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Understanding Money Laundering and Why Anti-Money Laundering Matters

Financial Foundation

Understanding Money Laundering and Why Anti-Money Laundering Matters


Nov 08, 2023

Table of Content

International money transfers are more convenient than ever, but this also presents new challenges with increasing opportunities of being used in money laundering.

Money laundering is a serious crime that undermines the integrity of the financial system and can bring negative impacts on both the economy and society.

We will explore the concept of money laundering, its adverse effects, and the importance of anti-money laundering (AML). We also discuss the role of DNBC, a leading company offering secure global money transfer services in combating money laundering.

What is Money Laundering?

Money laundering is the illegal process of taking money created from criminal activities and making it appear to have come from legitimate sources by passing it through the financial ecosystem. It is a global problem that funds various criminal activities, including terrorism, drug trafficking, and organized crime.

According to the United Nations Office on Drugs and Crime, an estimated 2-5% of global GDP, or $800 billion to $2 trillion, is laundered each year.

Money laundering funds various criminal activities
Money laundering funds various criminal activities

How does money laundering work?

The money laundering process typically involves three distinct steps: placement, layering, and integration.


Placement is the process when the launderer injects the dirty money into the legitimate financial system. This can be done through a variety of methods, such as depositing cash into bank accounts, purchasing valuable assets, or investing in businesses. Criminals often try to minimize scrutiny by breaking down large sums of money into smaller transactions.


Layering is the process of concealing the source of the money through complex financial transactions. Criminals may transfer the funds between multiple accounts, creating a web of transactions to make it difficult to track.


Integration is the process of withdrawing the laundered money from legitimate accounts and used for various criminal activities like finance terrorism, drug trafficking, arms smuggling, or other organized criminal endeavors.

Why is Money Laundering Bad?

Money laundering is a serious crime with various negative consequences for both the economy and society.

Negative impacts on the economy

Reduction in Tax Revenue

Money laundering allows criminals to evade taxes as activities within the underground economy are not declared. Governments lose significant revenue that could be used to fund essential public services and infrastructure.

Unfair Competitive Advantage

Illicit funds provide illegal businesses an unfair advantage over legitimate ones. This will make lawful businesses hard to thrive, leading to job losses and slower economic growth.

Damage to Financial Sector Institutions

Money laundering harms banks and financial organizations, eroding trust in the banking system, and undermining the overall integrity of financial institutions.

Economic crisis

Money laundering can lead to unpredictable changes in currency values and capital flows, which can make it difficult for businesses to plan for the future and can even trigger economic crises.

Negative impacts on the society

Promotion of Crime

Due to illicit funds from money laundering, criminal enterprises can expand, leading to a rise in various illegal activities. This creates a cycle of crime and instability, where law-abiding citizens and businesses suffer the consequences.

Diverting Public Funds

The financial burden of combating money laundering often forces governments to divert funds from other critical public services, such as healthcare and education. This can have a negative impact on people’s lives, particularly the most vulnerable members of society.

What is anti-money laundering (AML)?

Anti-money laundering (AML) is a set of regulations, policies, and procedures designed to detect, prevent, and combat money laundering activities by governments and financial institutions.

By implementing AML protocols, organizations, and financial institutions can mitigate the risks associated with financial crimes, safeguard their reputation, instill trust among stakeholders, and comply with legal obligations.

Anti-money laundering is implemented by many governments and financial institutions
Anti-money laundering is implemented by many governments and financial institutions

How does DNBC implement AML?

DNBC is a trusted partner for global money transfers, and we’re committed to complying with all relevant AML regulations. Here are some of the steps we take to prevent and detect money laundering and other financial crimes:

Know Your Customer (KYC)

DNBC has implemented Know Your Customer (KYC) procedure to verify the identity and profile of all its customers. We require mandatory documents, conduct enhanced due diligence for high-risk customers, screen names against watchlists, and monitor and update customer data regularly.

Regulatory Compliance

DNBC does not accept customers or transactions from countries or jurisdictions that are identified as high-risk by the Financial Action Task Force (FATF).

We also created a set of policies and procedures that follow general AML standards and principles. These policies and procedures are implemented in our daily operations and are published on accessible media so all employees can access them. They are subject to periodical review to ensure their conformity with recent and updated regulations.

Staff Training

DNBC provides regular AML training to all staff to raise their awareness and knowledge of the various methods, techniques, and patterns of money laundering. The training covers the AML policies and procedures, as well as the roles and responsibilities of the staff in combating financial crimes.

DNBC provides regular AML training to all staff
DNBC provides regular AML training to all staff

Choose DNBC for Secure International Money Transfers

Money laundering is a serious crime that threatens the global financial system. DNBC is a trusted partner for international money transfers with both personal and business services, committed to preventing and detecting money laundering.

By choosing DNBC, you can be confident that your funds are protected and you are contributing to a world where financial transactions are conducted with integrity and accountability.

If you need to transfer money internationally, please contact DNBC for a free consultation:

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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.