A set of laws and regulations designed to prevent criminals from disguising illegally obtained funds as legitimate income.
Anti-Money Laundering (AML) refers to the legislative and procedural framework implemented by financial institutions and regulatory bodies to combat the process of 'money laundering.' This process involves disguising the origins of illegally obtained money, typically by transferring it through complex financial channels to make it appear legitimate. AML regulations mandate various checks, such as customer due diligence, transaction monitoring, and suspicious activity reporting, to identify and prevent financial crime.