While no single entity "controls" Anti-Money Laundering (AML) globally, it's a collaborative effort involving various international bodies, national governments, regulatory authorities, and financial institutions. In India, key players include the Reserve Bank of India (RBI), the Securities and Exchange Board of India (SEBI), and the Financial Intelligence Unit-India (FIU-IND).
Here's a breakdown of who plays a crucial role in AML:
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International Organizations:
- Financial Action Task Force (FATF): Sets international standards and promotes effective implementation of legal, regulatory, and operational measures for combating money laundering, terrorist financing, and other related threats to the integrity of the international financial system.
- United Nations (UN): Addresses money laundering through various resolutions and conventions, focusing on international cooperation and criminalization.
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National Governments:
- Legislative Bodies: Enact AML laws and regulations, establishing the legal framework for combating financial crime. These laws define offenses, set penalties, and empower regulatory agencies.
- Law Enforcement Agencies: Investigate and prosecute money laundering offenses. Examples include the Enforcement Directorate in India or the FBI in the United States.
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Regulatory Authorities:
- Central Banks (e.g., RBI in India): Issue guidelines and supervise financial institutions to ensure compliance with AML regulations. They monitor transactions, require due diligence, and enforce reporting requirements.
- Securities Regulators (e.g., SEBI in India): Oversee securities markets and intermediaries, implementing AML measures to prevent money laundering through investments and trading.
- Financial Intelligence Units (FIUs) (e.g., FIU-IND): Receive, analyze, and disseminate suspicious transaction reports (STRs) and other financial intelligence to law enforcement agencies and other competent authorities.
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Financial Institutions:
- Banks, Investment Firms, and other financial entities: Implement internal AML programs, conduct customer due diligence (CDD), monitor transactions, and report suspicious activity. They are the first line of defense against money laundering.
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Other Businesses (Designated Non-Financial Businesses and Professions - DNFBPs):
- These include casinos, real estate agents, dealers in precious metals and stones, lawyers, notaries, and accountants. They are required to conduct CDD and report suspicious transactions.
In summary, AML isn't controlled by a single entity. Instead, it's a global and national collaborative effort involving setting standards, enacting legislation, regulating financial institutions and designated businesses, enforcing laws, and sharing information to prevent and combat money laundering. The specific entities and their roles vary by jurisdiction, but the overarching goal remains the same: to protect the financial system from abuse and prevent illicit funds from being laundered.
