Introduction to AML/CFT for European Union Countries

Money laundering and terror financing are the most negative elements that have adverse effects on a country`s economy. To mitigate such effects Government set out some rules and regulations to counter such elements that the organization will implement in its organization.

Money laundering is generally described as the process by which criminals attempt to hide or disguise the true origin and ownership of the proceeds of their criminal activities, including terrorist financing, thereby avoiding prosecution, conviction, and confiscation of criminal funds. The prevention of terrorist financing is included in all the Firm’s policies, procedures, systems, and controls for the prevention of money laundering.

Such operations may be complex but, in essence, they comprise three basic stages, as follows:

(i) Placement – the placing of “dirty” money into the financial system;

(ii) Layering - the process of moving “dirty” money within the financial system to conceal the source of the funds;

(iii) Integration - the withdrawal of “cleaned” money from the financial system for the purpose of general expenditure or purchase of a business or financial assets or real estate in furtherance of criminal activity.

In this document keeping in view such rules and regulations we have defined and set the standards regarding roles, objectives, and responsibilities for countering Money Laundering and Terror Financing. This document will clearly mention the role of staff to identify, assessing and reporting suspicions.

This document will clearly define Know your Customer, Customer Due Diligence, Identifying suspicion, and assess the suspicion on some parameters defined under AML Regulations. The role of the compliance Officer does not end upon suspicion but starts as the compliance officer has to take actions upon the suspicion and report to the regulator in a pre-defined mechanism. Reporting of Currency Transaction beyond the threshold defined by AML regulations is also a role of the compliance officer and retention of record for the certain period defined.

The document is drafted upon the guidelines issued by EU under the 6th Anti-Money Laundering Act Directives and the Government of the Republic of Poland in different acts related AML/CFT/CPF.