AML & KYC Compliance

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The principles of AML & KYC are similar concepts, the main goal of which is to ensure security of conducting financial activities.

AML and KYC's policy is to eliminate anonymity in the process of financial services provision for the following purposes:

  • Better understanding of clientele;
  • Customer risk reduction;
  • Corruption prevention;
  • Combating the receipt and use of profits obtained illegally;
  • Combating the financing of terrorism.

To find out more, we recommend that you carefully read this material, as well as ask for personal advice on compliance with AML/KYC from IQ Decision specialists.

What is an AML Compliance

AML (full title AML CFT CWMDF) is a set of laws, regulations and measures to combat money laundering, terrorist financing, and the creation of weapons of mass destruction.

The formation of rules and regulations, as well as the publishing of anti-money laundering guidelines, is handled by the FATF, an international law enforcement group.

Compliance with the AML policy (AML Compliance) allows you to achieve social responsibility of the business, as well as protection against fraudulent schemes, tax evasion, theft of money and illegal sale of goods (other things).

A thorough analysis of financial reports during the investigation of the receipt and use of illegal profits is an effective method for solving such crimes.

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One of the key requirements of AML in relation to financial institutions is to conduct a customer due diligence.

The AML code of practice also includes an enhanced customer Due Diligence (EDD) and the “know your customer's customer” principle (KYCC). Based on this, we can conclude that the KYC principle is also part of the AML policy.

You can find out more about this with a legal advice on compliance with AML requirements from IQ Decision experts.

What is a KYC Compliance

KYC (Know Your Client) is the procedure of verifying and identifying the client before an execution of financial transactions. It includes risk management, transaction monitoring, and a client eligibility policy.

This principle is guided by many financial institutions, including:

  • Banks;
  • Payment systems;
  • Mutual and investment funds;
  • Stock exchanges;
  • Bookmakers.

Increasingly, KYC is being used to verify customers seeking to open a bank account in the name of a company in Asia or Europe, open a cryptocurrency account in the payment system, open a corporate account for IT activities in Europe and other types of risky activities.

The most striking examples of the use of a KYC policy are verification of the client’s identity by SMS code, as well as restrictions on withdrawals from an account.

KYC is used as part of AML compliance, but is not a mandatory regulatory requirement.

If you have any questions on this topic, we recommend that you ask for individual advice on ensuring KYC compliance obligations from IQ Decision specialists.

Also, we are ready to provide you with legal assistance in conducting a Due Diligence of counterparties or business partners.

  • The information outlined in the article is actual at the time of its publication.

  • Please refer to our specialists for checking possible solutions for your business.

  • Still have any questions?

    Fill out the form or contact us as you find convenient: skype, telegram, etc. Our experts will help you resolve the issue.

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