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Best tips to prevent money laundering

by John Saunders
21st Feb 22 2:42 pm

It doesn’t matter if you live in Australia, Canada, Britain, or the US. While large financial institutions are often the first thing that comes to mind when we think about money laundering, it is always going to be the smaller and more experienced businesses are just as likely to be targeted due to their ignorance and inexperience regarding the crime. For businesses of all sizes, reliable, trustworthy AML checks are essential for the success of these businesses.

Many times, these kinds of businesses owners receive offers from unscrupulous people promising lucrative deals that are obviously fraudulent, ones that would likely never come to fruition. These offers are often too good to be true, and the business could end up being used to fund money laundering. The owner may not know it but could be involved in criminal operations. This could lead to serious legal problems for these businesses, problems that they may not be able to recover from.

You can protect yourself and your company, no matter whether you are part of a large corporation or a sole proprietorship. Here are four things you can do to protect your business from money laundering schemes that could compromise your daily business activities.

1. Stay informed

Consumer convenience is on the rise as businesses increasingly rely on digital platforms, and transactions are mainly internet-based. This convenience, as good as it is for people worldwide, it always comes at a high price. Cybercrimes have become much easier to perpetrate, thanks to the availability of innovative methods of laundering money that are becoming much easier to do.

It is up to you and your staff to be informed about current laundering schemes that, with each passing year, become more elaborate and much harder to detect. Prepaid credit cards, for example, or a clear sign that something may be going on in terms of fraudulent activity, primarily because they can be used to launder money by would-be criminals. Your employees should be extra cautious with customers who might use them.

2. Be curious

It doesn’t matter if you are working with an investor, or perhaps a long term partner, that may have that you to what appears to be an outstanding customer. If you receive any money, especially from individuals that have large amounts of cash, from out of the blue, you should take notice and be prepared for the worst.

It’s a good idea to do background checks on everyone in order to find out if anyone has been arrested for any crimes, and if they have even been investigated, this is something that you need to be aware of. Before signing a deal, you need to be familiar with all parties involved.

3. It is impossible to ask too many questions

You need to verify that a potential money laundering scheme is being presented to you or your company by an individual who approaches you.

First of all, find out about all involved parties and how much cash will be part of these transactions. If you get answers that are unclear or ambiguous, it’s a sign of trouble. The next thing to watch out for is someone who wants to invest ridiculous amounts of money into your business. You will need to do extra research to verify their veracity.

Don’t be surprised if potential investors insist that they only deal in cash. Ask for the reason behind your potential investors’ decision to only deal in cash. If their answers are unclear or inconsistent, you may want to reject them.

4. Make your own AML programme and policy

AML policies are not only for large companies. Smaller businesses should also have them in place to safeguard against the laundering of money. First, you should conduct a money-laundering assessment that can help you determine what your risks will be. This systematic assessment assesses your company’s risk of being used to launder money.

This will allow you to understand your business better and provide the basis for creating and implementing an AML programme that you can design yourself. AML risk assessments should be scheduled regularly even after the creation of your AML programme. This will keep you informed about your company’s exposure to the potential of unscrupulous individuals and companies using your business to launder money.

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