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Anti-Money Laundering Toolkit

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Understanding the Structure of the Anti-Money Laundering Legal Regime

Object of the Regime

The object of a country having a functioning anti-money laundering system is essentially to dissuade money launderers and the financiers of terrorism from using that particular country for their purposes. If all countries have an operational AML/CFT regime then the ability of people to launder money will be greatly reduced.

The methods by which the object is achieved are to ensure that the identities of all people using the financial system are known, that the ownership of all funds is identified or is identifiable, that movement of money or valuable assets1 is traceable, and that the original source of funds is traceable, whether they came from within or outside the jurisdiction.

The legal regime will also provide for the reporting of all border crossing of money and valuable assets and the reporting of all deposits over a certain value ("covered transactions"). The reporting of suspicious transactions is also required. All such reports are made to an intelligence body termed a financial intelligence unit (FIU).

In addition, the legal regime will require the following:

1. Domestic legal systems to be in place and for both money laundering and the financing of terrorism to be criminal offenses; and
2. International legal compliance with a number of international conventions and UN Security Council resolutions

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