Anti-Money Laundering (AML) Policy:
Additionally, anti-money laundering policies require financial institutions to periodically file reports regarding their clients and completed transactions. These reports vary by country, but many of them are quite similar. For instance, in the United States, certain paperwork must be completed for transactions that involve over $10,000. Similarly, if a transaction appears to be otherwise suspicious—even if it is not over $10,000—a bank employee must file a suspicious activity report (SAR).
Almost all countries with anti-money laundering policies have suspicious activity reports, and many of them also have certain pieces of legislation that protect banks as well.
Previously, banks had been wary about providing the government with clients’ personal information as they feared potential liability for doing so. Now, however, a majority of states have passed laws that allow banks to forward on client information without facing any backlash or legal repercussions. This has greatly simplified governments’ efforts to implement effective anti-money laundering policies and acquire financial intelligence.
It is important to note that banks are not the only financial institutions required to follow anti-money laundering policies and fill out SARs. Other institutions such as currency exchange firms, casinos, insurance agencies, and accountants must also follow certain anti-money laundering regulations. This is because they often complete large transactions and are likely to have direct contact with the individuals or companies that are responsible for financial crime. By gathering financial intelligence from these entities as well, the public sector is able to track down criminals more efficiently and, ideally, uncover legal violations before they reach a large scale.