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Anti-Money Laundering & Product Risk

Anti-Money Laundering & Product Risk

An asset with high value that can be bought and sold in a short time frame is attractive to money launderers. Typical assets include Art, Precious Metals, Real Estate, Cars.

AML compliance program however is not limited to these types of assets. Casinos (including online casinos) is another popular method for money laundering, as well as the use of online electronic payments such as PayPal and E-Bay. Secondary trading in Endowment policies and policies that offer a cooling off period are just as vulnerable.

Examples of products and services with inherent risk include –

* Private Banking

* Correspondent Banking

* Structured Finance

* Commodities

* Complex transactions

* Services involving banknote and precious metal trading and delivery

* Services intended to render a customer anonymous* Products which allow / facilitate payments to third parties

* Internet based products or products that facilitate easy non face to face access

The Financial Markets are widely used by launderers. The securities and derivative markets – both of which can offer blurred audit trails – are rumoured to be a vehicle of first choice for the more sophisticated launderer.

Structured products which are complex and involve offshore transactions are another favourite, as too are Over-The-Counter products which are negotiated privately between two parties and traded without going through an exchange.