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What is money laundering? What is the objectives of anti-money laundering/combating the financing of terrorism (AML/CFT) policy in any country?


Money laundering shall refer to any of the following acts:

i. The conversion/transfer of funds by any person who knows or should have known or there are sufficient grounds for suspecting that such funds are the proceeds of illegal sources. For the purpose of concealing/disguising the illegal origin of such funds or for assisting any person who is involved in the commission of the predicate offence to evade the legal consequences of his/her actions.

ii. The concealment/disguising of the true nature, source, location, disposition, movement or ownership of or rights with respect to funds by any person who knows or should have known or suspects that such funds are the proceeds of crime.

iii. The possession, acquisition or use of funds by any person who knows, should have known or there are sufficient grounds for suspecting that such funds are the proceeds of crime.

In any country implementing or having AML/CFT policy mean they are being cautious to any illegal financial activity which is responsible for dragging national financial/economic environment down resulting atmosphere of chaos. Whatever particular country have AML/CFT policy objective, in general to keep the financial mechanism up to date and to remain controlling factor of country's financial environment is the motto behind. 

(Source of image is internet)

 Now, lets see the objectives of AML/CFT policy in a point wise.

i. To develop a sound mechanism for the compliance of AML/CFT measures as required by the legal, regulatory, and international practice/conventions.

ii. To adopt risk-based approach and functionally adequate system controls.

iii. To enable conducive business environment in compliance with the AML/CFT standards in an economical and effective manner.

iv. To develop the protective environment for the banks, its employees and the clients.



Happy reading!



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