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How AML operates in international money transfers for businesses

Financial Technology

How AML operates in international money transfers for businesses


Nov 07, 2023

Table of Content

The Anti-Money Laundering (AML) has a long history, but it wasn’t until the late 1970s and early 1980s that AML regulations started to be enforced in a committed manner.

After the 9/11 terrorist attacks, AML regulations underwent revisions to incorporate measures aimed at preventing financial terrorism. Many countries as well as economic and political partnerships, such as the European Union have enacted, and continue to update, laws and regulations to combat money laundering and counter-terrorism financing (CTF).

Also, this is attributed to the ongoing development of money laundering tactics and the heightened acknowledgment of the vital role AML plays in countering criminal activities and safeguarding the financial system.

Today, AML regulations are overseen by a multitude of entities, which encompass financial regulators, law enforcement agencies, and intelligence organizations. These regulations mandate AML compliance not only for financial institutions but also other enterprises in financial transactions, including casinos and international online money transfer services.

AML regulations are overseen by a multitude of entities.

AML regulations are overseen by a multitude of entities.

This article will help you understand how AML operates in international money transfers for businesses.

Why is AML required for international money transfers for business?

AML comprises a collection of rules, protocols, and technological measures designed to hinder and uncover money laundering activities.

As per the International Monetary Fund (IMF), money laundering accounts for approximately 2-5% of the global GDP. AML empowers criminals to profit from illegal activities like corruption, tax evasion, theft, drug trafficking, and human smuggling. These illicit activities can diminish a country’s economic resources and pose a threat to its economic stability.

Basically, there are a number of reasons why AML is required for international money transfers:

To protect the financial system

Money laundering can disrupt the stability of the financial system as it hinders banks and other financial entities from evaluating risks and making well-informed lending judgments. AML measures play a pivotal role in protecting the financial system from the perils linked to money laundering.

AML measures play a pivotal role in protecting the financial system.

AML measures play a pivotal role in protecting the financial system.

To combat crime

Money laundering is often associated with other types of crime, such as drug trafficking, terrorism, and human trafficking. AML measures help to disrupt criminal activity and reduce the proceeds of crime in making online money transfer abroad.

To protect consumers

Consumers are at risk of being victims of fraud and identity theft when money is laundered through the financial system. AML measures help to protect consumers from these risks.

The common steps of MSB compliance and AML regulations

Money Services Business (MSB) compliance with AML regulations is crucial for ensuring the integrity of the financial system and preventing illicit financial activities.

The following are critical elements of compliance for MSBs and AML regulations:

Regulatory framework

MSBs are required to adhere to AML regulations, which are set at both national and international levels. These regulations are overseen by regulatory bodies like financial regulatory authorities and central banks.

Risk-based approach

MSBs often need to implement a risk-based AML compliance approach. This entails performing a risk assessment to recognize and assess the money laundering and terrorist financing risks connected with their activities.

Subsequently, MSBs should establish controls and procedures commensurate with the recognized risks.

Customer Due Diligence (CDD)

MSBs are obligated to conduct customer due diligence, which involves verifying customer identities and evaluating their potential risk regarding money laundering and terrorist financing.

MSBs are obligated to conduct customer due diligence.

MSBs are obligated to conduct customer due diligence.

This encompasses the collection and verification of customer identification details, comprehension of the nature and purpose of customer associations, as well as regular review and updating of customer information.

Enhanced Due Diligence (EDD)

In specific cases, MSBs might need to implement enhanced due diligence measures for customers or transactions deemed to pose a higher risk.

This requires supplementary information, conducting more comprehensive background checks and reviews, and subjecting transactions to closer scrutiny to guarantee adherence to AML regulations.

Suspicious Activity Reporting (SAR)

MSBs are legally mandated to promptly report suspicious transactions or activities to pertinent authorities, such as Financial Intelligence Units (FIUs).

They are required to establish internal protocols and systems for the timely identification and reporting of suspicious activities while ensuring confidentiality and safeguarding the integrity of the reporting process.


MSBs typically must keep thorough records of customer transactions, recording details such as transaction nature, date, and amount.

MSBs typically must keep thorough records of customer transactions.

MSBs typically must keep thorough records of customer transactions.

These records are required to be retained for a designated period, which often spans several years to several decades. Regulatory authorities can request access to these records when needed.

Compliance programs

To prevent the misuse of their services for money laundering and terrorist financing, MSBs should have AML compliance programs that include policies, procedures, and controls. These programs should be regularly evaluated and updated to keep up with the changes in regulations, industry standards, and emerging threats.

Regulatory oversight

MSBs have to follow AML regulations and are supervised by regulatory authorities. The authorities check MSBs’ compliance programs and controls by doing examinations, inspections, and assessments. MSBs that do not comply can face penalties, fines, sanctions, or lose their licenses.

International cooperation

To follow AML regulations in different countries, MSBs that operate across borders should have processes to meet international standards and work with relevant authorities to share information and fight against money laundering and terrorist financing that cross borders.

By taking these AML measures, businesses that offer international money transfer services can help to prevent and detect the laundering of money. This helps to protect the financial system and the global economy.

DNBC: Compliant AML-optimized international money transfer approach

DNBC is dedicated to adhering to the sanctions laws and regulations of various governing bodies, including the United Nations Security Council, the United Kingdom, the Hong Kong Special Administrative Region, the European Union, Canada, and the United States of America, along with all relevant sanctions laws and regulations in the regions where we’re operating.

DNBC is dedicated to adhering to the sanctions laws and regulations of governing bodies.

DNBC is dedicated to adhering to the sanctions laws and regulations of governing bodies.

DNBC adheres to the guidelines established in the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and the Ministerial Directives provided by the Minister of Finance to prevent money laundering and terrorist financing.

Furthermore, DNBC is obliged to collaborate and report any suspicions and relevant issues related to ML and terrorist financing (TF) to the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) or the Unit for Combating Money Laundering.

At DNBC, we offer personalized 1-on-1 assistance. The international money transfers can be complex, and our dedicated team is here to ensure that you have a smooth and simplified experience.

You can count on expert assistance and a streamlined process for all your international money transfer needs. You can rest assured that your international money transfers are carried out with the utmost security, mitigating potential risks and offering peace of mind.

DNBC Financial Group is your trusted provider in international money transfer

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Note: The content in this article is for general informative purposes only. You should conduct your own research or ask for specialist advice before making any financial decisions. All information in this article is current as of the date of publication, and DNBC Financial Group reserves the right to modify, add, or remove any information. We don’t provide any express or implied representations, warranties, or guarantees regarding the accuracy, completeness, or currency of the content within this publication.