AML (Anti-Money Laundering)

AML stands for Anti-Money Laundering and refers to a set of procedures, laws, and regulations designed to prevent the process of converting illegally obtained income into legitimate money. Financial institutions, especially EMI (Electronic Money Institutions), are required to comply with AML regulations as a condition of their operations.

An EMI platform must adhere to the following AML requirements:

1. Customer Identification (KYC – Know Your Customer): EMIs must establish customer identity verification procedures before opening accounts or processing transactions. This involves collecting and verifying personal data, such as passports, residential addresses, and other identifying documents.
2. Transaction Monitoring: EMIs are required to monitor their clients’ transactions for suspicious activity that may indicate money laundering. This includes unusually large transactions, frequent large-sum operations, or transactions that do not fit the customer’s usual activity profile.
3. Reporting Suspicious Activities (SAR – Suspicious Activity Report): If an EMI detects any suspicious transactions, it must report them to the relevant regulatory authorities.
4. Internal Policies and Training: EMIs must develop internal AML policies that include regular staff training to recognize and appropriately respond to money laundering-related activities.
5. Compliance with Sanction Lists: EMIs must check their clients against international sanction lists and ensure compliance with all relevant sanctions.
6. Risk-Based Approach: EMIs should assess and apply AML measures in accordance with the level of risk associated with clients, countries, products, and services.

Complying with these and other AML requirements helps prevent the use of EMI platforms for money laundering, terrorist financing, and other criminal activities. It is also crucial for maintaining the institution’s reputation and avoiding legal consequences and fines.