Does everything you know about money laundering come from Breaking Bad or The Sopranos? The reality is far less romanticised, with potential repercussions that include distorting the economy and eroding the financial sector. Moreover, as “dirty” money is laundered into legitimate funds, money laundering also aids and abets further crime and corruption. The team at Computime Software takes a closer look at how money laundering actually works, and how AXON Transaction Monitoring can protect your business when it comes to AML compliance.
What exactly is money laundering?
Criminals who obtain illegal funds usually look for ways to make this money look as though it was earned legally. This usually involves 3 steps:
- Placement: A business (real or otherwise) is registered with a bank account into which the funds are placed; sometimes a middleman is used instead. Many would-be launderers are usually caught at this point, as large sums of money appearing out of nowhere generally reflects very suspicious behaviour, if done carelessly. Some criminals avoid their illegal money being detected by gambling it, using it to repay a loan, exchanging it for foreign currency or integrating it with clean money through a legitimate business, such as a car wash or night club.
- Layering: This involves exchanging the funds through multiple transactions in order to conceal the original source of the money. Some criminals choose to buy expensive assets such as cars or houses, while more sophisticated scammers move the funds overseas into companies or investments. In fact, it is called layering because this process happens many times over and across diverse products. Money can move from an offshore account to a shell company, from where it can be transferred to yet another shell company and then another, and so on. This results in an intricate network that’s difficult to keep track of.
- Integration: The money is returned to the launderer through a legitimate source, such as buying property or selling property.
How are money launderers caught?
These days, banks and other financial institutions are required to report all transactions over a specified amount, and to confirm the real identity of customers and businesses. Suspicious transactions are to be flagged and reported, after which data analysis is usually carried out to determine whether further punitive action should be taken.
Are you looking for a modern and trustworthy AML transaction monitoring solution?
AXON AML Transaction Monitoring enables banks and financial institutions to their automate transaction monitoring processes, minimising human workload and hence elements of human error. This ensures that the configured monitoring rules are enforced on all transactions, giving you the peace of mind that no transactions are overlooked.
For more information, contact Computime Software today and find out how AXON AML Transaction Monitoring can help your business address the transaction monitoring requirements as specified by AML regulations.