Anti-money Laundering

What is anti-money laundering (AML)?

Before defining anti-money laundering (AML), it’s important to explain what money laundering is. Money laundering is the illicit practice of transferring funds of unlawful origin – usually as cash – into legal enterprises to make it look as though the money is legitimate. Money launderers might, for example, run money through a legitimate cash-based business; find a way to transfer cash into foreign countries to deposit it; deposit it in smaller chunks; or buy other cash instruments, such as virtual currencies (also known as cryptocurrencies).

In today’s global business environment, money laundering continues to be a prevalent problem.

AML activities, then, aim to fight this ongoing issue by establishing processes, policies, regulations and laws that require businesses to actively monitor the entities with whom they do business. They target such practices as market manipulation, illegal goods trading, tax evasion, bribery and other forms of financial corruption.

The 5th EU AML Directive

To combat money laundering as well as counter-terrorism financing (CTF), the European Parliament recently adopted the 5th Anti-Money Laundering Directive. Rather than a new law, this directive is an amendment to the EU’s 4th Anti-Money Laundering Directive, which aims to bring greater transparency to the financial system and prevent its use for the funding of criminal activities.

The directive addresses such areas as:

  • regulation of virtual currencies
  • information on beneficial owners (persons who reap the benefits of ownership even though the title of a given property is in someone else’s name)
  • use of anonymous prepaid cards
  • powers of financial intelligence units (FIUs) – entities that help investigate and prosecute serious criminal activities, such as money laundering, terrorism financing, tax evasion and organised crime
  • stricter due diligence requirements for business relationships or transactions that involve high-risk countries

EU member states, including the UK, must begin to enforce the necessary regulations and laws and comply with the directive by 10 January 2020.

Due-diligence checks

With such widespread risk of corruption on an international scale, due diligence practices are more essential than ever. To protect yourselves from money laundering and regulatory non-compliance and ensure successful, above-board business transactions, companies must make sure they have timely and accurate business intelligence through due diligence checks.

A due diligence check is a procedure for identifying, evaluating and verifying all available information about an individual or entity. Conducting robust due diligence checks through a reliable source means you can have confidence in your business dealings.

Lexis Diligence®

Lexis Diligence® AML solutions let you conduct enhanced due diligence checks and comprehensive research to investigate and monitor third parties, customers and other entities with whom you do business. Using the tools means you can stay compliant with international AML procedures and safeguard your business. The tools give you access to an unparalleled collection of global news and information all in one place, including:

  • more than 150 databases of premium business information
  • millions of public and private company profiles covering developed and emerging markets
  • politically exposed person (PEP) lists, international sanctions lists and watchlists
  • more than 26,000 current news sources from newspapers, blogs, and newswires, as well as an archive that dates back 40 years
  • the LexisNexis® database of international court cases and decisions
  • risk-analysis reports
  • more than 500 biographical sources and executive profiles

What’s more, the Diligence® built-in report builder enables to you to produce customised time- and date-stamped reports to demonstrate your ongoing compliance efforts should you undergo any type of regulatory audit.
Ultimately, with a complete picture of the people and companies you’re dealing with, you’ll improve your decision-making power and be able to safeguard and grow your business with confidence.

LexisNexis Diligence spotter®

As the regulatory landscape continues to evolve, establishing an agile third-party risk management and compliance process is critical. That’s where our LexisNexis Diligence spotter® software comes in. Combining third-party screening, risk assessment and ongoing monitoring and case management, Diligence spotter® is a robust regulatory compliance tool that can evolve to suit your due diligence processes.

Diligence spotter® searches across internal and external data sources and other documentation to help you identify, assess and manage risk exposure. With the software, you can continually evaluate, monitor and measure risk to capture a real-time, daily assessment so you can escalate your due diligence efforts as necessary.

Diligence spotter® also allows you to incorporate additional internet research into your screening process, so you can be rest assured that as regulations evolve, Diligence spotter® will keep up.