Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) laws have been around for 30+ years and impact millions of companies globally.
In 1989, the Financial Action Task Force (FATF) was formed to set international standards for AML/CFT compliance.
Key developments in the evolution of AML/CFT regulations have included:
- In 1990’s, AML first became a specific regulatory focus, recognising the vulnerability of the financial system to money laundering, with specific emphasis on systemically important financial institutions
- In the early 2000’s as a result of 9/11, terrorism financing laws were combined with money laundering laws
- In the mid-2000’s the concept of the risk based approach for AML/CFT programs was developed which requires regulated entities to conduct an ML/FT risk assessment and implement a program proportionate to risk
- In 2010, the focus has expanded to include looking at predicate offences that can lead to money laundering, in particular tax evasion (i.e. FATCA, CRS) and bribery and corruption (i.e. UKBA and FCPA)
- In late 2010’s, focus by the FATF on ‘gatekeepers’ like lawyers, accountants, real estate agents and high-value dealers is extending to include millions of new businesses that will need to comply with AML for the first time
Regulators in the United States and Europe have imposed $342 billion of fines on banks since 2009 for misconduct, including violation of anti-money laundering rules, and that is likely to top $400 billion by 2020.