered ranges between $800 and $2 trillion! That’s an incredibly huge amount.

Every country has its own AML/ CFT rules, which businesses must diligently follow. These rules are amended regularly to keep businesses ahead of the criminals who are always looking for new ways to launder money.Businesses can take several steps to prevent money laundering. One crucial step towards it is to create massive awareness about the anti-money laundering laws and provide proper training. AML training is vital to understand to detect financial frauds and nab criminals. The Financial Action Task Force- FATF, established in 1989, has provided 40 guidelines to prevent money laundering. The 15th recommendation of FATF40 includes creating internal policies, procedures, and measures that involve regular AML training of the employees.

Noteworthy Points To Consider Before Training

AML training includes information that helps employees become aware of the importance of training and the anti-money laundering laws for their organisation. Choosing the best AML training module is essential for a business. With the proper training, employees can immediately identify any suspicious transactions and unearth evidence of money laundering. They will become familiar with the correct customer verification process, identify the risks associated with their businesses, and correctly implement the rules and regulations.

The company offering AML training should consider some critical points for the best training.

The messages to be conveyed with the training.

The industry to which the company belongs.

The challenges the company is facing with AML compliance

The information that needs to be dispensed to the employees.

High-risk areas that the business should target with AML training.

Identify the proper balance between classroom training and new technologies training.

Onsite training requirement.

Duration of training sets for AML Training.

Importance of AML Training

Criminals devise new ways to find easy ways for money laundering. They keep track of the legal loopholes and try to swindle money. The AML training acquaints the participants with the legal shortcomings and how to deal with them. The training also provides the latest information on the AML rules and regulations. These steps help keep the employees ahead of the money launderers and prevent financial crimes.

This training should be mandatory for people who communicate directly and contact people at high risk of laundering. It includes Banks’ Compliance officers, Exchange Officers, Audit, Foreign Trade, and Investment Banks Employees. The training should also be provided for Fund Managers, Precious Metals Exporters, and Foreign Exchange Traders.

AML Training should be exhaustive and includes rules and regulations for CDD- Customer Due Diligence, KYC- Know Your Customer, Know Your Employee, and Identifying PEP- Politically Exposed Persons. It also includes the Rating scale of Suspicious Transactions, Rating Scale of Risky Customer, AML/OFAC risk assessments, measures for PEP, and current regulations. During the AML training, the participants will know how AML laws and regulations work. They will get acquainted with the AML framework and be better equipped with updated knowledge to deal with financial crimes.

Importance of AML Training