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IdentityMind Presents: Anti-Money Laundering

IdentityMind’s SuperiorAML solution includes Trusted Digital Identities, transaction monitoring, rules, case management, rules and alerts. IdentityMind increases both speed and accuracy of compliance and risk management.  While a fully manual AML process can be highly resource intensive with varying quality across individual analysts, ldentityMind delivers automated transaction monitoring that is fast and consistent across any volume. Rules can be set to automatically approve some transactions, decline others, and flag yet others for manual review as needed.

At the heart of our SuperiorAML solution is a SaaS platform that securely tracks the entities involved in each transaction (e.g. consumers, merchants, cardholders, payment wallets, alternative payment methods) to build identities with verified reputations.  These reputations, along with IdentityMind’s powerful automation capabilities, allow companies to easily and quickly identify and reduce potential fraud, to onboard accounts, to perform KYC, and identify and to report suspicious activity for money laundering.  

Enforcement Action Blog

SEC charges brokerage firm with AML failures

Joe Mont | June 12, 2017

The SEC has charged a Utah-based brokerage because it "routinely and systematically failed to file Suspicious Activity reports for stock transactions that it flagged as suspicious."

GRC Announcements Blog

CCO Checkup helps financial firms test AML program effectiveness

GRC Announcements | June 12, 2017

QuantaVerse recently announced the launch of CCO Checkup, a free service financial institutions can use to test the effectiveness of their AML programs, empowered by  QuantaVerse’s AI solution that analyzes transaction data to detect “false negatives” or anomalous behaviors that may have been missed by an institution’s existing transaction monitoring system.

Enforcement Action Blog

Banamex USA to forfeit $97M for Bank Secrecy Act violations

Jaclyn Jaeger | May 30, 2017

Total combined penalties paid by Banamex USA following criminal and regulatory investigations for violations of the Bank Secrecy Act and anti-money laundering laws and regulations reached $237.4 million this month.

News Article

Compliance, data sharing empower FinCEN war on terror and crime

Joe Mont | May 9, 2017

Addressing Congress, FinCEN Acting Director Jamal El-Hindi discussed how his agency prevents bad actors from infiltrating the financial system.

The Man From FCPA Blog

Corporations and the financing of terrorism

Tom Fox | April 24, 2017

The recent case of LafargeHolcim’s involvement in keeping a cement facility in Syria safe and operational during civil war has raised questions regarding a company’s responsibilities for ensuring monies it pays out do not go to fund terrorism.

The Man From FCPA Blog

Acquisitions, data privacy, and national security concerns

Tom Fox | April 6, 2017

The attempted takeover of the U.S. company MoneyGram International Inc. by China-based Ant Financial Services raises regulatory concerns and questions.

News Article

European Union updates AML rules

Neil Hodge | April 4, 2017

The European Union is proposing some updates to anti-money laundering rules in an attempt to streamline coordination among member states in fighting terrorism financing and money laundering.

News Article

The international reach of compliance

Bill Coffin | March 21, 2017

The challenges facing global compliance programs are only getting more complex, with money laundering, fraud, KYC, sanctions, and cyber-risk leading the way.

The Filing Cabinet Blog

Sen. Brown asks Treasury to probe President’s business ties

Joe Mont | March 8, 2017

U.S. Sen. Sherrod Brown (D-Ohio) has asked the Treasury Department to review President Trump’s investment partners and business associates to assess whether there are violations of anti-terrorist financing, sanctions, or money laundering laws.

Global Glimpses Blog

5 key strategies for your AML program

Simone Jones | March 7, 2017

An effective AML program is far more than just a written protocol; it is a blend of best practices put into effect every day throughout the organization. Here are five ways to make sure your AML program is running at peak efficiency.

What is money laundering? 

Money laundering is a criminal process in which illegally-gained revenue is made to appear legitimate through a number of transactions within the legitimate financial system. In this manner, so-called “dirty” money is made to appear “clean,” by obfuscating its origin.

Money laundering is often conflated with terrorism financing, since the methods used to channel funds into terrorist networks often make use of money laundering to do it.

How does money laundering work? 

First, money is secretly introduced into the legitimate financial system. There are many methods for this, such as use of cash-intensive businesses to make the funds look like they are part of a legitimate cash flow, buying real estate, smuggling the cash in bulk to another jurisdiction and then introducing it into the financial system there as legitimate funds, use of money services businesses such as check cashers or stored value cards, or running the money through various shell companies and trusts to obscure its origin and owner.

Then, the money is often transferred between multiple owners to further confuse its sense of origin and ownership. 

Finally, once the money is considered to be “clean,” it is transferred into the legitimate financial system as ordinary currency that no longer has an obvious connection to criminal activity. Once illegal proceeds no longer have a clear trail connecting them to their point of origin, the money is considered to have been fully laundered.

How do you report money laundering? 

While anti money laundering regulations vary, financial institutions are generally expected to file a Suspicious Activity Report (SAR) to government authorities, typically within 30 days of detecting any signs of potential money laundering activity, such as cash transactions over $10,000.

In the United States, financial institutions such as banks must use the Bank Secrecy Act BSA E-Filing System to submit an SAR. Futures commission merchants (FCMs) and introducing brokers (IBs) must use Form 101, Suspicious Activity Report by the Securities and Futures Industries (SAR-SF). Commodity pool operators (CPOs) and commodity trading advisors (CTAs) are not yet required to file SARs, but are encouraged to do so voluntarily, also using the SAR-SF.

The United Kingdom suggests SARs be reported through the SAR Online system, which provides instant acknowledgement of the report, as well as a reference number. SARs in the UK are overseen by the National Crime Agency.

What is AML?

Anti money laundering, or AML, are those rules, policies and procedures established by government regulators and enforcement agencies, to prevent the activities and financial transactions that are meant to hide the true origin of money (especially that which is generated illegally). Government agencies that oversee AML law typically also issue AML guidelines to aid with their compliance.

In the United States, the first AML regulations were codified by the Bank Secrecy Act of 1970, and have since been updated by other pieces of legislation, including:

  • the Money Laundering Control Act (1984)
  • the Anti-Drug Abuse Act of 1988
  • the Annunzio-Wylie Anti Money Laundering Act (1992),
  • the Money Laundering Suppression Act (1994),
  • the Money Laundering and Financial Crimes Strategy Act (1998),
  • the USA PATRIOT Act (2001)
  • the Intelligence Reform & Terrorism Prevention Act of 2004

The United Kingdom’s AML regime are codified by:

What is AML compliance? 

AML compliance programs are the formal set of internal policies, procedures, and controls that 1) oversee all internal monitoring for signs of money laundering activities, 2) report said activities, and 3) independently test those first two capabilities to ensure they are working properly. Many industries within the financial services sector are required to have a formal AML program, which must be in writing, and must include a formally designated compliance officer, ongoing employee training, and an independent audit function to test the program. 

In the United States, the Financial Industry Regulatory Authority—a self-regulatory organization, has also set forth minimum standards for AML compliance programs under FINRA Rule 3310

The USA PATRIOT Act amended the Bank Secrecy Act to require various financial institutions to formally adopt AML compliance programs. Similar laws mandate AML compliance programs for mutual funds; credit card companies; money service businesses; broker-dealers; insurance companies; and dealers in precious metals, stones, or jewels.